Guide · Eligibility
SME status when the parent company is foreign: what counts in Portugal
Portugal uses the EU definition of an SME: fewer than 250 employees, and either turnover of up to EUR 50 million or a balance sheet of up to EUR 43 million. The test looks past the Portuguese company. If another company holds more than 50% of its voting rights, or controls it in another way, you add all of that company's staff and figures. The Commission's guide says it in so many words: where the other company is based, inside or outside the EU, makes no difference.
So a new Portuguese subsidiary with five employees, owned by a foreign group with 600, is a large company for the Portuguese programmes, which use this definition. That changes which calls accept you, the grant rate you get and the corporate tax rate on your first EUR 50,000 of profit. Check it before you read any rate in a brochure.
Figures checked against the official sources between 10 and 19 September 2026. We never promise approvals.
- Medium-sized
- Fewer than 250 employees, and turnover up to EUR 50 million or balance sheet up to EUR 43 million
- Small
- Fewer than 50 employees, and turnover or balance sheet up to EUR 10 million
- Micro
- Fewer than 10 employees, and turnover or balance sheet up to EUR 2 million
- Linked companies
- Control, or more than 50% of the voting rights: add 100% of their figures
- Partner companies
- A holding from 25% up to 50%: add a share of their figures, in proportion to the holding
- Where the group is based
- Irrelevant. Companies outside the EU count in the same way
- Proof in Portugal
- The IAPMEI SME certificate, issued online
Autonomous, partner or linked: the three situations
The EU definition sorts every company into one of three situations, and each one tells you whose figures to count.
| Situation | When it applies | What you count |
|---|---|---|
| Autonomous | No company holds 25% or more of yours, and you hold less than 25% of any other | Your own staff, turnover and balance sheet |
| Partner | A holding of 25% or more, up to 50% of the voting rights, in either direction, with no control | Your figures, plus the share of the partner's figures that matches the holding. A 30% shareholder adds 30% of its figures |
| Linked | One company holds a majority of the voting rights in the other, can appoint or remove most of its board, or exercises a dominant influence through a contract or the articles of association | Your figures plus 100% of the linked company's, and of every company linked to it |
A wholly owned subsidiary is the textbook linked company. Chains count as well: the figures of your parent's other subsidiaries reach you through the parent. Companies that appear in the same consolidated accounts are usually treated as linked.
Three examples with a foreign owner
- A German manufacturer with 600 employees opens a plant in Portugal through a wholly owned company. Linked. The Portuguese company is large from day one. It can apply to the calls that accept large companies, at lower rates, and it pays the general corporate tax rate.
- Two founders living in London own a holding company, which owns a Portuguese company and a small UK agency. Linked, all three. Add the three sets of figures. With 25 people in total and EUR 3 million of combined turnover, the Portuguese company is a small enterprise.
- A Dutch company takes 30% of a Portuguese startup, and the founders keep 70%. Partner. The startup adds 30% of the Dutch company's staff and figures to its own, after the Dutch company has added its own linked companies. If that makes 400 employees, the startup's headcount grows by 120, and it may still be an SME.
Links through individuals count too. When the same person or group of people controls two companies that work in the same market or in neighbouring ones, the definition treats the companies as linked.
The investors that do not cost you your status
Some investors can hold from 25% up to 50% without turning your company into their partner, as long as they do not control it:
- Public investment corporations and venture capital companies.
- Business angels, when their total investment in your company stays below EUR 1,250,000.
- Universities and non-profit research centres.
- Institutional investors, including regional development funds.
- Small local authorities, with a budget under EUR 10 million and fewer than 5,000 inhabitants.
A different rule covers the public sector: a company is no SME when public bodies control 25% or more of its capital or voting rights, apart from the investors in the list above.
What SME status changes in Portugal
- Which calls you can enter. Most Portugal 2030 calls for companies are for SMEs. Some accept larger companies.
- The grant rate. State aid rules give small companies more than medium-sized ones, and medium-sized more than large. See Portugal 2030 grants.
- Corporate tax. The 15% rate on the first EUR 50,000 of profit is for SMEs and small mid caps. See the corporate tax rate guide.
- RFAI. SMEs keep the assets for three years, other companies for five years. See RFAI.
- Tourism credit lines. The LAQO performance premium is 25% of the Turismo de Portugal part of the loan for SMEs, and 5% for other companies.
When the status changes
A company that crosses a ceiling through its own growth keeps its status for a while: it loses SME status only after two consecutive accounting periods above the limits, and gains it after the same time below them.
An acquisition follows another rule. The Commission's guide says the two-period rule does not apply when a company passes the ceilings because its ownership changed through a merger or an acquisition, and the loss of status can be immediate. If a large group plans to buy into your Portuguese company while a grant application is pending, raise it with your advisers before the deal closes: the status can change on the day of the transaction, and the grant rate depends on it.
A new company with no approved accounts declares an estimate made in good faith, and the programme can check it later against the real figures.
The IAPMEI certificate
In Portugal you prove the status with the SME certificate (Certificação PME) from IAPMEI, the public agency for SMEs. You fill in an online form with your staff, turnover, balance sheet, shareholders and holdings, you sign a declaration that the data are true, and the system issues the status at once. IAPMEI asks for no documents at that stage. Public bodies that need proof of the status consult the certificate online.
The certificate is recalculated whenever something structural changes: a new shareholder, an acquisition, a new financial year. To calculate the status, the form needs the figures of partner and linked companies, foreign ones included. Get them from the group before you start.
What foreign groups get wrong
- Looking at the Portuguese company alone. A small subsidiary of a large group is large.
- Assuming companies outside the EU do not count. They count.
- Forgetting the founders' other companies. Shared control by the same people links companies in the same or neighbouring markets.
- Declaring the status first and checking later. The declaration is yours. A programme that finds a false SME status can recover the grant.
- Reading a rate in a brochure before settling the status. The rate you read is often the small-company rate.
Frequently asked questions
Does a foreign parent company stop my Portuguese company from being an SME?
It depends on the size of the group. You add the parent's staff, turnover and balance sheet to your own, in full when it controls you and in proportion when it holds from 25% up to 50% without control. If the total stays under the ceilings, you are an SME.
Do companies outside the EU count?
Yes. The European Commission's user guide states that the geographical origin of the related companies, inside or outside the EU, is not relevant.
Can a large company still get grants in Portugal?
Yes, in fewer calls and at lower rates. The tax credits stay open to large companies: RFAI and SIFIDE II apply whatever the size. Investment projects of EUR 3 million or more can also negotiate contractual tax benefits with the state.
We are two founders with several small companies. Do we add them up?
If the same people control the companies and the companies work in the same market or in neighbouring ones, yes. The definition treats them as linked through those individuals.
What happens if a large group buys us after we receive a grant?
Read the grant agreement and ask the managing authority before the sale. The agreement sets what you have to report, or have approved, during the project and in the years after it.
Official sources
The official texts are in Portuguese. The figures on this page were checked against them.
- European Commission: SME definition (checked 18 September 2026)
- European Commission: User guide to the SME definition (checked 19 September 2026)
- Corporate Income Tax Code (CIRC), article 87, as amended by Law 64/2025 (checked 18 September 2026)
- Investment Tax Code (CFI), article 22 (RFAI: scope and conditions) (checked 18 September 2026)
- Turismo de Portugal: Tourism Offer Qualification line (LAQO) (checked 10 September 2026)
- Investment Tax Code (CFI), article 2 (contractual tax benefits), as amended by Law 12/2022 (checked 19 September 2026)
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