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We've highlighted some of the most frequently asked questions by our clients, to simplify the basics of topics such as attracting investment via European funds, financial advice or tax benefits. If you can't find the answer to your question, don't hesitate to contact us.
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SIFIDE is very broad in terms of potential beneficiaries: it is sufficient to be a company resident in Portuguese territory and carrying out an activity of an agricultural, industrial, commercial or service nature, or a non-resident company but with a permanent establishment in that territory.
The latter must fulfil the following cumulative conditions: taxable profits cannot be determined by indirect methods; it must not be liable to the State or Social Security for any contributions, taxes or levies and must have its payment duly ensured.
Finally, in both cases they must present Research & Development (R&D) expenditure. If these conditions are met, any company, whether service or not, is eligible under SIFIDE.
Yes. Any company can apply for SIFIDE, provided it fulfills the conditions mentioned above, simply by having R&D expenditure, which can happen through investment in funds.
As far as conducting R&D internally is concerned, this can happen formally - when there are dedicated departments and laboratories that continuously carry out R&D activities - but also informally.
Development teams, production teams, or even support teams can carry out R&D projects, either as part of a strategy or on a one-off basis to solve certain problems.
The key point in separating an R&D project from an engineering project or an industrial activity is the existence of an appreciable element of novelty and the resolution of a scientific and/or technological uncertainty.
This can be very easy to spot - a product that dictates a significant advance over the state of the art, but also often in problem solving, whether in what is your core business, your products, development, or production processes, or in less obvious areas and/or processes.
No. First, as an R&D project there is an associated risk, an uncertainty that needs to be resolved and, at the outset, it is not known how. Therefore, the project may not achieve its objectives. That is, to be successfully completed.
On the other hand, as already mentioned, projects may not focus on products or services that reach the market. As we have already seen, these may be internal to the companies. By the way, it should also be noted that although SIFIDE is annual, projects may last longer than one year.
In these cases, the overall objectives of the project are presented first, and the project as a whole is defended. Then the work carried out in the year in question is discussed.
The application is assessed by the National Innovation Agency (ANI) which - in case of approval - issues a declaration certifying the realisation of R&D activities by the company and the tax credit to which the company is entitled.
This declaration, together with the application form and its attachments which include, for example, an R&D balance sheet supporting the costs submitted, constitute the tax file.
As far as the benefit is concerned, companies then enter this value in Model 22, deducting the tax benefit from the tax payable.
Some companies value the benefits of SIFIDE so much that they fear losing them when applying for other R&D support mechanisms.
But the truth is that they do not lose them. SIFIDE can include financed projects, internal projects of the company - not subject to incentive -, or projects of both types, and there is no maximum number of projects per SIFIDE. In the case of funded projects, the tax benefit only applies to the percentage of investment that was not incentivised.
In cases where projects are not incentivised, the conditions remain the same.
If the investments fulfil the other requirements and conditions to qualify for RFAI, a company may have more than one RFAI project running simultaneously.
As an example, if a company has an ongoing SI Productive Innovation project of PT2020, in which it is benefiting from the RFAI on the same investment expenses and, in addition, has other "extra-project" investments that also constitute eligible expenses under this tax benefit, the latter configures another investment project.
This possibility is provided for in the Model 22 periodic income statement itself, i.e., in table 078-A of Annex D, where all the information on regional investment projects is placed, it is possible to add autonomous lines depending on the number of projects that the company has underway.
Recognition of an item as an intangible asset requires an entity to demonstrate that the item meets, first, the definition itself and, second, the criteria for its recognition.
NCRF 6 establishes three conditions for an expenditure to be defined as such an asset: identifiability, control, and future economic benefits.
It is therefore concluded, provided these conditions are met, that an intangible asset is subject to impairment if it has a limited duration.
Yes. All commercial or civil companies in commercial form, cooperatives, public companies, and other legal persons governed by public or private law with registered office or effective management in Portuguese territory, may deduct an amount corresponding to the conventional remuneration of share capital (RCCS), calculated by applying, limited to each financial year, the rate of 7% to the amount of contributions made up to 2M€.
This tax benefit is deducted in the calculation of the taxable profit for the tax period in which the contributions are made and in the following five tax periods. These contributions may be made by cash contributions, the conversion of credits, the use of the profits of the year itself in the context of the incorporation of a company or the increase of share capital, provided that the profit of the beneficiary companies is not determined by indirect methods and does not reduce its share capital with refund to the shareholders, either in the tax period in which the contributions are made or in the following five tax periods.
