#EditorialFomento: Tax Planning, Capitalisation and Competitiveness: A Strategic Opportunity

Within its mission as the National Promotional Bank, Banco Português de Fomento plays a central role in supporting the capitalisation, investment and sustainable growth of Portuguese companies. In this context, tax planning should be regarded as a strategic dimension of business management, inseparable from financing, investment and capital structure decisions.

In an economic environment marked by intense competition, pressure on margins and the need to strengthen financial resilience, companies are challenged to adopt solutions that promote not only operational efficiency, but also the robustness of their financial structures. The Portuguese tax framework, which is constantly evolving, provides a relevant set of instruments and incentives that, when integrated into a coherent strategy, can make a decisive contribution to this objective.

Tax planning consists of anticipating, analysing and organising a company’s economic activities with a view to the lawful optimisation of its tax burden, while simultaneously ensuring legal compliance and legal certainty. More than a technical exercise, it is a strategic decision-support tool, with a direct impact on liquidity, investment capacity and the company’s attractiveness to investors and financiers.

A significant part of public policies supporting companies has increasingly focused on strengthening equity, recognising that excessively leveraged structures tend to limit growth capacity and increase vulnerability to economic shocks. In this area, taxation plays a relevant role as an economic policy instrument, by creating favourable conditions for capitalisation and the mobilisation of long-term investment.

Within the scope of its activities, Banco Português de Fomento, through the funds it manages and the capital and quasi-equity instruments it provides, seeks to promote more balanced financial structures, less dependent on traditional bank debt and more aligned with medium- and long-term investment horizons. The articulation between these financial instruments and well-structured tax planning enables companies to enhance the economic and tax benefits associated with strengthening equity and attracting qualified investment.

Incentives for productive investment, innovation and business capitalisation — including mechanisms to reinforce equity and favourable frameworks for the operation of investment vehicles — are particularly relevant when integrated into a global financing strategy. These mechanisms contribute to improving financial autonomy ratios, strengthening credibility with institutional investors and creating more favourable conditions for the implementation of productive investment and innovation projects.

Financing decisions have relevant tax implications. In many tax systems, including the Portuguese one, interest expenses on debt are generally deductible, although subject to the applicable limitations on net financing costs, whereas the remuneration of equity does not benefit from the same treatment. This asymmetry may encourage excessive reliance on debt.

However, strategic tax planning goes beyond the simple maximisation of deductions. It involves assessing the overall impact of the capital structure on the company’s financial sustainability, taking into account limits on the deductibility of financing costs, financial autonomy ratios, the risk of over-indebtedness and the requirements of investors and financial institutions.

At the same time, several tax regimes have been created to encourage the strengthening of equity, bringing its tax treatment closer to that of debt. Benefits associated with capital increases, profit retention or quasi-equity instruments, often framed within mechanisms promoted by Banco Português de Fomento, are examples of measures that, when integrated into tax planning, promote more balanced financial structures.

A sound capital structure tends to reduce the weighted average cost of capital, increase the confidence of investors and creditors and improve the ability to finance growth projects. The reduction of financial risk also contributes to greater stability of future cash flows — a determining factor in the valuation of any company.

"Tax planning should therefore be regarded as a strategic management tool and not merely as a technical obligation."

Bernardo Alves, Coordinating Director of Tax Advisory , BPF

By enabling cost reduction, improved liquidity, support for structural decisions, enhanced compliance and the promotion of more balanced financing structures, taxation becomes a central element in the sustainability and competitiveness of companies. In a framework such as the Portuguese one, marked by specific incentives and constant adaptation to economic dynamics, organisations that integrate tax planning into their strategy are more solidly positioned to grow, attract investment and create long-term value.