Recruiting Top Talent in Portugal

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Portugal Top Talent

Finding and recruiting top talent in any overseas territory poses many potential barriers for companies taking the steps to build their international profile. This is certainly the case in Portugal, which is a long-term member of the European Union (EU), having joined in January 1986, and then joined the Schengen Area in March 1995. Portugal adopted the Euro as its currency in January 1999.

In 2021 Portugal’s Gross Domestic Product (GDP) reached 251 billion US dollars to rank the nation 49th in the world, with the Organization for Economic Cooperation and Development (OECD) predicting growth of 5.8% for 2022. Portugal ranks 43rd in GDP per capita at US$24,457.

This potential – and the challenges it brings – underlines why Bradford Jacobs’ global experience is indispensable for taking the smartest recruitment route into Portugal – ideally placed for expansion among other EU members and further afield.

The Recruitment Process in Portugal

Portugal’s business environment tends towards hierarchy with employees showing considerable respect for age and status, often to the detriment of advancing ideas and progress. Being overly respectful to titles and seniority can put taking individual responsibility on the shelf.

However, under pressure Portuguese employees are creative in solving crises – which can often surface due to lack of planning or staying to a scheduled timetable.

These are all considerations when moving into the employment market, either for individuals or for international companies hiring staff in Portugal.

Speaking Portuguese and having other languages boosts opportunities for jobseekers, particularly in the services and tourism sectors – although this can be by-passed for those working online or in IT. The increasing number of global companies operating in Portugal also increase the options for foreign jobseekers.

The path to employment is also easier for citizens from European Union (EU) nations, as they do not require a visa or work permit.

Portugal’s Institute of Employment and Professional Training (IEFP) provides support, services for jobseekers, and works in partnership with EURES. Citizens from the European Union (EU), European Economic Area (EEA) and Switzerland can search through the EURES jobs’ portal that links jobseekers with potential employees.

In-comers can count on Portugal’s comprehensive framework of regulations and collective agreements safeguarding employment rights.

Recruitment is the first stage of making your company operational and competitive in Portugal. It is vital to know where to locate the finest talent to be a perfect fit for your company’s expansion plans. So … contact Bradford Jacobs.

International companies intending to run their own payroll for staff in Portugal must establish a legal entity subsidiary. The most popular choice is to open a private limited liability company, a Sociedade por Quotas or LDA with at least two shareholders.

The company must then follow strict procedures to register and onboard employees. Steps include:

  • Registering with the local social security office to obtain employees’ Social Security Identification Number (NISS) from the Social Security Institute (Instituto de Segurança Social) within 24 hours of starting work
  • Obtaining company tax code (Numero Fiscal de Contribuinte) from the local office of the Director General of Taxes (Direcçao-Geral dos Impostos) and the company identification card (Número de identificaçäo de pessoa coletiva, NIPC)
  • Obtaining employees’ Tax ID Number (Número de Identificaçăo Fiscal, NIF) and tax card and registering with the Portugal Tax and Customs Authority (Autoridade Tributária e Aduaneira, AT)
  • Providing photocopy of Citizen’s Card, ID Card for local employees

Additional requirements apply to foreign employees, including:

  • Providing a valid passport
  • Providing Residency Card (Cartão de Residencia) from the Immigration and Borders Service (Serviço de Estrangeiros e Fronteiras, SEF)
  • Photocopy of residence permit
  • Employment contract verified by employer and identifying the employer’s legal representative
  • Photocopy of individual’s social security document from home country, with registration number (if a European Union citizen)

In the case of non-European Union citizens, a photocopy of their work visa and completed foreign workers’ identification form

Legal Checks on Employees in Portugal

Scope: Allowable questions must generally be strictly relevant to the role in question and require the candidate’s permission.

Medical Checks: Unless these are legally required for certain positions, employers cannot ask an applicant to submit to a medical examination or pregnancy test.

Drug Tests: Allowed only for the protection of the employee or third parties or if necessary for the specified role. The employer must provide written reasons for asking for the information.

Educational Qualifications and References: Checks are allowed.

Criminal Record Checks: These are allowed only if relevant to certain types of roles – such as security guards or working with children – to obtain a criminal record check certificate. The employer must give the reasons in writing for requesting the information.

Discrimination: Issues covered by Portugal’s Labor Code should be avoided. The Code prohibits discrimination on grounds of gender, gender identity or sexual orientation; parentage or family, social or marital status; nationality, ethnic origin, or race; religious, political, or ideological beliefs or trade union membership.

Required: Ensuring non-European Union, European Economic Area and European Free Trade Association citizens have required immigration documents.

Basic Facts on Hiring in Portugal

Companies hiring staff for expansion into Portugal must comply with a framework of employment regulations generally covered by the Labor Code, with mandatory provisions enhanced by collective agreements. European Union directives may also apply. Basic requirements include:

  • Formal written contracts are common for indefinite, open ended employment but not mandatory
  • 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 the written contract
  • 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; 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 workforce and any internal policies (regalement interno) must be posted in the workplace after mandatory consultation with employees’ representatives

After hiring and onboarding, employers must consider other considerations. Minimum standards apply to such as sick leave, minimum wages, working hours, maternity allowances, paid vacations, termination, and severance, notice periods and social insurance payments. Other rules regulate workplace discrimination and harassment.