Lisbon was considered the best European city for investment and development prospects by PwC and ULI (Emerging Trends Europe 2019).

Citizenship by Investment

Real estate investors can benefit from the many incentives and advantages Portugal has to offer, including a Residence Permit for Investment Activity (Golden Visa), which entitles its holder to:

• Live in Portugal for an average of 14 days within a 2 year period;
• Have Visa exemption for traveling within the Schengen Area;
• Have family members reunited and apply simultaneously with the main applicant;
• Apply for permanent residency or citizenship after 5 years.

Investment Options

• If the property is for residential purposes, the investment can only be made in the low density areas of mainland Portugal and Islands (Azores and Madeira);
• If the property is for commercial, services, or other purposes, rather than residential, the investment can be made anywhere in the country;
• Purchase of real estate equal to or above € 500,000; this amount can be reduced by 20% when the investment is made in a low-density area - € 400.000,00;
• The real estate may be acquired in a co-ownership regime, provided the applicant invests an amount equal to or above € 350.000,00, this amount can be reduced by 20% when the investment is made in a low-density area - € 280.000,00;
• Purchase of real estate dating back more than 30 years or located in urban regeneration areas, for refurbishing, equal to or above € 350,000
  

Urban Rehabilitation

Investing in real estate, located in Urban Rehabilitation Areas (ARU) or built over 30 years ago, may entitle an investor to benefit from:

• a 6% VAT reduction on labour and building materials;
• Property tax exemption for 3 years, renewable for an additional five-year period if intended for lease for permanent abode or main permanent abode.
• Property transfer exemption, provided the works begin within 3 years;
• Exemption of some municipal fees;
• Other tax benefits, such as a reduction in Personal Income Tax (IRS) or Corporate Income Tax (IRC) exemption for real estate investment trusts;
• Financing (loans or guarantees) in advantageous terms through IFRRU 2020. IFRRU 2020 is a financial instrument, bringing together various sources of financing, to support investment in urban renewal and energy efficiency in Portugal. Private individuals and legal persons, Portuguese or foreign, can apply at any time.

Venture capital investors can benefit from the advantages a Residence Permit for Investment Activity (Golden Visa) offers, which entitles its holder to:

• Live in Portugal for an average of 14 days within a 2 year period;
• Have Visa exemption for traveling within the Schengen Area;
• Have family members reunited and apply for the visa, simultaneously with the main applicant;
• Apply for permanent residency or citizenship after 5 years.

Investment Options

Capital transfer equal to or above € 350,000 for the acquisition of shares of investment funds or venture capital funds geared to the capitalisation of companies incorporated in Portugal, with a maturity, at the time of investment, of at least five years;

SIFIDE II

The Tax Incentives Scheme for Business Research and Development (SIFIDEI), in force from 2013 to 2020, aims to support R&D activities related to the creation or improvement of a product, a process, a program or an equipment, covering expenses resulting from Research (new scientific or technical knowledge) and Development (obtaining substantial improvement of raw materials, products, services or manufacturing processes).

Portuguese tax resident SMEs can deduct from the CIT due up to 82.5% of investment (eligible expenses) in R&D activities:

• Base rate: 32.5% of the R&D expenses (increased by 15% in case of SMEs that do not benefit from the incremental rate of 50%);
• Incremental rate: 50% on increased expenditure related to the simple mathematical average of the previous two tax years (up to a deduction limit of 1.5M€).

RFAI

The Tax Regime for Investment Promotion (RFAI) sets several tax incentives to investment within specific industries.

Companies investing in specific regions can benefit from deduction over payable Corporate Income Tax (capped at 50% of the CIT due) of:

• 25% deduction on investments lower than EUR 15 million;
• 10% deduction for the part exceeding that limit.
• Companies are also able to carry forward any unused credit for ten years and may benefit from exemptions or reductions from property transfer tax (IMT), property tax (IMI) and stamp duty on the acquisition of real estate for investment purposes.

Co-Funded Professional Internships

Grants (65%-80% support per trainee) cover:

• Registered unemployed jobseekers aged between 18 and 30;
• Registered unemployed jobseekers between 30 and 45 and over 45 (featured cases);
• People who served in the Armed Forces (featured cases);
• Other unemployed jobseekers in situations of greater social disadvantage featured cases.

Contract-Employment Measure

Financial support to hiring new workers covers:

• Jobseekers registered for at least 2 consecutive months (people aged 29 or less or aged 45 years or more; other long term unemployed registered jobseekers);
• Jobseekers registered for at least 6 consecutive months;
• Regardless of the time registered, the unemployed person who’s in a situation of greater disadvantage.

Social Security Tax Reduction or Exemption

This incentive (reduction or exemption of social security contributions) can be applied for in association with new hirings, but cannot be combined with the Employment-Contract measure. It covers the hiring of:

• Jobseekers, aged 30 or less, looking for their 1st job (reduction of 50% for 5 years);
• Long term unemployed jobseekers, registered for more than 12 months (reduction of 50% for 3 years);
• Very long-term unemployed jobseekers, registered for over 25 months and aged 45 or more (exemption up to 3 years).

Portugal was awarded World’s Leading Destination e Europe’s Leading Destination 2018 and showed a 7.3% growth in turnover (57.6 million overnight stays, of which 40.9 million foreign; in 2019, up to September, 48.27 million overnight stays were registered, of which 33.5 million foreign).

Moreover, Portugal ranks #19, out of 88 countries, for the English Proficiency Index 2018 and #3 out of 163 countries for the Global Peace Index 2019.

Credit Lines

There are credit lines available for:

• Improvement of the Tourism Offer – financial instrument for the requalification or creation of tourist enterprises and local accommodation establishments and other projects
• Capitalizar Turismo Credit Line – medium and long-term bank loans to finance new investment in tangible fixed assets and loans to finance debt service that is too demanding compared to the level of cash-flow generated by the company.

REVIVE

The REVIVE programme aims to attract private investment to ensure the recovery of vacant public properties with architectural, heritage, historical and cultural value, through public tendering, making it suitable for tourism-oriented economic activity.