On the Technology index, Portugal took the 20th position in the world, and on the Public Institutions index, the Portuguese Republic is the 15th best. Meaning Portugal doesn’t just have favorable taxes and policies for investors and foreigners, It is one of the best places to start a business in Europe.
After several structural reforms, the Portuguese economy continues to recover, with more favorable conditions for foreigners and investors. Largely based on exports. The economy has been thriving since 2010.
In this article, we will be giving you an overview and insights that you need to know before starting a business in Portugal. You’ll also get to see business opportunities in this part of Europe, the largest economic sectors, GDP, employment rate, and working conditions.
The business model in Portugal
Like most places around the world, Portugal also has a dichotomy between the type of business it accepts and is allowed to run in the country. Portugal allows both online businesses and physical business.
On the Spot Firm
Empresa na Hora popularly referred to as “On the spot firm in Portugal” is one of the most popular ways to start a business in this part of Europe. This model allows an individual or group to set up a company or subsidiary in Portugal in less than two hours at a single contact point.
As long as the individuals or partners have all of the necessary documents needed for the registration, the company/subsidiary can be up and running immediately at the desks of any “On the Spot” Firm offices available. This allows them to do business in the country and also gives the business a certificate of incorporation.
Incorporation in Portugal costs EUR 360 or EUR 220 if incorporated with pre-approved bye-laws. When registering a new business in using this model, The investor or partners must:
- Choose a name or select one from the list of pre-approved names.
- Obtain a company name certificate.
- Choose one of the pre-approved standard company deeds at the Empresa na Hora.
- Present your identification documents and Social Security number.
- Obtain articles of association and commercial registration.
- Corporate identification card.
Empresa Online or an online company allows individuals or groups to set up a company in the Portuguese Republic through the Internet. Unlike the “on the firm” setup that less than an hour, online companies can take up to 3 days to set up.
Should I invest in Portugal?
Portugal was among the countries that were hit by the economic crisis in the late 2000s. Thanks to new policies, reforms, and laws that were implemented in the banking sector, pensions, and the Portuguese republic has gained a foot in economic competitiveness and diversified of its exports. Here are some of the best reasons why you should invest in Portugal:
- Favorable business environment and conduct – 34th according to World Bank’s Doing Business 2019 report.
- Modern & quality infrastructure.
- A skilled multilingual workforce with a slightly lower cost.
- Attractive benefits and low taxes to foreign investors, co-operations, and FDI.
- Easy access to Portuguese-speaking markets in Africa, Europe, and America.
- For more information, consult the website AICEP (Portugal Investment) and the, which ranks the country 34th in its ranking of countries by ease of doing business.
The main weaknesses of Portugal’s economy are :
- High unemployment rate – 8.9% in 2018.
- High levels of private and public debt.
- The rigidity of labor laws.
- Low productivity.
- Small population.
Largest economic sectors
Manufacturing accounts for more than 33% of all Portugal’s exports. Portugal is the fifth-largest producer of tungsten, eighth-largest producer of wine, and the highest producer of cork.
The major industries in the Portuguese republic include oil, petrochemistry, wine, cement, automotive & ship industries, cork, electrical & electronics industries, machinery, pulp & paper industry, beverage, injection molding, textile, ceramics, footwear, leather, and furniture. But the most vibrant sectors in the country are agriculture, industry, and services.
Most imports to Portugal come from EU countries like the UK, Germany, Spain, France, and Italy. Portugal’s exports usually go to other countries in the EU
GDP & employment rate in Portugal
Domestic demand in the country is now also growing solidly. After receding in the crisis, there are now new employment opportunities in Portugal. The unemployment rate has fallen from 17% to less than 7%. The economy has notably increased its reliance on renewable energy sources, such as solar energy and wind power.
The unemployment rate in Portugal increased by 65% between 2002 and 2007. That is, there were 270,500 unemployed citizens in 2002, which increased to 448,600 in 2007. Today, the unemployment rate in Portugal is as low as 17%.
GDP growth in 2006 was the lowest in all of Europe. Still striving, Portugal has made a significant increase in it’s GDP, raising its standard of living to that of its EU comrades. Today, Portugal’s GDP is worth 245 billion US dollars and makes up 0.02% of the world’s economy.