Loan Funds are classified as alternative investment funds and are authorized to grant and acquire credits, including both performing and non-performing loans (NPLs). They can also participate in loans, subject to certain exceptions.
Loan Funds benefit from the same tax treatment as Venture Capital Funds (fundos de capital de risco), Loan Funds will not be subject to stamp duty.
Fund Tax
- Corporate Income Tax Exemption: Loan Funds are fully exempt from Corporate Income Tax on any income or gains.
- Stamp Duty Exemption: Unlike ordinary investment funds, which are subject to Stamp Duty on their net asset value periodically, Loan Funds will not be subject to this taxation. In practice, Loan Funds will operate as a tax neutral collective investment vehicle.
Investors Tax
Non-Resident Investors: Non-resident investors benefit from a full withholding tax exemption on distributions made by Loan Funds and on capital gains realized upon the redemption or disposal of participation units in the Loan Fund. This exemption does not apply to investors that are (i) legal entities directly or indirectly owned more than 25% by Portuguese-resident investors, or (ii) entities resident in blacklisted jurisdictions.
Resident Investors: Resident investors can also invest in Loan Funds. For natural persons, a flat tax rate of 10% will apply to distributions and capital gains realized upon redemption or disposal of participation units, compared to the standard tax rate of 28%. For corporate resident investors, the primary benefit is the deferral of taxation, which will only occur upon distribution or disposal of participation units.