The Tax Authority has been considering that a tangible fixed asset is considered to be in "new condition" if it has not previously been part of the non-current assets of the company that intends to benefit from the tax benefit or of any other company.
Yes, it is eligible. This PPA has raised several doubts about its framework, as it may fall within the exception of eligible activities in the RFAI, more specifically in the sector of processing and marketing of agricultural products.
Where the activity of 'processing agricultural products' is concerned, it is only possible to benefit from the RFAI if the final product resulting from it is not an agricultural product according to the definition provided for in the TFEU and, as such, is not included in the list in Annex I to the Treaty.
Although Annex I to the TFEU includes several headings of Chapter 15 of the CN, it does not include heading 1509 which includes "Olive oil and its fractions, whether or not refined, but not chemically modified", so it can be concluded that CAE 10412 is eligible under the RFAI, provided that the other requirements and conditions are met in order to enjoy this tax benefit.
Yes, it is possible, in a single application, to frame investments in different establishments located in different regions, with the exception of the regions of Lisbon and Algarve. In these cases, it is necessary to submit an isolated application for these regions, and another one for the other(s).
Yes, micro enterprises are covered by this notice and the maximum incentive rate is 40%, non-refundable.
Yes, the eligible expenditure ranges from €250,000 to €25 million.
Operations in the renewable energy, agri-food, and tourism sectors in the NUTS III region of Alentejo Litoral are not eligible. However, there is a specific Notice for companies in this situation.
Productive machinery and equipment;
Computer equipment, including software;
Technology transfer through the acquisition of patent rights and licences;
Engineering services and studies, diagnostics, audits, marketing plans, architectural designs and studies or reports in the context of aligning the operation with the Do No Significant Harm Principle;
Construction of buildings and remodeling works (tourism and industry);
Rolling stock related to tourist activity (tourism).
Yes, it is possible to submit a new application, provided that the investment project is different from the previous one.
Yes, it is possible to submit the application now, because as soon as it is submitted, you can start implementing the investments. However, your analysis and decision will only be made in phases 3 and 4.
For companies to be able to submit applications to the incentive system, they must be legally constituted at the time of the application and have started their activity by declaration with the Tax Authority. Thus, there is no impediment for newly created companies.
In order to prove the SME dimension, the company must register in the electronic SME certification of IAPMEI.
The use of this certification is mandatory for all entities involved in procedures requiring SME status (Article 3(3) of Decree-Law No 372/2007 of 6 November).
Not using the SME certification to prove its status means that in the decision-making process, the managing authority classifies it as a Large Enterprise, which then has consequences for the level of incentive granted, since this is typically higher the smaller the size of the enterprise.
Companies of any nature and in any legal form that propose to develop investment projects that fall within the scope of COMPETE 2020 support may apply, including individual entrepreneurs. However, it always depends on the type of project in question, since in certain tenders this may be impeditive. Across the board, it is mandatory for companies to have organised accounting.
The company is in the process of obtaining a license for the workspace from the local authority and will then apply for a license to operate from the competent authority. While dealing with the respective processes, can the company apply for the aforementioned notice, presenting proof of licensing when signing the incentive contract, under paragraph c) of article 13 of Decree-Law no. 159/2014, of 27 October?
In response to the first question posed, it is clarified that, pursuant to Article 13(a) and (c) of Decree-Law No 159/2014 of 27 October, the beneficiaries' eligibility conditions are, respectively, to be legally constituted and to be able to legally carry out activities in the territory. In this regard, it is necessary to differentiate the situation of the company in terms of licensing, the licensing adjusted with the changes resulting from the project, as well as the fact that the investment is intended for the creation of a new establishment or the modernisation of an existing establishment.
In the case of a new establishment, the prior existence of a license is not mandatory, since it can only be granted after the execution of the project, however, for the purpose of implementing the project, the company must demonstrate that it meets the legal conditions for the execution of the investments and, for this purpose, it must submit the application for a license for the establishment and activity object of the project and obtain the license until the closure of the project.
In the case of a project carried out in an existing establishment of the company, the company must have a valid industrial license for the establishment concerned.
For this purpose, the company declares in the application form the legal conditions for the implementation of the investments, and for this purpose it must instruct the request for changes to the license for the changes resulting from the project and obtain the license until the closure of the project, or undertake to demonstrate that the project does not involve changes that require licensing.
