The study “Venture Capital and SIFIDE in Portugal — Economic Impact Assessment,” conducted by Investors Portugal, in collaboration with Nova SBE, reveals that every decade, investment increases by 0.16%, real wages rise by 0.73%, and patent filings grow by 22.87%.
The analysis finds that companies supported by venture capital funds grow more rapidly, hire more employees, offer better wages, and demonstrate higher productivity.
On a macroeconomic level, this type of financing translates into GDP growth, increased export capacity, and enhanced national innovation.
Furthermore, the study estimates that investments through SIFIDE funds have a long-lasting impact and high return, as these funds channel significant capital into companies with strong Research and Development (R&D) components.
By the end of the third year, companies receiving venture capital increase their workforce by approximately 50 to 60% and more than double their salary expenses and business volume.
For investing companies, the salary level also increases, employment rises by 40 to 50%, and revenues and profits grow.
Study authors João Duarte and Pedro Brinca, from Nova SBE, confirm that capital flows supported by SIFIDE benefit not only the recipient companies but also the investment vehicles themselves, reinforcing their long-term sustainability.
The report also examines the cost-benefit relationship of tax incentives, emphasizing that the initial cost to the Portuguese state is temporary, while the effects on companies are enduring.
The impact on employment, tax revenue, and economic growth significantly outweighs the incentives provided.
In the year the benefit is granted, additional income from VAT, personal income tax, and corporate tax, along with Social Security contributions, results in a positive balance, leading authors to conclude that “the program pays for itself in two years and generates lasting fiscal gains for the state.”
Therefore, the authors argue that extending similar benefits to all venture capital funds and ensuring the predictability of incentive mechanisms “is crucial for enlarging the impact on Portugal’s entrepreneurial ecosystem.”
Based on these findings, Investors Portugal reiterates the call for policymakers to consolidate and expand fiscal instruments supporting venture capital, ensuring the country positions itself as an innovation hub in Europe.
The study by Investors Portugal, in partnership with Nova SBE, analyzes nearly two decades of statistical data from 2006 to 2024 to evaluate the economic impact of venture capital and SIFIDE funds.
Established in 1997, SIFIDE (Tax Incentive System for Business R&D) is a tax incentive scheme allowing companies to deduct a portion of their R&D expenses from their corporate tax.
