PORTUGAL Trends and Developments Contributed by: Domingos Cruz, Joana Bugia and Constança Morão, CCA Law Firm
IFICI – New Tax Incentive In an effort to attract highly skilled professionals to Portugal, the government launched IFICI, the successor to the former Non-Habitual Resident (NHR) regime. This programme, primarily aimed at active professionals engaged in scientific and innovative activities, offers a flat personal income tax rate of 20% on Portuguese-sourced income derived from employment or self-employment. It also grants full exemption on foreign-sourced income, with the exception of pension income and income originating from blacklisted jurisdic - tions. The benefits under IFICI apply for a period of ten years. This initiative has undoubtedly captured the attention of founders and other C-level profes - sionals, many of whom have chosen Portugal as their primary residence. They are drawn by the combination of favourable tax conditions, a reasonable cost of living, and a safe, healthy environment for expatriates and their families. Conclusion Portugal continues to adopt a holistic approach to fostering innovation and technology. Public and private actors are working collaboratively to create optimal conditions for foreign private investors and founders to relocate, explore opportunities, and engage with the country’s dynamic venture capital ecosystem – with a uniquely Portuguese twist.
• Portugal Tech: EUR100M to invest in private investment funds focused on tech transfer, venture and early stage. See www.bpfomento.pt/pt/catalogo/produtos- de-capital/. Portuguese Innovation Agency (A.N.I.) One of the most successful programmes in recent years was the SIFIDE investment funds, where limited partners that invested in these funds would benefit from a tax break of more than 80% on the amount invested. These funds are only allowed to invest in companies certified by A.N.I. During 2024, several foreign start-ups were drawn to Portugal by the appeal of these funds, leading many to incorporate wholly owned sub - sidiaries in the country in order to qualify for them. In response to this growing interest, the Portuguese Innovation Agency clarified that: • Foreign companies are not required to have maintained a presence in Portugal for at least one year and may benefit from R&D invest - ments made by their parent company. • Conditional approval may be granted to com - panies that, at the time of application, have not yet consolidated their R&D teams. • Fast-track approval is available for incubated start-ups. This regulatory framework marked a significant breakthrough for Portugal, positioning it as an attractive jurisdiction for foreign start-ups seek - ing to establish centralised R&D hubs in Europe. See ani.pt/ani-atualiza-regras-idoneidade-i-d/.
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