Portuguese entrepreneurs got a boost from the country’s lawmakers today, as the first measures of a new “startup law” were unveiled at the Web Summit conference in Lisbon.
In conversation with Sifted, Startup Portugal executive director António Dias Martins laid out policies covering grants for every stage of business and incubators, reforms to stock options, and a new scheme to help unemployed people start their own companies.
Martins said that all of these measures would be in place by the end of 2022, as part of a larger, 20-step policy programme that will be rolled out over the next three years. The measures listed below will not require parliamentary debate or approval.
Here are the five policy measures that will be ready this year:
1. A definition for what a startup is
This might seem like an obvious one, but a clear and sensible definition for what constitutes a “startup” is a crucial first step in making sure that subsequent policies can help the right businesses.
Martins did not go into specifics, but assured the audience that Portugal wouldn't be falling into the same trap as Spain, where the new startup law doesn't apply to businesses that have been running for more than five years.
“We don’t agree with that [the Spanish limitation of five years]. I cannot give you the complete detail at this moment but it will be more than five years,” said Martins. “That’s because we think that there are some business models that need more time: things like life sciences and biotech where five years isn’t enough to prove the business.”
2. Startup vouchers
These “vouchers” are essentially grants for early-stage businesses, which mean founders don’t have to give up ownership in their company to access this capital. Martins said that €90m will be made available, divided into €30k grants.
“This will allow us to reach more than 3,000 startups — it's a great number,” Martins said.
These vouchers have been built on from a previous government scheme, which offered grants to individual entrepreneurs who could not be no older than 35. “There will be no age limit now,” added Martins.
3. Incubator vouchers
New government grants are also being made available for startup incubators — with a pot of €20m ready to deploy.
“Incubators need to step up and take it to the next level — they need to provide more professional help to entrepreneurs,” Martins said.
He added that both of these new grant schemes will be live by the end of the week, with online application pages ready to launch.
4. Stock option reform
In one of the more eagerly awaited policy reforms for startups, Martins promised that stock option taxation will be reformed in Portugal by the end of the year.
“At the moment, employees need to pay tax on stock options when they are given them, not when they cash out,” Martins explained. “That’s just not right. Other countries have other ways of doing this and we are revising the fiscal law to make it more attractive to founders.”
Martins said that the new tax regime for stock options would be “in line” with other developed startup ecosystems.
5. Empreende XXI
Empreende XXI is a new scheme from the Portuguese government, designed to give unemployed people the chance to start their own business.
The support will come in the form of loans of up to 85% of €175k (the entrepreneur will need to provide the final 15% themself). 40% of the loan will not need to be paid back, while a remaining 45% will be interest free.
Martins said that applications to the scheme will open at the end of November, and that the business models will be assessed by a network of incubators and accelerators.
“A primordial soup of entrepreneurship”
Also on stage for Martins’s announcement was Marcelo Lebre, cofounder of global payroll scaleup Remote — the country’s latest unicorn.
He was impressed by the measures, saying that “an ecosystem is not made up of a single vision” but a “primordial soup of different elements”.
“These measures will enable a lot of recent startups, but also empower people to start their own businesses,” said Lebre. “That is nothing short of tremendous.”