The 2024 State Budget Law established that startups are now subject to IRC (corporate income tax) at a rate of 12.5% on the first €50,000.00 of taxable income, instead of the 17% rate.
Requirements to qualify as a startup
To qualify as a startup, companies must cumulatively meet the following requirements:
- Have been operating for less than 10 years;
- Employ fewer than 250 workers;
- Have an annual turnover not exceeding €50 million;
- Not result from the transformation or demerger of a large company and not have any direct or indirect majority holding by a large company in their capital;
- Have their registered office or a permanent establishment in Portugal, or at least 25 employees in Portugal.
Additional conditions
In addition, they must also cumulatively meet the following conditions:
- The company must be innovative, with growth potential, and fall within the terms defined by law, or have been recognised by the National Innovation Agency for research and development practices or certification in the technology sector;
- Have completed at least one venture capital funding round supervised by the Portuguese Securities Market Commission (CMVM) or a similar international authority, or through the contribution of equity or quasi-equity instruments by investors who are not founding shareholders of the company, namely business angels certified by IAPMEI (Agency for Competitiveness and Innovation);
- Have received investment from Banco Português de Fomento or funds managed by it, or by its subsidiaries, or from one of its equity or quasi-equity instruments.
This measure seeks to promote the creation of companies in sectors of activity considered strategic and to keep them in Portugal.
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