Employing in Portugal

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Enter the Portuguese market without the requirement of opening a local entity.

Expanding into
Portugal

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all of the registration procedures that needs to be done and documentation required.

Street of Terena, old village at south of Portugal

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Expanding into Portugal – which is characterised by a highly-skilled, productive, and international workforce, complex employment and tax laws, an integrated infrastructure network linking to Europe, Africa, and beyond, as well as leading sectors in services, industry and manufacturing, exports, and agriculture – can bring excitement to the possibilities, but also significant stress to ensuring the entity with the country’s rigid legal structures and laws.

Ensuring compliance without sufficient knowledge of the country’s laws also adds stress to getting your new entity off the ground and ready to test new markets. Going at it without the proper support can increase the costs, time and risks involved.

Global expansion is a step for any business, regardless of your goal. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all of the registration procedures that need to be done and the documentation required.

This can be worked through efficiently and cost-effectively with the support of an international Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in the Portuguese market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Portugal

Learn all about expanding into Portugal and see what we can do to make your expansion easier.

Download our Guide to Portugal

Learn all about expanding into Portugal and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Portugal

Hiring Staff
in Portugal

The Main Sectors of the Portuguese Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

More than half (50.8%) of continental Portugal is dedicated to agriculture – grain, potatoes, tomatoes, olives, grapes; sheep, cattle, goats, swine, poultry, dairy products; fish. The north has various agricultural types (except for the Douro Valley), while the south has developed an extensive monoculture on cereals and olive trees.

Wheat (3,000 sq km) and corn (2,680 sq km) are produced in vast areas, followed by barley, potatoes, and rice. More extensive plantations are the vineyards, with 3,750 sq km, but the olive trees have a larger area of about 4,000 sq km. In 2020, the share of agriculture in Portugal’s gross domestic product was 2.11%, and its share in employment was 5.7%.

Most working residents in Portugal are employed in the services sector. The services sector accounts for around 75.3% of GVA and 70.1% of employment. Portugal has about 450 companies in the services sector, generating a turnover of 1.3-billion-euro, representing about 1% of the total GDP. Among these companies are well-known leading brands like Cisco, which already has three service centres based in Portugal.
Portugal’s logistics and warehousing market has witnessed positive growth over the past few years owing to increased investment by the government for the development of logistics infrastructure, growing E-commerce, and rising exports. Transport and logistics represent 6.5% of employment and 4.3% of GDP in the services sector.
This can form part of the services sector, but it is worth pointing out that Portugal has a world-renowned reputation for its creativity and culture. Books, movies, music, architecture, design, painting – the Portuguese create magnificent works that break the status quo and change perspective. The Portuguese Cultural and Creative Industries surprise the artistic community and are often invited to participate in world-class events.
The Portuguese National ICT Sector is a highly innovative and dynamic sector, which already represents nearly 10% of the Portuguese GDP, reaching almost 20 Billion US$ in total turnover, according to the latest data available from the National Portuguese ICT Cluster, TICE. It also employs over 80,000 people.
Portugal has a diverse manufacturing industry. It produces several cars and car parts, with factories focused on automobile and automobile parts production primarily concentrated in and around Lisbon, Porto, Setubal, Braga, and Aveiro. Investors and business owners in Portugal have also turned toward more technology-based products.

Goods like computer software and pharmaceutical products are now being produced with factories primarily located in the cities of Oeiras and Coimbra. Other modern industrial products manufactured in Portugal today include information technology, biotechnology, and aerospace technology. Value-added in Portugal was reported to be 11.86% of the total GDP in 2020 and approximately 25% of employment.

The Main Sectors of the Portuguese Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Seaview of the beautiful Marinha beach in Algarve, Portugal
More than half (50.8%) of continental Portugal is dedicated to agriculture – grain, potatoes, tomatoes, olives, grapes; sheep, cattle, goats, swine, poultry, dairy products; fish. The north has various agricultural types (except for the Douro Valley), while the south has developed an extensive monoculture on cereals and olive trees.

Wheat (3,000 sq km) and corn (2,680 sq km) are produced in vast areas, followed by barley, potatoes, and rice. More extensive plantations are the vineyards, with 3,750 sq km, but the olive trees have a larger area of about 4,000 sq km. In 2020, the share of agriculture in Portugal’s gross domestic product was 2.11%, and its share in employment was 5.7%.

