By sector · Manufacturing and industry

Setting up production in Portugal: grants and tax incentives

A company that sets up or expands production in Portugal can combine three things: a Portugal 2030 grant of up to 60% of eligible costs for SMEs, awarded through competitive calls; the RFAI tax credit, worth 30% of qualifying investment in most regions; and IEFP hiring incentives for the jobs created.

Equipment is only funded inside a project submitted to a call, never as a stand-alone purchase, and it cannot be ordered before the application. For a foreign group, the size of the whole group decides which rates and which calls apply.

Free eligibility check →

Figures checked against the official sources between 10 and 19 September 2026. We never promise approvals.

Productive Innovation: the main grant

The Productive Innovation system (SICE Inovação Produtiva) funds what EU rules call initial investment: a new establishment, more capacity in an existing one, new products, or a fundamental change in the production process. It covers machinery, equipment, works tied to production and software. The 2026 call for SMEs funds up to 60% of eligible costs, with separate budgets for low-density territories and for the rest of the country.

It is aimed at activities that produce tradable, exportable goods and services. The EU regional aid rules and each call set the exclusions, and the list is longer than most people expect: primary agriculture, fishing and aquaculture, steel, coal, shipbuilding, synthetic fibres, transport, energy production and distribution, finance and insurance, parts of the defence sector, and lotteries and betting. Some calls also exclude sectors in a specific sub-region. Check your activity code against the call. It is competitive: applications are scored on innovation, on the impact on the company and the region, and on the soundness of the business plan.

Whether the call is open today, and until when, is on the open calls page.

Smaller investments: the regional calls

Micro and small companies with smaller projects usually fit the territorial base calls of the regional programmes better than the national call. Two examples open in 2026: in the Algarve, a call for micro and small companies in industry and in the sectors of the regional strategy, at up to 60%; in the Azores, a call for SME investment above EUR 50,000 aimed at the local market, at up to 65%.

Each region publishes its own calls, with its own sectors, minimum investment and deadlines. There is not always one open for a given region and sector.

Strategic technologies (STEP)

Companies that make digital, clean or biotechnology products have a dedicated line under STEP, the EU platform for strategic technologies. The annual plan of Portugal 2030 calls expected the STEP productive innovation calls to open between 31 August and 30 November 2026. On 19 September 2026 the official portal did not show them open. If your product is in one of these fields, this is the call to watch.

The tax credit that needs no call

RFAI gives back 30% of qualifying investment as a credit against corporate tax in Norte, Centro, Alentejo, the Azores and Madeira, and 10% in the eligible parts of the Lisbon area and the Algarve. There is no application and no competition. A new company can use the credit against 100% of its corporate tax in its first three tax periods, and carries the rest forward for 10 tax periods.

A grant and RFAI can apply to the same investment, within the maximum aid allowed for the region and the size of the company. For a plant that will take years to become profitable, the grant matters more. For a profitable group adding a line, RFAI may be worth as much, with less risk.

When equipment loses its support

  • It was already bought. Costs committed before the application are, as a rule, left out.
  • It replaces a similar machine. The grant and RFAI support initial investment, not replacement.
  • It is second-hand, or it is a vehicle. Each call has its own rules and often excludes both.
  • It is a purchase with no project. The evaluators score an investment project, not an invoice.

An example with numbers

A small industrial company in the Algarve buys EUR 80,000 of machinery in a modernisation project that fits the regional call. The grant can reach EUR 48,000, which is 60%.

If no call is open for its case, the same purchase can still reduce corporate tax through RFAI, provided the activity is on the RFAI list and the investment is an initial investment.

Illustrative figures, calculated with the maximum published rates. The final rate depends on the call, on the size of the company and on the merit of the project.

If the investor is a foreign group

  • Size is measured for the group. A Portuguese subsidiary of a large group is a large company for these programmes. It can still apply to some calls, at lower rates, and RFAI is open to it. See the SME trap.
  • Location changes the rates. The interior and the regions with weaker economies allow more aid. If the site is not chosen yet, compare before you sign a lease. See investing in the interior.
  • Timing is a legal matter. The application has to be filed before the first binding order. Group procurement calendars often collide with call deadlines, and the call wins.
  • Projects of EUR 3 million or more can negotiate contractual tax benefits with the state, through IAPMEI or, for the largest projects, AICEP, the investment agency.

Financing the part the grant does not cover

A grant covers a share of eligible costs and is paid, as a rule, after the cost is paid and proven. For the rest, and for the bridge until the refunds arrive, there are credit lines backed by Banco Português de Fomento, offered through commercial banks.

Frequently asked questions

Are there grants to buy machinery in Portugal?

Only inside an investment project submitted to a call, and only for machinery not yet ordered. A stand-alone purchase is not funded. Outside the calls, RFAI can return part of the investment through corporate tax.

Can a foreign company open a factory in Portugal with EU funds?

The applicant has to be a company established in Portugal, and the investment has to be in an eligible Portuguese region. Who owns the company is not a criterion, but the size of the group is: it decides whether the company counts as an SME.

How much of the investment will a grant cover?

For a micro or small company, up to 60% of eligible costs, with less for medium-sized companies and in the Lisbon area and the Algarve. The 2026 national call is for SMEs only. Larger companies have separate calls and the contractual regime. Eligible costs are never the whole project, and the grant is paid as a refund.

Does the company need to be running already?

No. A newly created company can apply, and creating a new establishment is one of the project types the grant supports. It needs organised accounts, a clean tax and social security record, and a business plan that shows how its own share is financed.

Official sources

The official texts are in Portuguese. The figures on this page were checked against them.

Planning a plant or a new line in Portugal?

Tell us the sector, the region, the size of the group and the timing of the first orders. We tell you which calls and credits fit.

Free eligibility check →
WhatsApp Free eligibility check →