PORTUGAL GUIDE
EMPLOY IN PORTUGAL WITH EASE
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- Remove restriction from only hiring from local markets
- Enter any international market without the requirement of opening a local entity
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.
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Portugal – The Economy
Portugal is a developed country with an advanced economy and high living standards. Additionally, it ranks highly in peacefulness, democracy, press freedom, stability, social progress, prosperity, and English proficiency. The economy of Portugal is ranked 34th in the World Economic Forum’s Global Competitiveness Report for 2019.
Most international trade is made within the European Union (EU). Other regional groups that are significant trade partners of Portugal are the NAFTA (6.3% of the exports and 2% of the imports), the PALOP (5.7% of the exports and 2.5% of the imports), the Maghreb (3.7% of the exports and 1.3% of the imports) and the Mercosul (1.4% of the exports and 2.5% of the imports).
Portugal is home to several notable leading companies with worldwide reputations, such as The Navigator Company (a major world player in the international paper market); Sonae Indústria (the largest producer of wood-based panels in the world); Corticeira Amorim (the world leader in cork production); Conservas Ramirez (the oldest canned food producer); Cimpor (one of the world’s 10th largest producers of cement); and EDP Renováveis (the 3rd largest producer of wind energy in the world).
The Portuguese currency is the euro (€), and the country has been a part of the Eurozone since its inception. Portugal’s central bank is the Banco de Portugal, which forms part of the European System of Central Banks.
The major stock exchange is Euronext Lisbon, which belongs to the NYSE Euronext, the first global stock exchange. Portugal is a member of the United Nations, the European Union, the Schengen Area, and the Council of Europe (CoE) and was also one of the founding members of NATO, the eurozone, the OECD, and the Community of Portuguese Language Countries.
Small and Medium-sized Companies
SMEs account for 68.3% of value-added and, for more than three quarters – 77.4% – of employment in Portugal. Both are ten percentage points higher than the respective EU average for SMEs.
Portuguese SMEs employ an average of 2.9 people, roughly one person less than the EU average.
The percentage of micro-enterprises in the total business population is higher in Portugal (95.4%) than the EU average (93%). The two most important SME sectors, manufacturing and wholesale and retail trade generate nearly half of all SME employment and value-added.
The annual productivity of Portuguese SMEs, calculated as value added per person employed, is around €22,900, only slightly more than half the EU average other factors; the definition of SMEs differs in the United States and the European Union.
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Country |
Portugal (República Portuguesa) |
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Capital |
Lisbon (Lisboa) |
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No. of Regions/Districts (States) |
Portugal is divided into 7 different NUTS II (Nomenclature of Territorial Units for Statistics), or regions: North; Centre; Lisbon Metropolitan Area; Alentejo; Algarve; the Autonomous Region of the Azores; and the Autonomous Region of Madeira.
Alongside NUTS, continental Portugal is divided into 18 Districts or States (Aveiro, Beja, Braga, Bragança, Castelo Branco, Coimbra, Evora, Faro, Guarda, Leiria, Lisboa, Portalegre, Porto, Santarém, Setúbal, Viana do Castelo, Vila Real and Viseu). |
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Principal Cities |
Lisbon, Porto, Amadora, Braga, Setúbal, Coimbra, Queluz, Funchal, Cacém, and Vila Nova de Gaia. |
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Language |
Portuguese (and Mirandese as a regional language) |
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Local Currency |
Euro (EUR) |
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Major Religion(s) (2021) |
Christianity (84.8% - of which 80.2% are Roman Catholic) - No religion (14.1%). |
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Date Format |
dd/mm/yyyy |
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Time Zone |
WET (UTC+1 /+2 in Summer DST) |
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Country Dial Code |
+351 |
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Population (2021) |
10.3 million |
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Border Countries |
Spain (1,214 km - 754 mi) |
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Tax Year |
1 January – 31 December (calendar year) |
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VAT % |
23% |
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National Minimum Wage |
EUR 822.5/month
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Taxpayer Identification Numbers |
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Leading Sectors - % of GDP (2020) |
Services (78.5%) - Industry (19.4%) - Agriculture (2.1%). |
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Main imports (2021) |
Cars, Crude Petroleum, Vehicle Parts, Packaged Medicaments, and Petroleum Gas.
Total EUR 94,7 billion |
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Main exports (2021) |
Cars, Vehicle Parts, Refined Petroleum, Leather Footwear, and Packaged Medicaments.
Total EUR 89,1 billion |
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Main trading partners (2021) |
Main Customers: Spain (27.7%), France (13.1%), Germany (11%), the USA (5.6%), Italy (4.5%), and the Netherlands (3.9%).
Main Suppliers: Spain (32.8%), Germany (12.5%), France (6.7%), the Netherlands (5.4%), and Italy (5.1%). |
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Government Type |
Unitary semi-presidential constitutional republic |
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Current President / PM |
President: Marcelo 'Nuno Duarte' Rebelo de Sousa (since March 2016)
PM: António 'Luís Santos da' Costa (since November 2015) |
Main Sectors of the Portuguese Economy
Portugal focuses on the following key sectors, which all have a significant impact on the country’s economy:
- Agriculture – 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%.
- Services – 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.
- Transport & Logistics – 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.
- Culture and Creative Industries – 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.
- ICT (Information and Communications Technology – 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.
- Manufacturing – 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.
Labour Contracts Law in Portugal
General requirements
Tax and Labour Authorities in Portugal
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.
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