Portugal Announces Major New Investment Incentive Package

7 October 1999

Portugal Announces Major New Investment Incentive Package

    LISBON, Portugal--Oct. 7, 1999--ICEP, Investment, Trade and Tourism of Portugal, recently announced significant improvements to its incentive package for investors.
    Most importantly, the qualification level for fiscal support for investment has been drastically lowered from a previous level of 5 billion escudos, or $26.5 million, to just 1 billion escudos, or $5.3 million.(a)
    "This new fiscal regime will ensure that Portugal remains the most competitive location for investment anywhere in Europe," said Diogo Tavares, executive vice president of ICEP. Portugal received a record $8.9 billion in foreign direct investment in 1998.
    "Portugal does not believe in a one-size-fits all approach to companies that wish to invest. We believe that when all of the factors are taken into consideration, Portugal's incentive package is the most attractive and flexible in Europe," continued Tavares.
    The tax incentive is a good example of the flexibility within the incentive package. The tax incentive works as a the tax credit that can go up to 20% of the eligible investment and be used towards a variety of tax deductions throughout the contract, including corporate tax, property transfer tax, local property tax and stamp tax.
    The percentage of the tax incentive allocated to each investor is calculated taking into account several factors, such as location of the project, number of jobs created, target sector of activity, technological innovation, environmental protection and interaction with national scientific institutions.
    Projects considered for this new incentive program have to fall under the following economic activities: information technology and related activities, extractive and manufacturing industries, tourism, as well as agri-business.
    ICEP is the Portuguese government's "one-stop-shop" for major investors. It provides a full range of support, including provision of information on sites, buildings and workforce issues, utilities, costs and suppliers. It can also assist with incentive negotiations and support for expatriate workers.

(a) based on an exchange rate of $1 = 188 escudos