Establishing a business in Portugal: financing

Starting a business involves making investments, which can pose a challenge for many people with promising ideas. However, there are many ways to get around. Here are some examples of how to get the financing you need.
Establishing a business in Portugal: financing

Starting a business involves making investments, which can pose a challenge for many people with promising ideas. However, there are many ways to get around. Here are some examples of how to get the financing you need.

Content available in Portuguese.


If you have an idea for starting a business, you’ll have to secure funding for your enterprise. In this article, we have some ideas for you on how to get financing:

Family, Friends and Fools, also known as the 3Fs, is a common term in startup slang, and is a popular way of obtaining financing for businesses that involve a low investment. It means using people who are close to us, available to help and that also might want a return on the business.

Crowdfunding is a collective financing system, made through an online platform, which allows several people to make donations of small amounts, often in exchange for symbolic counterparts. Fundraising through this modality can be done on platforms such as, for example, Kickstarter, GoFundMe, PPL, European Crowdfunding Network and Indiegogo.

Equity Crowdfunding, like crowdfunding, is a collective system through online platforms. In this case, as a counterpart, investors get a participation in the company. In Portugal, this type of financing can be found on the Seedrs platform.

Peer-to-Peer Lending is collaborative financing platform that offers a low-cost financing alternative for micro and small businesses with at least two years of activity and a regular financial and tax status. Basically, through a platform, people lend directly to companies, on more favorable terms for both parties. In Portugal, this service is provided by the Raize platform.

Bank credit is the most conventional type of financing. If you choose this method, it is important that you review the offers from several institutions to ensure the best interest rate. You should also check the fees associated with the loan. As a general rule, this alternative requires you to provide guarantees to ensure that the money borrowed to you gets repaid. The most common guarantees used are the mortgage of a property, such as a house, or a guarantor.

Mutual guarantee society is a private system developed specifically for situations in which companies do not have sufficient guarantees to access bank credit. It is up to the mutual guarantee company to provide financial guarantees for your loan (as if it were a guarantor), allowing you to unlock a bank credit for your company.

Microcredit is a loan for lower amounts, between 500 and 2,500 euros, which does not require guarantees and is aimed at entrepreneurs and micro-enterprises with viable initiatives. There are already many traditional banking institutions offering this type of service.

Instituto do Emprego e Formação Profissional (Portuguese Welfare) has several support programs, namely Creation of Own Employment and Creation of Companies. The first benefits those who are receiving unemployment allowance, while the latter benefits those who are registered in the employment center, not receiving any allowances, such as young people looking for their first job or self-employed (whose monthly income is less than the minimum wage).
Both provide access to special MICROINVESTE credit lines (financing up to 20 thousand euros for investments up to 20 thousand euros) and INVEST + (financing up to 100 thousand euros for investments between 20 thousand and 200 thousand euros), benefiting from advantageous interest rates and guarantee (under the mutual guarantee mechanism), as well as technical support for the business project. For those who are receiving allowance, the Creation of Own Employment support, allows it to be received in full (at once and not monthly) to be invested in a business.
Empreende XXI is another program that helps you create, develop and finance new business projects. This is a program developed by IEFP, in partnership with Startup Portugal. Applications are now closed.

Business Angels invest in businesses that are still in an embryonic stage, also providing guidance and mentoring. In exchange for financing a business, they have a minority position in the company. Visit the website of Investors Portugal – the Portuguese association of early stage investors.

Venture Capital entities specialize in investing in emerging companies, which translates into the acquisition of part of the capital. Participations are temporary (between three to seven years) and are particularly focused on innovative startups, with great potential for growth and profitability. As a rule, the investment amounts are higher than those provided by a Business Angel.

Portugal Ventures is a venture capital firm that invests in seed and early-stage companies operating in Digital, Engineering and Manufacturing, Life Sciences and Tourism. This venture capital firm focuses on early seed and seed funding with startups that have relevant business in Portugal. You can check the open calls. Also every month, Portugal Ventures opens doors to get to know about new projects through its Open Days.


Public support

Among public and European funds, the Portugal 2030 materializes the Partnership Agreement established between Portugal and the European Commission, which sets out the main strategic objectives for the implementation, between 2021 and 2027, of the global amount of 23 thousand M€. You can check the Annual Notice Plan.

The European Union is also funding several projects, within the Recovery and Resilience Plan (PRR). Startup Portugal is the managing entity for two of these measures, titled Vouchers for Startups – New Green and Digital Products – and Vouchers for Incubators and Accelerators.
IAPMEI – Institute for the Support of Small and Medium Enterprises and Innovation promotes a wide range of programs, initiatives and services, with a view to supporting this sector.

Its programs focus on supporting entrepreneurship, boosting business innovation and innovation management, and promoting and monitoring collective efficiency dynamics, namely clusters, collaborative networks and technology transfer.

The Banco Português de Fomento (Portuguese Development Bank) has several programs for startups: Deal-by-Deal, a program of co-investment, designed to carry out direct investment or financing operations in companies, in co-investment with private investors; Linha de Apoio ao Empreendedorismo e Criação do Próprio Emprego; and Programa de Recapitalização Estratégica.

Banco Português de Fomento (Portuguese Development Bank) also manages a social impact fund, the Social Innovation Fund. This instrument aims at supporting projects that offer innovative solutions to tackle societal problems based on their sustainability and potential to positively impact the community, within the scope of the United Nations Social Development Goals.

If you are looking for opportunities in the tourism sector, NEST – Tourism Innovation Center is the entity to reach out to, with funding program opportunities for startups and scaleups.


Awards and competitions

Throughout the year, there are several institutions that challenge new companies, especially startups.

Startup Portugal selects each year a group of startups to represent Portugal in the Web Summit, with our program Road 2 Web Summit. Besides special conditions to attend the conference, this program also helps startups and entrepreneurs prepare their presence and pitch for Web Summit in dedicated bootcamps. The Web Summit, in its turn, in all its editions holds a contest between several startups, such as the Startup Pitch.

Other examples include Startup Lisboa’s Entrepreneurship Awards, namely the João Vasconcelos Award – Entrepreneur of the Year, awarded yearly to promote a spirit of initiative and to foster and promote innovation.

The Young Entrepreneur Award is also one of the most emblematic and oldest entrepreneurship competitions in Portugal, promoted by ANJE, the National Association of Young Entrepreneurs.


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Startup Portugal Team • January 10, 2024