It is also clarified that under the terms of paragraph 2 of art. 5 of RECI, the demonstration that it meets the legal conditions for the purpose of implementing the project (instruction of the license application at the competent authority), can be reported until the date of acceptance of the decision and its proof (electronic submission of supporting documentation) is allowed until the 1st Payment.
In addition to the head office, a factory, workshop, warehouse, subsidiary, or branch situated in a topographically identified place distinct from the head office is also to be regarded as an establishment. In or from establishment economic activities are carried out for which one or more persons work on behalf of an enterprise. Subsequently, all investment items should be linked to the establishment to which it will be allocated.
Article 2(v) of the RECI defines "Net job creation" as "the net increase in the number of workers directly employed in the enterprise, calculated as the difference between the monthly average of the year of project completion and the monthly average of the pre-project year". The information available in the HEI should be considered.
M&A is the English acronym corresponding to Mergers and Acquisitions. This type of operations are supported by Purchase and/or Sale Mandates, within the scope of which target companies are identified and potential national and/or international investors are selected, appropriate to the companies' strategic objectives.
When two companies understand that the best path for growth and expansion is for both to come together to conceive a new one, a merger happens. In practice, the two companies become one.
Acquisition is an operation characterized by the total or partial purchase of shares in one company by another, taking into account that the acquiring organization holds more than 50% of the capital and starts to control management decisions.
The reasons for the occurrence of this type of operations tend to be strategic and/or financial.
Among the strategic reasons, we highlight as an example the objective of diversifying the company's products or market, internationalization or consolidation of presence in the current market.
At the same time, regarding financial reasons, we highlight the objective of increasing the company's revenue and profits, or even obtaining access to new financing or lower interest rates.
Valuing a business is a process that aims to help define the fair value of the company. The value defined by this assessment is what will be considered in processes of buying and/or selling companies, raising capital and in merger or spin-off operations.Discover the 3 different perspectives that are usually used in the process of evaluating a company https://www.yunitconsulting.pt/pt/conhecimento/blog/avaliacao-de-empresas-porque-e-relevante/654/
The value of a company or business depends on many factors, namely the continuity scenario and macro and microeconomic assumptions. Historical performance, trends in the sector of activity, resources and internal competences as well as the client portfolio and geographic distribution are some of the factors that influence the value of a company.
Learn more about how companies are evaluated https://www.yunitconsulting.pt/pt/conhecimento/blog/fusoes-e-aquisicoes-sabe-determinar-o-valor-da-sua-empresa/1046/
Any decision taken to improve the productivity or competitiveness of a business must consider its value. A business valuation should be carried out periodically to update values, following market trends and changes in the company. You never know when an opportunity for growth may arise, whether through the entry of investors into the company's capital, or a process of mergers and acquisitions!
PMI is the English acronym for Post Merger Integration. The PMI team works in relation to the post-merger integration process, with the aim of harmonizing operations and managing the organizational and cultural differences of the companies involved in the transaction.
It is a fundamental element of the operation to ensure that the expected results and benefits are achieved. Improper implementation of post-merger integration can lead to wasted opportunities, internal conflicts and even transaction failure.
Due Diligence is normally a demanding process where a potential buyer hires an independent entity to assess, in detail, the financial strength and potential of a business they intend to acquire, to ensure that they will make a good purchase. It is an essential and important process of reviewing the information provided by a company that is in the process of being sold, by the potential buyer, before making the purchase with the aim of validating and/or confirming the financial data, income and expenses, contracts with customers and suppliers and other relevant aspects of the business.
Although the Due Diligence process is normally carried out by the buyer, there has been an increase in the practice of due diligence carried out by the seller, vendor due diligence (VDD).
SPA, from English Shares Purchase Agreement/ Stock Purchase Agreement.
As the title reveals, this instrument is a purchase and sale contract. However, due to the object of the operation – quotas or shares issued by legal entities – the SPA contains some specificities, since the shares or quotas of a company are transacted here, a dynamic and constantly changing “entity”.
Therefore, the seller and the buyer generally establish in greater detail the quality of the asset being transferred, the responsibility of each party regarding the liabilities and assets of the target company and the mechanism for resolving any disputes arising from the contract, among others. .
An NDA, Non Disclosure Agreement is a contract that provides for the confidentiality of information shared between the parties. It is a very important document in the context of buying and selling companies as it establishes the conditions for the exchange of confidential information between the parties, stipulating the use that can be made of this information, who has access to it and what the consequences are. in case of violation.
