The Portuguese Government’s Program to Accelerate the Economy

On July 4, the Portuguese Government announced a package of 60 measures to help the national economy overcome 20 challenges, known as the “Accelerate the Economy Program” (Programa Acelerar a Economia).

Given the current context of Portugal, here are some of the most critical measures:

1. Gradual Reduction of Corporate Income Tax (IRC) to 15% – To stimulate economic growth and increase the competitiveness of Portuguese companies, the program proposes a gradual reduction of the corporate income tax rate, from the current level to 15%, at 2 percentage points per year. The measure aims to enhance the investment capacity of businesses and improve salary levels and, as a result, foster a more dynamic economic environment. For SMEs and Small MidCap companies, the IRC rate on the first 50,000 euros of taxable income will be reduced gradually to 12.5% over three years.
2. New Talent Attraction Regime (IFICI+) – Recognizing the importance of talent in driving innovation and growth, the IFICI+ program introduces a 20% tax rate on qualified professionals’ income. This measure is designed to attract highly skilled workers to Portugal, addressing the current talent shortage and boosting the country’s innovation capabilities. By broadening the range of professions and companies that are eligible for this incentive, the program aims to create a more attractive environment for talent. Note that this regime is what extends the scope of what is known as the NHR.
3. Reinforcement of Financial Incentives for Small MidCaps – Small MidCap companies play a crucial role in the Portuguese economy. Hence, the program strengthens the financial incentives under the PT2030 initiative, ensuring that companies have access to the necessary support to scale and expand. The measure aims to promote transparency in access to public funds, encouraging investment in innovation and participation in global supply chains.
4. Launch of the ‘State to Pay in 30 Days’ Plan’ – The plan states that public entities shall reduce payment terms to suppliers to no more than 30 days in order to improve liquidity and economic certainty. This initiative will significantly benefit SMEs by ensuring timely payments, thus enhancing their cash flow. Also, the creation of a current account between the Tax Authority and companies, which will eventually expand to the entire central administration, will further streamline financial transactions.
5. Industry 2045 – This measure entails the creation of a 20-year strategic vision and action plan for the sustainable reindustrialization of Portugal. The objectives are to strengthen Portugal’s role in European industrial policy, replace imports, and add high-value services. By focusing on sustainable practices, this measure is expected to modernize the industrial sector and promote long-term economic resilience.
6. Strengthening Tourism Sector Digitalization – Digital transformation is considered essential for maintaining competitiveness in the tourism sector. Hence, this measure promotes the digitalization of tourism companies through projects that enhance asset interconnection, tourist flow management, and innovation accelerators. The rationale is that, by leveraging digital tools, the tourism sector can improve service delivery and customer experience, positioning Portugal as a leading tourist destination.
7. Sustainability, Circular Economy, and Climate Agenda Plan for Tourism – This plan, which will be executed until 2030, is set to reinforce Portugal’s position as a sustainable tourist destination. The plan focuses on promoting circular economy practices and environmental sustainability, with the support of a network of regional tourism observatories, and intends to attract environmentally conscious tourists and investors to ensure the long-term viability of the tourism sector.
8. National Program for Technological Innovation Training – A program that will provide training in partnership with universities and polytechnics in order to boost innovation and the commercialization of new products. The initiative aims to develop skills that are essential for technological innovation, enhancing the country’s capacity to compete on a global scale. Through an adequate investment in human capital, Portugal can foster innovation and drive economic growth.
9. Launch of the Defense Economy Program – Strengthening the defense industry’s technological and industrial base, this is a measure that promotes the participation of Portuguese companies in European and NATO procurement programs. The objective is to improve the country’s defense capabilities and create new economic opportunities by encouraging collaboration in research.
10. Creation of the ‘PME Líder ESG’ Award – This award is introduced to encourage the adoption of environmental, social, and governance (ESG) practices. The recognition is supposed to incentivize companies to integrate sustainable and responsible business practices, thereby enhancing their competitiveness and contributing to a more sustainable economy.
11. Integration and Training Program for Migrants and Refugees in Tourism – Recognizing the potential of migrants and refugees, this program aims to improve their integration through highly specific training and job placement within the sector. The initiative seeks to address labor shortages and enhance the diversity and inclusivity of the workforce by leveraging the skills and the talents of these groups.
12. Complete the National Maritime Spatial Planning Plan – The approval of the Maritime Spatial Planning Plan for the Azores will complete the plan for the Portuguese maritime space, which will support economic activities and marine environment protection. The goal is to promote the sustainable use of marine resources, contributing to the blue economy and to environmental conservation.
13. Promote Innovation Supports in Blue Biotechnology – This measure provides financial support to blue biotechnology SMEs, for the innovation of consultancy services, in order to enhance their market presence through technological assistance and intellectual property management, and boost the blue economy whilst promoting sustainable innovation in marine resources.

The “Programa Acelerar a Economia” presents a strategic framework designed to improve Portugal’s economy by addressing key challenges and leveraging opportunities for growth and resilience. Focusing on measures that enhance competitiveness, attract talent, promote innovation, and ensure sustainability, among others, the package lays a strong foundation for a more prosperous economic future.

Although we’re not at the execution stage yet, its existence and substance reaffirm the Government’s commitment to a conscious and sustainable economic development.