Finances innovative projects in priority public policy areas against delivery of previously agreed measurable social outcomes.


The SOCIAL IMPACT BONDS financing instrument aims at financing, against an outcome-based contract, innovative projects committed to achieving social outcomes and efficiency gains in priority public policy areas, such as Social Protection, Employment, Healthcare, Justice and Education.

How it Works

The project should be implemented by one or more private entities and financed by one or more social investors, and it should set out to achieve measurable social outcomes, the indicators and targets of which must be validated beforehand by the public authority that oversees the respective sectoral policy.

Proposed social outcomes, as well as their respective indicators and targets, will be established and put into writing beforehand, based on the application. If said outcomes are achieved, the social investors will be fully reimbursed for the amount invested in achieving them.

Applications should be submitted in partnership with the organisations involved: implementing organisations (those that are running the project), social investors (those who are financing the project) and public authorities (that confirm whether the project is aligned with public policy and the relevance of the expected outcomes).

The financing needs of projects must be greater than EUR 50,000.

Who can apply?

Any private sector or social sector organisations (Associations, Foundations, Cooperatives, Private Charity Institutions (IPSS), etc.) may be social investors or implementing organisations. Neither, however, may have a controlling interest in the other.

Tax incentives for those who invest in Social Impact Securities

Pursuant to article 264 of Law No. 114/2017, of 29 December, which approved the State Budget for 2018, article 19-A, related to deductions for Social Impact Securities partnerships, was added to the Tax Incentives Statute, paragraph one of which reads:

“Cash inflow from social investors, which they recognise as an expense under social impact securities partnerships, shall be deemed expenses and losses for the tax period, in an amount corresponding to 130% of the respective total or up to a cap of 8/1000 of the sales turnover or turnover in services”.

This new tax incentive allows Social Investors to recognise 130% of the total amount invested in Social Impact Securities in each tax period as an expense, regardless of any future reimbursement.

The purpose of this tax incentive is to encourage Portuguese companies to invest in innovative and experimental projects that are trying new approaches to address social problems in priority public policy areas.

Investment in Social Impact Securities

Expenses with a 30% markup, for tax purposes Investor deducts 130% of the amount invested from his or her profit

Regardless of any future reimbursement.

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