Most working residents in Portugal are employed in the services sector. The services sector accounts for around 75.3% of GVA and 70.1% of employment. Portugal has about 450 companies in the services sector, generating a turnover of 1.3-billion-euro, representing about 1% of the total GDP. Among these companies are well-known leading brands like Cisco, which already has three service centres based in Portugal.
Portugal’s logistics and warehousing market has witnessed positive growth over the past few years owing to increased investment by the government for the development of logistics infrastructure, growing E-commerce, and rising exports. Transport and logistics represent 6.5% of employment and 4.3% of GDP in the services sector.
This can form part of the services sector, but it is worth pointing out that Portugal has a world-renowned reputation for its creativity and culture. Books, movies, music, architecture, design, painting – the Portuguese create magnificent works that break the status quo and change perspective. The Portuguese Cultural and Creative Industries surprise the artistic community and are often invited to participate in world-class events.
The Portuguese National ICT Sector is a highly innovative and dynamic sector, which already represents nearly 10% of the Portuguese GDP, reaching almost 20 Billion US$ in total turnover, according to the latest data available from the National Portuguese ICT Cluster, TICE. It also employs over 80,000 people.
Portugal has a diverse manufacturing industry. It produces several cars and car parts, with factories focused on automobile and automobile parts production primarily concentrated in and around Lisbon, Porto, Setubal, Braga, and Aveiro. Investors and business owners in Portugal have also turned toward more technology-based products.

Goods like computer software and pharmaceutical products are now being produced with factories primarily located in the cities of Oeiras and Coimbra. Other modern industrial products manufactured in Portugal today include information technology, biotechnology, and aerospace technology. Value-added in Portugal was reported to be 11.86% of the total GDP in 2020 and approximately 25% of employment.

Commercial Laws in
Portugal

General requirements

  • Providing written contracts for open-ended employment is not mandatory, but they must be drawn up in the case of a fixed-term, agency, and teleworking employment.
  • In the absence of a formal contract, the employer must provide a written statement of the essential working conditions within 60 days of employees starting work. These conditions are usually part of a written contract. The agreement must include all parties’ names, addresses and signatures, the work involved, and remuneration.
  • Written contracts are required for fixed-term, agency and teleworking employment.
  • There is no mandatory requirement regarding the language used in contracts, and English is often used. However, contracts are best bi-lingual, including a version in Portuguese, as this would be used in litigation.
  • Contracts and agreements cannot include clauses that reduce employee benefits from those that are either mandatory or subject to Collective Bargaining Agreements (CBAs).
  • Probation periods are allowed but cannot exceed 240 days for senior managers, 180 days for other managers and the highly qualified, and 90 days for others. Trial periods of 30 days are allowed for fixed-term contracts of six months or longer and 15 days in other cases.
  • Employers must comply with workplace policy requirements under the Labor Code. Companies employing more than seven must institute a code of good conduct prohibiting harassment. Companies employing more than 50 must institute reporting procedures among their workforces. Any internal policies (regulamento interno) must be posted in the workplace after mandatory consultation with employees’ representatives.

Tax Authorities

The Portuguese Tributary and Customs Authority (Autoridade Tributária e Aduaneira) – is a body of the Ministry of Finance of Portugal, which started its activities on the 1st of January 2012, and results from the merger of DGCI – Directorate General of Taxes (former Directorate General of Contributions and Taxes), DGITA (General Directorate of Informatics and Support to Tax and Customs Services) and DGAIEC (General Directorate of Customs and Special Consumption Taxes), succeeding in all the attributions and powers of these Directorates-General.

This body administers taxes, customs duties, and other taxes in Portugal, as well as exercises control of the external border of the European Union and the national customs territory.

Labour Authorities

The Authority for the Work Conditions (ACT) – promotes the improvement of working conditions through policies on the prevention of occupational hazards and by controlling the compliance with labour standards and laws concerning health and safety at work in all activity sectors, as well as in central and local administration services, including public institutes.

ACT is under the direct administration of the Ministry but endowed with administrative autonomy in all mainland territories.

Commercial Laws in
Portugal

Cloister of the Evora Cathedral, the largest cathedral in Portugal

General requirements

  • Providing written contracts for open-ended employment is not mandatory, but they must be drawn up in the case of a fixed-term, agency, and teleworking employment.
  • In the absence of a formal contract, the employer must provide a written statement of the essential working conditions within 60 days of employees starting work. These conditions are usually part of a written contract. The agreement must include all parties’ names, addresses and signatures, the work involved, and remuneration.
  • Written contracts are required for fixed-term, agency and teleworking employment.
  • There is no mandatory requirement regarding the language used in contracts, and English is often used. However, contracts are best bi-lingual, including a version in Portuguese, as this would be used in litigation.
  • Contracts and agreements cannot include clauses that reduce employee benefits from those that are either mandatory or subject to Collective Bargaining Agreements (CBAs).
  • Probation periods are allowed but cannot exceed 240 days for senior managers, 180 days for other managers and the highly qualified, and 90 days for others. Trial periods of 30 days are allowed for fixed-term contracts of six months or longer and 15 days in other cases.
  • Employers must comply with workplace policy requirements under the Labor Code. Companies employing more than seven must institute a code of good conduct prohibiting harassment. Companies employing more than 50 must institute reporting procedures among their workforces. Any internal policies (regulamento interno) must be posted in the workplace after mandatory consultation with employees’ representatives.

