With the recent law, No. 21/2023, dated May 25, Portugal has created a specific tax regime for startups and scale-ups, offering tax benefits and easier access to entrepreneurship and innovation support programs that can drive the growth of emerging companies.
Who can benefit?
To take advantage of these incentives, companies must meet certain requirements. To qualify as a startup, a company must be less than 10 years old, have fewer than 250 employees, and an annual turnover of less than 50 million euros.
Additionally, the company must meet at least one of the following criteria: hold the ID seal from the National Innovation Agency (ANI), be recognized as a technology company by ANI, have completed a venture capital funding round, or have received certified investment from IAPMEI or the Portuguese Bank for Development.
Companies that do not meet any of these criteria can apply for a preliminary declaration from Startup Portugal, demonstrating that they have an innovative business model or a scalable business with high growth potential.
What are the benefits?
Startups can benefit from tax incentives such as the Tax Incentive for Scientific Research and Innovation (IFICI), which applies a fixed 20% IRS rate for 10 years for members of governing bodies and employees who become tax residents in Portugal after five years abroad. Additionally, the tax regime for stock options establishes a unique 14% IRS rate, applicable only when liquidity is achieved, meaning when the value of the shares is actually received.
Recognized startups can also benefit from additional funding through support programs like Mar2030 and other entrepreneurship promotion initiatives.
How does the application process work?
The application for startup or scale-up status is straightforward and must be made through the Single Public Services Portal on gov.pt. After submission, Startup Portugal will review the request, and if approved, issue a digital certificate valid for three years.
For more information
Interested parties can visit the Startup Portugal website or access the online procedural manual available. If you have any questions or need support, Set.Up Guimarães is also here to help: set.up@cm-guimaraes.pt.
Now, more than ever, startups have a unique opportunity to solidify their presence in the Portuguese market with the support of tax incentives and strategic growth programs.
