The executive director of Startup Portugal defends the continued application of the non-habitual residents regime and incentives for pension funds to invest in 'startups'.
Asked whether the measures foreseen in the State Budget for 2024 (OE2024) are sufficient, António Dias Martins considered that they are important and proposes that “some adjustments should still be made”.
The first, out of a total of three, is that “the non-habitual resident regime must continue to apply to employees and investors of 'startups' and 'scaleups'”, he stated.
António Dias Martins states that this “has been a very important argument” for attracting and retaining talent in Portugal, “but also for attracting investment”, clearly being a measure with a return and “positive impact” for Portugal.
“It was something that distinguished us and it is something that really makes us look good in photographs when compared to other ecosystems, and we cannot lose that”, he warns.
The second adjustment is “to start taking the first steps towards designing incentives for [private] pension funds to start investing in 'venture' capital and 'startups'”, he points out.
The executive director of Startup Portugal recognizes that it is not possible to introduce this type of measures in OE2024, but suggests “legislative authorization” to work on the issue and present, “by the end of 2024, something that will come into force in 2025.” ″.
“We want these concrete steps to be taken from the beginning of 2024. And this involves doing a lot of work and creating, in fact, conditions for this process to advance, because it is about encouraging our most successful 'startups' and the 'scaleups' (…) staying in Portugal”, he explained.
These private pension funds, he said, are “the main financiers of startup activity” in the United States.
“Now, in Portugal and in Europe, therefore it is a European problem, [these private pension funds] have an almost symbolic role in financing 'startups' and 'venture' capital because there is a regulatory regime in force in Europe that allows them to it forces you to provision 50% of what you invest in these areas as costs at zero point”, he explains.
And he concludes that “there is no greater disincentive for the investor than on the day he is investing to say that he has already lost half the amount he is investing”.
These European rules exist for reasons of prudence.
“It was enough for private pension funds operating in Portugal to invest 2% or 3% of their portfolios in these 'startups' and 'venture' capital areas for us to radically change the panorama and the 'funding' capacity for these companies in Portugal”, refers, removing the very great incentive they currently have.
Because “when they look for larger investment rounds (…) they have to go abroad, namely to the United States, to go after investors, who are financed by pension funds, and who have the capacity to make these larger investments”, he adds .
António Dias Martins states that at the beginning of the activity, Portugal has “several mechanisms”, from 'vouchers', to incubators, among other measures. The question arises when technology “develops, gains potential and is successful and needs larger rounds of investment”.
As “we have no way, here in Portugal and even in Europe, to do this”, the technology companies turned to the United States, where they later ended up transferring their headquarters.
Despite there being elections in March, António Dias Martins considers that “these types of measures are important for the country, regardless of the parties, regardless of the specific governments”.
The aim, he added, is to create better conditions for business activity in Portugal and to attract investment to Portugal”. And he said he had “a total response” from parliamentary groups, members of the Government and the Government cabinet.
The majority of parliamentary groups, he stated, “support this type of measures and adopt this type of logic and this type of initiatives” to boost the economy.
“I am hopeful that this will be able to pass and happen, regardless of this moment of greater doubts that we are now experiencing”, he added.
The third proposal “is an adjustment to the 'stock options' tax regime” so that “shareholders with shareholdings above 20%, in the case of larger companies, are also included in this more favorable tax regime”.
In other words, the current regime, enacted simultaneously with the new law on 'startups', “is one of the most competitive in Europe and allows” us to finally “manage to have in Portugal a regime applicable to 'stock options' that is quite interesting and competitive”.
This means that “these companies are already able to offer their employees, in addition to the monthly salary (…), an additional stimulus to attract them, to retain them in their companies”, allowing 'startups' to “compete with large multinationals in search of recruitment and to recruit good and qualified staff”, he adds.
Thus, “at the moment liquidity, the effective final rate that affects profit (…) is only 14%, which is a very interesting rate. This applies to legally recognized startups, for all their workers, all their corporate bodies and all their shareholders. Therefore, 'startups' are covered”, he points out.
Now, if it is “a 'scaleup' or a larger company (…) then all workers are included and shareholders are only included those who have up to 20% of capital, those who have more than 20% in these companies larger ones are excluded and we think that this distinction should not be made between founders”, he considered.
Regarding the proposals in OE2024, António Dias Martins states that the “IRC reduction is good news for 12,5%”. But he disagrees with the collection limit of 50.000 euros, which “is too low” and “should fall”, he concludes.
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