hire employees in

Portugal,
made easy.

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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Horizons-owned entity with local country experts in Lisbon.

We offer fair, scalable, and transparent pricing on Portugal PEO service. Contact us for a cost breakdown

End service in Portugal with no additional penalties or fees.

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Portugal

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Hire Employees in Portugal - Overview

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.

Facts & Stats

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

Portugal: Business Environment

Business outlook

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.

Business regulation

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.

Business culture

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.

Recruiting employees in Portugal

Recruiting employees in Portugal – Overview

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.

Interviewing employees in Portugal

Interviewing employees in Portugal – Overview

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.

Can I ask the candidate’s previous salary in Portugal?

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.

What is the typical salary increase at a new job in Portugal?

Candidates changing jobs in Portugal generally command a 10%-20% increase on their previous salary.

Onboarding employees in Portugal

Onboarding employees in Portugal – Overview

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.

Best remote working tools to use in Portugal

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.

Holiday schedule in Portugal- 2023

Holiday Schedule in Portugal [2023]

National public holidays in Portugal in 2023 include:

Date	Holiday name
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.

What is the typical salary increase employees in Portugal expect?

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%.

FAQs

Should I hire freelancers or employees in Portugal?

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.

Can I hire foreigners in Portugal?

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.

How do I open a Portugal subsidiary?

There are three main ways of opening a subsidiary in Portugal:

1. Online

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.

2. In-person

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:

unipersonal LLC
LLC
or a public limited company

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.

3. Traditional

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.

How do I hire employees in Portugal?

Hiring employees in Portugal is simple and straightforward. If the employee is a local or EU citizen, there is no need for a working visa. If you’re looking to hire your employee in Portugal risk free, contact Horizons today.

Hiring in Portugal, Made Easy

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.

Success stories from businesses we’ve helped enter and grow in new markets.

Client Testimonials

"As a seed-stage, London-based startup, we were initially hesitant to expand internationally due to the administrative workload involved. Horizons took the headache out of the process, allowing us to hire a team of software engineers in Germany."

Gabor SzedlakCo-founder & COO at MindLabs (UK)

"I truly appreciated the thoroughness and the professionalism of Horizons personnel while we hired internationally with them. They were knowledgable on all subject matters pertaining to international employment."

Gary PaskyVP Software Development, PICS ITech (USA)

"On deciding to begin commercial activities in Asia Pacific, we needed a provider to handle the employment and remuneration of our workforce. With Horizons the result was fast, efficient, and fit-for-purpose. We recommend Horizons as an EOR provider.”

Chris MorrellManaging Director, Schaeffler Group (Germany)

"The collaboration with the Horizons team is excellent. Both our local employee as well as our HQ in Germany are more than pleased with the support provided and the simplicity of the service. We can highly recommend the Horizons solution to anyone."

Christoph EngelbertCo-Founder & CTO, Clevabit (Germany)

"We needed an EOR that could provide expert support for payroll in APAC. We are pleased with Horizons’ expertise and the fact that they are flexible, responsive, and easily accessible from Belgium. They were able to provide services within the short timeline we required."

Katia FlamandHuman Resources, Devian Chemicals (Belgium)