Tax credit · Investment
RFAI: Portugal's investment tax credit
RFAI (Regime Fiscal de Apoio ao Investimento) is a tax credit for companies that invest in productive assets in Portugal. In most of the country, 30% of the qualifying investment comes off the company's corporate tax bill, up to EUR 15 million of investment, and 10% on anything above that. In the Lisbon area and the Algarve the rate is 10%.
It is not a grant and there is no application. The company claims it on its own corporate tax return for the year of the investment, and what it cannot use that year carries forward for 10 years. Because nobody approves it in advance, the file that proves the investment qualified is what matters if the Tax Authority asks.
Figures checked against the official sources between 18 and 19 September 2026. We never promise approvals.
- What it is
- A credit against corporate income tax (IRC) for initial investment in productive assets
- Nature
- Tax credit. Not a grant, not a loan
- Rate
- 30% up to EUR 15 million in Norte, Centro, Alentejo, the Azores and Madeira; 10% in the Lisbon area and the Algarve
- Yearly cap
- 50% of the tax due, or 100% in a new company's first three tax periods
- Carry forward
- 10 tax periods
- How to claim
- On the corporate tax return (Modelo 22). No prior application
- Foreign-owned companies
- Same rules as any company taxed in Portugal
What RFAI is, and who can use it
RFAI is part of the Portuguese Investment Tax Code. It rewards what EU state aid rules call initial investment: setting up a new establishment, increasing the capacity of an existing one, diversifying into products the establishment did not make before, or making a fundamental change to its production process. Replacing a worn-out machine with a similar one is not initial investment.
It is open to companies of any size that pay corporate tax in Portugal, keep organised accounts and work in one of the sectors on the official list. The list is set by ministerial order, by activity code. It covers, among others, manufacturing and extractive industries, accommodation and restaurants, IT services and research and development. Retail is not on the list. Neither is the processing and marketing of the farm products listed in Annex I of the EU Treaty, which rules out most wineries, olive mills and dairies (Ordinance 282/2014, article 1). Steel, coal, fishing, forestry, shipbuilding, synthetic fibres, transport and energy are out as well.
Ownership is irrelevant. A Portuguese subsidiary of a foreign group claims RFAI on the same terms as a family firm from Aveiro.
The rates, by region
The rate depends on where the investment is made, following Portugal's regional aid map.
| Where the investment is made | Investment up to EUR 15 million | Part above EUR 15 million |
|---|---|---|
| Norte, Centro, Alentejo, the Azores and Madeira | 30% | 10% |
| Eligible parts of the Lisbon metropolitan area and of the Algarve | 10% | 10% |
Two limits apply each year. The credit cannot exceed 50% of the corporate tax due for the period. For a company in the tax period in which it starts activity and in the two that follow, the cap is lifted to 100% of the tax due, unless the company was created by a demerger. Whatever is left can be used in the next 10 tax periods.
On top of the credit, RFAI allows an exemption or reduction of municipal property tax (IMI) for up to 10 years on buildings used in the investment, and of property transfer tax (IMT) and stamp duty on their purchase. These depend on the municipality, so they are worth raising with the town hall early.
What counts as eligible investment
- New tangible assets used in the business: machinery and equipment, bought new.
- Buildings, in four cases only: factories, administrative premises, and buildings used for tourism or for audiovisual production. Other buildings do not count, and neither does land, except in extractive industries.
- Some intangible assets: technology acquired through patents, licences and know-how. For companies that are not SMEs these are capped at half of the qualifying investment.
- Salary costs of some new jobs: since 2024 the law also accepts the wage costs of jobs created for staff at level 7 or 8 of the National Qualifications Framework (a master's degree or a doctorate). For companies that are not SMEs, these salary costs and the intangible assets together cannot pass half of the qualifying investment. A job claimed this way cannot also carry IFICI.
- Not eligible: passenger cars, furniture and decoration (hotel equipment used in a tourism business is the exception), social facilities, second-hand assets, and anything not used in the company's operations.
The conditions that come with it
RFAI is easy to claim and easy to lose. The company must:
- Keep organised accounts, with taxable profit not assessed by indirect methods.
- Have no overdue debt to the Tax Authority or Social Security, or have the payment properly secured, for example through a payment plan you are keeping to.
- Not be a firm in difficulty under EU rules.
- Keep the assets in the company and in the region for at least three years if it is an SME, or five years otherwise, counted from the date of the investment. If the minimum useful life of the asset under the tax rules is shorter, that shorter period applies.
- Create jobs with the investment and keep them until the end of that period.
The job condition is the one that catches companies out. Selling the machine or losing the posts created before the minimum period ends means paying the credit back, with interest.
A worked example
A company in the Centro region buys EUR 200,000 of new machinery to open a second production line, and hires two operators to run it.
The RFAI credit is 30% of EUR 200,000, which is EUR 60,000. If the corporate tax due for the year is EUR 40,000 and the company is past its first three tax periods, it can use 50% of that, EUR 20,000, this year. The remaining EUR 40,000 carries forward for up to 10 tax periods. If the company were in its first three tax periods, it could use the credit against the whole EUR 40,000.
The same investment made in an eligible part of the Lisbon area would give a credit of 10%, EUR 20,000.
Combining RFAI with grants and with SIFIDE
RFAI and SIFIDE II reward different costs, investment and research, so the same company can use both.
RFAI can also sit on top of a Portugal 2030 grant for the same investment, as long as the total aid stays within the maximum aid intensity allowed for the region and the size of the company. When a grant already takes the project close to that ceiling, there is little or no room left for RFAI on the same assets. This is a calculation to do before the investment, not after.
Frequently asked questions
Do I need to apply for RFAI in advance?
No. There is no application and no approval. The company claims the credit on its corporate tax return (Modelo 22) for the period in which the investment is made, and keeps a file that shows why the investment qualifies. The Tax Authority can ask for that file years later.
Can a newly created company use RFAI?
Yes, and it gets the better cap: in the tax period in which it starts activity and in the two that follow, the credit can absorb 100% of the corporate tax due, instead of 50%. A new company with little tax to pay in its first years carries the credit forward for 10 tax periods.
Does RFAI apply in Lisbon and the Algarve?
Only in the parts of the Lisbon metropolitan area and of the Algarve that are on Portugal's regional aid map, and at the lower rate of 10%. In Norte, Centro, Alentejo, the Azores and Madeira the rate is 30%.
Is a guesthouse or a hotel eligible?
Accommodation and restaurants are on the list of eligible sectors. What has to qualify is the investment itself: a new establishment or new capacity, with new assets, jobs created and the assets kept for the minimum period. Buying an existing building to carry on as before is not initial investment.
What happens if the company makes no profit?
A tax credit needs tax to reduce. With no corporate tax due, nothing is used that year and the credit carries forward for 10 tax periods. If you do not expect to pay corporate tax in that window, RFAI is worth little to you and a grant matters more.
Official sources
The official texts are in Portuguese. The figures on this page were checked against them.
- Investment Tax Code (CFI), article 23 (RFAI: tax benefits) (checked 18 September 2026)
- Ordinance 282/2014: sectors eligible for RFAI, and the sectors that article 1 excludes (checked 19 September 2026)
- Investment Tax Code (CFI), article 22 (RFAI: scope and conditions) (checked 19 September 2026)
- Ministerial Order (Portaria) 282/2014: activity codes eligible for RFAI
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