Tax Authorities

The Portuguese Tributary and Customs Authority (Autoridade Tributária e Aduaneira) – is a body of the Ministry of Finance of Portugal, which started its activities on the 1st of January 2012, and results from the merger of DGCI – Directorate General of Taxes (former Directorate General of Contributions and Taxes), DGITA (General Directorate of Informatics and Support to Tax and Customs Services) and DGAIEC (General Directorate of Customs and Special Consumption Taxes), succeeding in all the attributions and powers of these Directorates-General.

This body administers taxes, customs duties, and other taxes in Portugal, as well as exercises control of the external border of the European Union and the national customs territory.

Labour Authorities

The Authority for the Work Conditions (ACT) – promotes the improvement of working conditions through policies on the prevention of occupational hazards and by controlling the compliance with labour standards and laws concerning health and safety at work in all activity sectors, as well as in central and local administration services, including public institutes.

ACT is under the direct administration of the Ministry but endowed with administrative autonomy in all mainland territories.

FAQ

An Employer of Record (EOR) in Portugal facilitates company expansion into the Portuguese market by handling employment responsibilities such as labour contracts, compliance with local laws, tax contributions, and payroll for your employees. This allows a company to operate without establishing a local entity, which can expedite market entry and reduce compliance burdens. EOR services provide a legal structure to hire and manage local employees while the hiring company maintains operational control over their employees’ day-to-day activities.

To hire top talent in Portugal, combining talent acquisition strategies with Employer of Record (EOR) services can be highly effective. Talent acquisition focuses on identifying, attracting, and engaging skilled candidates through targeted recruitment processes. An EOR, on the other hand, can legally employ these candidates on your behalf in Portugal, handling all local legal, HR, and compliance issues. This allows your company to onboard skilled workers quickly and compliantly without setting up a local entity, streamlining the process of entering and operating in the Portuguese market.

Managing payroll in Portugal involves adhering to local regulations, tax laws, and employee rights. Companies can choose from several payroll options such as operating an internal payroll system, outsourcing payroll to a local provider, or using an Employer of Record (EOR) service like Bradford Jacobs. An EOR can handle payroll complexities including compliance, tax filings, and social security contributions, making it easier for companies to expand into Portugal without needing a local entity.

To hire employees in Portugal, it is not strictly necessary to establish a local entity like a subsidiary. Companies can use an Employer of Record (EOR) to legally hire and manage staff in Portugal without setting up a local entity. An EOR handles all legal, HR, and compliance aspects related to employment, allowing companies to operate in Portugal under the EOR’s established infrastructure. This arrangement can simplify entering the Portuguese market and managing payroll, taxes, and employee benefits compliantly.

FAQ

An Employer of Record (EOR) in Portugal facilitates company expansion into the Portuguese market by handling employment responsibilities such as labour contracts, compliance with local laws, tax contributions, and payroll for your employees. This allows a company to operate without establishing a local entity, which can expedite market entry and reduce compliance burdens. EOR services provide a legal structure to hire and manage local employees while the hiring company maintains operational control over their employees’ day-to-day activities.

To hire top talent in Portugal, combining talent acquisition strategies with Employer of Record (EOR) services can be highly effective. Talent acquisition focuses on identifying, attracting, and engaging skilled candidates through targeted recruitment processes. An EOR, on the other hand, can legally employ these candidates on your behalf in Portugal, handling all local legal, HR, and compliance issues. This allows your company to onboard skilled workers quickly and compliantly without setting up a local entity, streamlining the process of entering and operating in the Portuguese market.

Managing payroll in Portugal involves adhering to local regulations, tax laws, and employee rights. Companies can choose from several payroll options such as operating an internal payroll system, outsourcing payroll to a local provider, or using an Employer of Record (EOR) service like Bradford Jacobs. An EOR can handle payroll complexities including compliance, tax filings, and social security contributions, making it easier for companies to expand into Portugal without needing a local entity.

To hire employees in Portugal, it is not strictly necessary to establish a local entity like a subsidiary. Companies can use an Employer of Record (EOR) to legally hire and manage staff in Portugal without setting up a local entity. An EOR handles all legal, HR, and compliance aspects related to employment, allowing companies to operate in Portugal under the EOR’s established infrastructure. This arrangement can simplify entering the Portuguese market and managing payroll, taxes, and employee benefits compliantly.

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