Portugal 2020 - IS: «Productive Innovation – Low density territories»

Open Calls until 07 de September, 2020



The current System of Incentives (SI), is calling for proposals by the announcement 08/SI/2020, with the aim to provide financial support for “Productive Innovation” projects that contribute to:

  1. Increasing business investment by large companies in innovative activities (product or process); or
  2. To reinforcement of SMEs qualification for the development of goods and services, through business investment in innovative activities that contribute to the progression in the value chain.

Typology of operations

In order to benefit from this SI, individual projects shall contain the following typologies::

  • Creation of a new business/company;
  • Increase of an existing company’s production capacity, (at least in 20% of the total production capacity when comparing with 2018);
  • Diversification of an establishment's production for products not previously produced by the company. Note that the eligible investment must exceed at least 200% the book value of the reused assets (in the production of the new goods); or
  • The alteration in the overall production process of an existing establishment. Note that the eligible investment must exceed the depreciation cost of the assets associated with the process to be modernized during the 3 preceding fiscal years (2016 to 2018).

Geographic scope and Beneficiaries Nature

The incentive is available for all companies, independently of its size (Small and Medium enterprises/SME and non-SME enterprises), nature or legal constitution.

The geographical area of application is the Portuguese Continent NUTS II (North, Center, Lisbon, Alentejo and Algarve), as long as they are carried out in low density territories predicted in Portugal 2020 CIC Determination of September 12, 2018.

Industry Scope

Projects that focus on the following economic activities (NACE) or sectors will be excluded from this IS:

  • Financing and Insurance – divisions from 64 to 66;
  • Defense (subclasses 25402, 30400, and 84220);
  • Lotteries and other betting games – division 92;
  • Lotteries and other betting games – division 92;
  • Fishing and aquaculture;
  • Primary agricultural production;
  • Steel, Coal, Navy Construction, Synthetic Fibers, Transportation, and Energy.


Rules and limits on expenditure eligibility

Under this IS, the following expenses are considered eligible:

  • Acquisition of machinery and equipment, as also the respective transportation costs and other expenses to put them in operational conditions;
  • Acquisition of computer equipment, including software (only if these investments are destined to the productive area);
  • Acquisition of national and international patent rights;
  • Licenses or technical knowledge not protected by patent;
  • Standard software or other developed specifically for a particular purpose;
  • Fees paid to chartered accountants (TOC) or statutory auditors (ROC), who must validate project investment expenses, up to the limit of € 5,000 (only for SME);
  • Engineering services related with the project (only for SME); e
  • Studies, diagnoses, auditing services, marketing plans, architectural and engineering projects, related with the investment project (only for SME).

Projects in the Tourism and Industry Sectors may include, as eligible expenses, the construction of new buildings, refurbishment and other constructions, since purchased from third parties and limited to a maximum of (as a percentage of total investment):

  • NUTS II North, Center and Alentejo :
    • 60% of the total project eligible expenses, in the case of projects in the tourism sector;
    • 35% of the total project eligible expenses, in the case of projects in the industry sector.
  • NUTS II Algarve:
    • 20% of the total project eligible expenses, in the case of projects in the tourism sector;
    • 50% of the total project eligible expenses, in the case of tourism sector projects that contribute to mitigating seasonality;
    • 50% of the total project eligible expenses, in the case of projects in the industry sector;
    • 70% of the total eligible project expenditures for projects in the industry sector that contribute to the development of innovative solutions based on R&D results and on the integration and convergence of new technologies and knowledge.

The minimum and maximum limit of eligible expenditure is € 75,000 and € 25 million, respectively.


Eligibility conditions

Each investment project should meet, among others, the following conditions:

  • Do not include expenses previously to the application date (including any advance payment);
  • Have the SME Certification updated;
  • Demonstrate the economic and financial viability1 and that the beneficiary have the resources of financing and the beneficiary must ensure at least 25% of the eligible expenses with own resources - with the realization of the equity until the date of the first payment request;
  • The project must have a maximum duration of 24 months and start the execution within a maximum period of 6 months, after the communication of the financing decision;
  • Demonstrate that bank financing has been approved by a credit institution with a protocol signed with Portugal 2020.


Calls are open until:

  • Phase I: from February 05 until March 16, 2020;
  • Phase II: from March 17 until June 29, 2020; and
  • Phase III: from June 30 until September 07, 2020.

The first funding decision shall be announced 60 working days from the closing date of application (indicative term).

Funding rates, nature and Incentive limits

Financial incentives will be granted in two separate components, namely:

  • 50% of the total amount through a non-refundable incentive, attributed non-definitively until the final project results evaluation; and
  • 50% of the total amount through a bank loan, associated with a financial instrument financed by Portugal 2020. This loan have a total repayment term of 8 years (2-year grace period and 6-year repayment period), during which no interest or any other cost are charged.

Funding rates:

  • Base rate of (i) 15% for Large companies and investments over 15 million euros, (ii) 35% for medium-sized companies and (iii) 45% for micro and small companies;
  • Which may be added by the following increases:
    • 10% for SME with investments below 15 million euros and who investments in industry 4.0;
    • 10% to be attributed to projects that develop the project in low density territories;
    • 5% to companies that create a net job creation equal or greater than (i) 20 for large companies, (ii) 10 for medium enterprises; or (iii) 5 for micro and small enterprises;
    • •5% for companies that do not need bank financing and finance the project with more than 25% equity.
  • The Maximum Incentive Rate is: 60% for Algarve and 75% for the remaining regions.

1 For the purposes of this incentive, a company is considered to have a balanced economic and financial situation, if it presents a minimum financial autonomy ratio of 15% for SME and 20% for Non-SME.

- (Equity / Total Assets ≥ 15% ou 20%).