Portugal Company Formation

Benefits of Expanding into Portugal

Business owners who intend to expand their ventures to European countries often consider places like Germany, France, or Belgium. While such countries do feature good business environments and stable markets, they don’t offer all the perks that expanding a business to places like Portugal provides.

Anyone that has visited Portugal on holiday might remember the country for its sunny beaches, rich culture, history, and delicious cuisine. However, all these factors can make it easy to overlook the fact that Portugal is actually a great place to do business. It’s not uncommon for entrepreneurs to visit the country and scope out the local markets before deciding to expand their businesses to this country.

If you’re interested in learning more about Portugal and what makes it so great for business, then this guide has you covered. We will go over the various benefits of expanding your business in this country. So let’s dive into it!

Benefits of Expanding Your Business to Portugal

Every entrepreneur and business owner must weigh up the benefits and drawbacks of expanding their business in a particular country. The good news is that the benefits of setting up branches or subsidiaries in Portugal greatly outweigh the drawbacks. These benefits include:

1. Fantastic Geographic Location

Portugal’s geographic location makes it excellent for businesses. The country is conveniently located in the South-West of Europe, meaning local businesses can access places like Africa, South America, and Europe through trade routes easily.

The country also has some of the busiest ports in the region. They serve as vital trade routes for the Mediterranean Sea, Atlantic Ocean, and Suez Canal. Businesses that wish to import raw materials and export finished goods will find it easy to do so, thanks to Portugal’s fantastic strategic location and trade routes.

The Portuguese government is also continually investing in the country’s ports. This means the port’s capacity is expected to increase in the coming years. They will also implement technology to make port activities more efficient for businesses. Any local company that will be using these ports for business activities can rest assured knowing that the Portuguese government will be doing its best to keep the ports functioning at their best.

2. Access to a Skilled Workforce

Portugal has preserved its rich history and culture in many ways. However, that doesn’t mean its society is held back from innovation. In fact, the country is home to many prestigious Universities and Colleges. This includes engineering schools and medical schools.

Portugal has a literacy rate of 96%, and it is believed that 44% of locals between the ages of 30 and 34 have completed College or University education. This implies that the country has a sizable skilled workforce that can fill important staffing roles for local businesses.

Therefore, business owners who expand their business from Europe can benefit from being able to choose from a wide variety of skilled workers. This could be especially advantageous if the business requires highly skilled workers in specialized niches such as AI software development or behavioural psychology.

3. Access to Strong Markets

Portugal probably doesn’t come to mind when people think of strong and resilient economies. However, this misconception is easy to clear up if you spend even a small amount of time researching the country and the way its economy is structured.

For example, most countries around the globe suffered a recession due to the COVID-19 pandemic. Much of this was driven by supply chain disruptions and government-ordained stay-at-home policies tanking business revenues. Many countries are still feeling the after-effects of this recession in 2023. However, Portugal’s economy bounced back incredibly quickly.

This European country’s economy saw gains in early 2021, and its GDP exceeded pre-pandemic levels by early 2022. Much of these gains are attributed to the influx of tourists in the country. Indeed, Portugal has remained a tourist hotspot, and this has lent to its economy’s resilience.

For this reason, businesses that expand to Portugal can enjoy the perks of operating in a relatively stable and resilient economy with strong markets. However, it is still vital for entrepreneurs and business owners to explore local markets beforehand if they intend to expand their venture to this country.

4. Government-Provided Benefits

Many entrepreneurs consider expanding their businesses to Portugal after learning about the government-provided business benefits. Businesses that perform research and development that can benefit the industry as a whole can enjoy financial assistance through a government scheme known as “Corporate and Entrepreneurial Innovation”. There is also a scheme called “SME Qualification and Internationalisation” that helps businesses by making them more productive and competitive.

The Portuguese state also offers vouchers for small and medium-sized enterprises in different stages of development to help bridge investment gaps. All these incentives help foster healthy industries and drive businesses to innovate and grow.

5. Business-Friendly Labour Laws

Hiring labour is vital for any business, but business owners must ensure they follow local labour laws during this process. You may be surprised to learn that labour laws vary greatly across Europe, with some places, such as France, restricting work weeks to a maximum of 35 hours and setting a high minimum wage of €11 an hour. 

Portugal’s labour laws are less strict and offer a good balance for both workers and businesses. Workers still enjoy protections such as enjoying 22 days off per year and being paid a minimum wage. Portuguese businesses can benefit from having to navigate through little to no hurdles when hiring or dismissing employees. This makes it easier for such companies to adjust their staffing as needed, which could be advantageous if the business’s popularity fluctuates regularly.

6. Good Quality of Life

Portugal also offers a relatively good quality of life. The country’s living costs are lower than that of many other European nations. There is also a well-established healthcare system consisting of both public and private providers.

This European country’s average life expectancy is 81, and it also enjoys a relatively low crime rate. All these factors could be important for business owners that intend to expand to or start a business in Portugal. This is because any staff they will be sent over from their home country will get to enjoy the quality of life benefits Portugal offers. This makes it more likely for them to settle in the country and continue working for the business.

7. Enjoying EU Benefits

Portugal is a member of the EU, and this means Portuguese businesses can enjoy all the benefits that come from these EU members. For example, such businesses trade freely with other EU member countries without having to deal with trade barriers such as tariffs that non-EU countries normally have to deal with.

The EU countries also have a total population of over 500 million. This creates the potential for Portuguese businesses to break into a massive Europe-wide market and increase their revenue. 

Most EU countries also enjoy political stability, so Portuguese businesses will rarely ever need to worry about political instability impacting their sales in other EU countries.

 8. Growing Economic Diversity

Portugal’s economy traditionally relied on a few key sectors, such as agriculture, tourism, and textiles. Businesses that exist in these industries flourished and enjoyed many benefits. However, those in other industries struggled from time to time.

The country’s economy has been diversifying in recent years. Today, there is a fantastic start-up culture that has helped facilitate many start-ups. This means Portugal would be a great place for entrepreneurs to test out start-up ideas.

Portugal has also become an important player in renewable energy. The country’s energy sector is looking to expand its solar and wind power capabilities due to the region’s sunny weather and powerful coastal winds. All this diversity means that businesses in different industries will be able to find a suitable spot for themselves in this country. 

Why Choose Company Formation Org?

As you can see, there are plenty of benefits associated with expanding your business in Portugal. If you’re interested in business expansion Portugal, reach out to Company Formation Org for assistance. We have helped many business owners expand their companies in this country and can guide you through the business setup and registration processes. Start doing business in one of the best European countries with our guidance.

Alternatively, you could look to buy an existing Shelf Company.