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The Portuguese Innovation Agency (Agência Nacional de Inovação (ANI)) has published a revision to the Internal Regulation - Recognition of Suitability in R&D, which regulates the recognition of suitability in Research and Development (R&D) within the scope of the System of Tax Incentives for Business Research and Development (SIFIDE), in accordance with the guidelines set out in the European Commission's recently published (29 January 29 2025) ‘Competitiveness Compass’, which establishes a benchmark for promoting competitive and sustainable markets, encouraging the attraction of investment and the development of R&D projects with high added value.
Noteworthy changes:
- Changes to access criteria
The access criteria for incubated companies have been changed, and companies with up to three (3) years of activity are now eligible, without the requirement of an academic, scientific and technological base as an eligibility criterion.
With regard to the documentation required to validate compliance with this requirement, the updated version of the regulation streamlines this procedure significantly, requiring only a reasoned proposal from the incubator, which should describe the scope of the activities carried out since the company was set up, excluding the need to submit accounting proof of turnover and investment in R&D.
The eligibility criteria of the previous regulation, applicable to non-incubated companies, remain unchanged.
- Changes to the submission of the application for recognition
Foreign companies that have been established in Portugal for less than one (1) year may submit an application for recognition by presenting duly certified accounting proof of turnover and investment in R&D for the financial year prior to the application, reported by the entity that controls the establishment in Portugal, in the country of origin, instead of presenting the annual report.
Thus, companies recently incorporated in Portugal will be eligible to apply for recognition of suitability, based on the activity carried out in their country of origin.
It should also be noted that this change removes the obligation to submit two external technical opinions, issued by entities from the Portuguese Scientific and Technological System (SCTN) and signed by specialised experts. Instead, with this revision, only a detailed description of the R&D activities will be required, using the template available for this purpose on the SIFIDE website.
- Recognition procedure and deadlines
As part of this recent change, we also find the concept of conditional recognition, i.e. newly created companies are given a period of nine (9) months from the date of the recognition decision to submit the following documentation:
- i) Form 22/Annual report for the previous year (or equivalent document according to the relevant regulation); and
- ii) Organisational chart, highlighting the employees working for the entity and carrying out R&D activities.
In the case of (ii), the plan for hiring human resources for the following 9 months must be submitted, with the conditional recognition period running after the application.
These changes aim to simplify and speed up the recognition of suitability, promoting greater accessibility to tax incentives and funding for R&D activities, while encouraging innovation and the sustained growth of innovative companies.