SALARY PAYMENT IN Euro (EUR, €)
CONTRACT LANGUAGES Portuguese / English
PAYROLL TAX 26.50%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
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Located on the Southwestern edge of Europe, Portugal is a unique country culturally and economically. Similarly to its neighbor Spain, the country has a relatively high unemployment rate and low wages, but a developed education system and business infrastructure. This makes Portugal a potentially very cost-effective place to source a talented workforce.
Additionally, the government has been actively encouraging young, skilled remote workers to base themselves in the country, resulting in Portugal now having an influx of young workers that looks only to grow in coming years.
|Population 10.3M (labor force 5.1M)||Capital City Lisbon||Languages Spoken Portuguese (9th most spoken in the world)|
|Currency Euro (€)||GDP per capita $24,264||Ease of Doing Business 39th in the world|
|Minimum Wage €822.5/month (2022)||Average Wage €1,269/month (2022)||Paid Leave 22 days|
OECD forecasts expect economic growth in Portugal of 5.4% in 2022 and a reduced rate of 1.7% in 2023. Inflation rose to 6.3% in 2022 and there will be an expected rate of 4% in 2023. These are largely similar to the economic trends seen in other comparable countries. Overall, Portugal remains a good place to do business and is likely to rebound well in the coming years.
Portugal’s labor laws are relatively stringent when compared with countries such as the US, but are similar in nature to the rest of Western Europe. From the perspective of employers, the main laws relate to paid sick leave, vacation days, terminations, severance, maternity leave, and so on.
Whenever hiring in Portugal, it’s crucial that you understand and comply with all the relevant labor laws. Horizons provides specialized expansion consultancy to foreign businesses looking to hire in Portugal, helping you stay informed and compliant with regulations.
Portugal’s conservative religious past (and to some extent, present), along with its relaxed Southern European culture, both strongly influence modern business culture. For example, in general, personal relationships, family connections, and favors are more common in Portugal than they are in many other European countries. Face-to-face meetings are usually preferred, which can help to build personal relationships but can also limit productivity to some extent.
Business formalities like punctuality and extreme politeness are often not viewed as absolute necessities as they might be in many Northern European countries. However, the basics of business communication such as shaking hands, using non-offensive language, and respecting hierarchies should always be followed where possible.
Finding employees in Portugal is now usually done via the internet. Traditional channels like newspaper advertisements and physical job boards can still work, but the majority of searching and posting is done online. Social media platforms like LinkedIn and Facebook are commonly used, as well as various dedicated online job boards.
Face-to-face interviews are the standard in Portugal, so most potential employees will expect this. However, the global pandemic, along with a general cultural trend towards using more technology in day-to-day life, has led to a rise in online interviews via platforms like Zoom.
It is permitted to ask the candidate’s previous salary in Portugal.
However, we would generally advise to focus on the candidate’s expectation rather than their salary history.
Candidates changing jobs in Portugal generally command a 10%-20% increase on their previous salary.
When onboarding and training your new employees in Portugal, there is no one-size-fits-all approach. The main things to focus on are clear, concise communication of expectations, terms of employment, and company culture. You’ll also need to set aside sufficient time to provide enough training. Personal relationships are very important in Portuguese business culture, so you should be sure to introduce new employees to their colleagues and allow them time to get to know each other.
Portugal is a developed country in southwestern Europe. The internet connection in Portugal is good, ranked 17th fastest worldwide, and there are no significant restrictions on major websites used for professional communication.
Whatever your current remote-working stack, it will be suitable to use in Portugal.
Popular options include Microsoft Teams, Slack, ClickUp, Atlassian, and others.
National public holidays in Portugal in 2023 include:
|1 Jan, 2023||New Year’s Day|
|7 Apr, 2023||Good Friday|
|9 Apr, 2023||Easter Sunday|
|25 Apr, 2023||Liberty Day|
|1 May, 2023||Labor Day / May Day|
|8 Jun, 2023||Corpus Christi|
|10 Jun, 2023||Portugal Day|
|15 Aug, 2023||Assumption of Mary|
|5 Oct, 2023||Republic Day|
|1 Nov, 2023||All Saints’ Day|
|1 Dec, 2023||Restoration of Independence|
|8 Dec, 2023||Feast of the Immaculate Conception|
|25 Dec, 2023||Christmas Day|
There are also several regional and city holidays depending on your employee’s location in Portugal. When you engage Horizons to hire your employee, we can provide a detailed holiday list with all holidays your employee is entitled to.
Historically, the rate of annual salary increase sits at 3% or below. From 2022 to 2023, employers in Portugal plan to increase salaries and wages by an average of 3.2%, according to research conducted by the ECO. Additionally, more than 98% of employers interviewed plan to conduct salary reviews up to twice per year in Portugal to keep up with rising inflation and economic uncertainty. If you engage employees in Portugal, we recommend to review their salary at least twice per year, and to provide annual salary increases at a rate of approximately 4%-5%.
It is common to hire either freelancers or employees in Portugal.
However, hiring freelancers may come with additional risk; “employee misclassificiation” is when your freelancers are found to be, in fact, employees. If a determination of misclassification is made by governing bodies in Portugal, the penalties can be harsh.
If you are looking for full-time employees working on a core element of your business, it would be much safer for you to hire them under a subsidary or an employer of record like Horizons.
Yes, it is generally possible to hire foreigner in Portugal. The process to obtain a working visa in Portugal can take up to 90 days.
However, each visa application is unique. Please contact us for a free consultation on your specific situation.
There are three main ways of opening a subsidiary in Portugal:
This is the most practical way to open a subsidiary in Portugal. A lawyer uploads all documents to the commercial register portal. Later, once the documents are submitted, the Commercial Register has ten working days to respond to the application.
After the confirmation of incorporation, the government mails the registration certificate, company card, and payment slips to the registered address of the company.
When speed is of the essence, the quickest way to open a branch in Portugal is to visit the office in person. It takes about an hour and you can set up three types of companies:
For most, the process is essentially the same as online, but with one key difference – it requires a pre-approved Articles of Association, but it can always be changed later.
The applicant then receives an online code for access to the company’s commercial register for a period of three months. They will also receive a paper certificate.
The procedure is the same, except that the applicant must request an appointment with the relevant administrators. This is much slower and more expensive and is usually only used for forming a European public company.
However there are still responsibilities after the company is in existence. You must register it with the Registo Central de Beneficiátio Efective or RCBE. Created to comply with anti-money laundering laws, this administration seeks to increase the transparency, trust, and security of economic transactions between national and international companies operating in Portugal.
By engaging an employer of record (EOR) in Portugal, you can avoid this lengthy process and still hire employees in full compliance with the law.
Your business can easily hire employees in Portugal without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.