The Portuguese post-crisis investment boom has been driven by attractive tax benefits for investors and expats, a rapid increase in tourism and a strong pool of highly talented yet inexpensive workers. Nuno Cunha Bernabé, Partner and Head of Tax Practice at PLMJ Avogados explains the three core tax incentives enabling Portugal to attract investment, as well as why today has never been a better time to hire a Portuguese worker.
What types of tax incentives does Portugal have to offer?
I would say we have three types of incentives. We have the resident non-habitual program, and those are basically incentives for people to come and live here. And then you have specific tax incentives; for example, we have specific incentives for urban refurbishment, including the possibility to get a full refund of property transfer tax, which is considerable. Finally, you have more institutional, professional investors, corporate and personal income tax incentives.
Can a Portuguese company be 100% owned by a foreigner?
Yes. We have no limitation whatsoever to foreign investment and certainly none by nationality. The only limitation we have is the same that is seen in every EU country, which includes strategic sectors, such as energy, aviation, and banking and insurance, which may have limitations in terms of ownership by non-European nationals, but that’s the only limitation.
Can in investors count on Portuguese government policies being stable?
This is a sensitive topic in terms of investment but one where I think we still need to make important progress. We’ve undergone tremendous progress in terms of enabling businesses here in Portugal to create companies. You can now create a company in 24 hours. Information is easily accessible. All the interaction with the tax authorities is done online. It’s immediate. Everything works very well from that point of view.
In your opinion, which sectors should investors take note of?
I think technology innovation and development. There is a lot of Portuguese and non-Portuguese companies which are already doing great work in that area. There are very good examples of Portuguese technology capital companies that have become worldwide success stories. This generation is the most skillful and highly educated we’ve ever had; that’s the result great education. So we have multinational companies that are expanding their operations in Portugal because of this talent available. Either they are centers of innovation of development or they’re providing digital services because they find that they can find high-quality manpower for more reasonably prices.