Greetings from ProCoders! In 2024, Portugal continues to solidify its reputation as a prime destination for entrepreneurs looking to break into Europe’s dynamic markets. But why?
With its strategic location, favorable business climate, and strong economy, Portugal is a top choice for starting a business. To shed light on this process, we spoke with Oleg Kopachovets, our CEO at ProCoders, who has successfully established a business in Portugal.
In this interview, Oleg shares insights on moving to another country, business registration, and residence permit requirements. He also offers tips to help aspiring business owners make informed decisions when choosing Portugal as their next business destination.
Portugal, with its competitive labor market, offers a unique solution to this challenge.
*When asked why he chose Portugal as the hub for his business, he states:
*
In fact, according to recent data, the average net earnings in Portugal are approximately €16,943 per year, significantly lower than the European Union average of €28,217. This makes Portugal an attractive destination for companies looking to optimize labor costs while accessing a skilled workforce.
The country is also home to numerous universities nurturing young talents ready to venture into the IT market, standing tall compared to other hubs like Croatia and Bulgaria. Moreover, an added advantage is the high English proficiency among the youth, which Oleg estimates to be over 80%.
Portugal also offers an exceptional living experience with one of the best climates in Europe, a welcoming ocean, and delicious cuisine, making it not just a business hub but also a desirable place to live.
*Oleg highlights three critical factors for those considering a business venture in Portugal:
*
Local Expertise is Essential: Setting up a private limited company or any other legal entity and managing accounting single-handedly is practically impossible; it’s recommended to engage a trusted expert or consulting firm in Portugal.
Recruit Locally: Avoid the remote hiring route through platforms like LinkedIn, which usually leads to overpriced requests due to high demand for potential candidates. Opt for local recruitment for better results.
Explore Beyond Major Cities: Don’t limit your search to big cities like Lisbon and Porto. Smaller cities like Braga and Coimbra harbor a pool of talent and offer substantially lower office maintenance costs—around 20-35% cheaper.
Oleg’s journey into the Portuguese market began in 2021 when a colleague proposed opening an office in Portugal to be closer to the US market. After extensive market research, Portugal emerged as the most appealing option. By 2023, ProCoders had established a full-fledged office in Lisbon.
Starting a business in Portugal requires careful financial planning.
*There are also additional expenses such as:
*
- setting up a company bank account and managing accounting – 1,000 to 2,000 euros.
- office space – 5 to 40 euros per square meter (depending on the location and the class of the building).
When it comes to taxes, there are personal and social security taxes, as well as a corporate income tax. For a business in Portugal, Oleg was looking at Value Added Tax (VAT) and corporate tax.
For those considering a personal move, the Non-Habitual Resident (NHR) tax regime is a significant draw, offering 0% on dividends for 10 years, making Portugal an attractive option for both businesses and individuals.
Oleg also shares insights into the Portuguese business culture.
When it comes to legal considerations, Oleg emphasizes the importance of securing a residence permit. For most passports, the stay is limited to 90 days out of 180, which implies that if you have serious plans here, Oleg advice on securing a long-term visa should be on your checklist.
*Final Thoughts
*
Portugal is undeniably an entrepreneurial haven, and Oleg's insights offer a clear roadmap for starting and growing a business there. With the right knowledge and determination, anyone can seize the opportunity to flourish in Portugal.
For personalized advice and support, contact ProCoders today. Don’t forget to subscribe to our Blog for more expert insights and updates on the latest in tech and entrepreneurship