/
/
Business in Portugal: Why Invest in the Country

15 de April, 2024

Business in Portugal: Why Invest in the Country

Discovet why investing in Portugal is a strategic choice. Discover the investment opportunities in one of Europe's top destinations
homem com as palmas das mãos voltadas para cima, com opções de investimento
Reading: 7 min

If you are looking for an ideal destination to expand your business, doing business in Portugal can be a strategic and advantageous choice. The country remains an attractive business destination, offering a variety of opportunities and advantages for international entrepreneurs. It ranks in the top 10 most promising countries in Europe, according to the Ernst & Young Attractiveness Survey Portugal 2023. With a recovering economy and favorable incentives, the country offers several investment areas that have attracted global interest. In this article, we will explore the available visas for investors and why investing in Portugal is a smart and profitable choice.

Why Portugal?

In 2022, there was a scenario of political instability in Europe and a significant trend of rising inflation. Nevertheless, Portugal demonstrated remarkable resilience in macroeconomic and financial terms, crucial factors that boosted its performance in attracting Foreign Direct Investment (FDI). In fact, in 2022, the country achieved a record number of projects, according to Ernst & Young. With 248 registered projects, Portugal ranked as the 6th top investment destination in Europe, climbing two places in the ranking compared to the previous year, with a 24% growth compared to 2021 and 61% compared to 2020. It was the country that exhibited the highest growth among the top-10 European countries in attracting investment between 2021 and 2022!

Read also: Is Portugal the next Tech Tiger?

Do you want to live in Europe?

Realizing your goal of living in Europe or obtaining European citizenship can be simpler than you think. We offer personalized support to make the immigration process more accessible and uncomplicated.

Do I need to live in Portugal to conduct business?

To be an entrepreneur, you do not necessarily need a residence visa. In fact, business establishment and investment allocation processes always precede the visa application. However, it is required for the entrepreneur or investor to have a Portuguese Fiscal Identification Number (NIF).

How can I conduct business in Portugal?

Opening a business in Portugal can be done in various ways, taking advantage of the opportunities offered by the local market and government incentives. Investing in sectors such as real estate, renewable energy, technology, or agriculture offers attractive returns, driven by economic growth and the country’s favorable infrastructure. Additionally, entrepreneurs can explore partnerships with local startups, open franchises, and establish new businesses, leveraging the support network and tax benefits available.

For those looking to live in the country and start a business, the D2 Visa, known as the foreign entrepreneur visa, is also a great option.

For those seeking long-term dual citizenship without necessarily residing in Portugal, an interesting option is through the Golden Visa Portugal program, which allows investors to obtain residency permits in exchange for investments in various sectors of the Portuguese economy. Learn about the main visas for conducting business in Portugal:

Golden Visa Portugal

The Golden Visa Portugal Program serves as a route to European citizenship for individuals from outside the European Union who wish to invest and hold assets in Portugal for at least 5 years. The program was launched in 2012 and has undergone several changes over time. Its latest alteration occurred in October 2023, as part of the More Housing project.

The Golden Visa allows residence in Portugal with just 7 days of stay per year and offers a series of benefits, including freedom to travel to 191 countries without a visa and the possibility to apply for Portuguese citizenship after the investment period. Valid investment options include investment funds, job creation, scientific research, and artistic production, with amounts starting from €500k.

D2 Visa Portugal

The D2 Visa is for foreign entrepreneurs and self-employed professionals who wish to establish a business of economic relevance in Portugal. It provides access to a residence permit through the creation of small and medium-sized enterprises. Its main requirements include demonstrating the economic viability and relevance of the business, as well as presenting a solid business plan. Additionally, it is essential to prove financial means to sustain oneself in the country, and in the case of self-employed professionals, it is necessary to present a work contract or service proposal. The D2 Visa also allows family reunification, enabling family members to join the residence permit holder in Portugal.

Startup Visa

The StartUp Visa is an alternative route for foreigners who want to establish an innovative startup in Portugal. The program’s objective is to attract talent and innovative ideas to drive the growth and diversification of the Portuguese economy. In contrast to conventional methods, this visa requires approval from a Portuguese incubator, which will provide support and guidance for the development of your business project.

To begin the process, you need to start the procedure through IAPMEI (Agency for Competitiveness and Innovation). This involves registering on the IAPMEI website and submitting the necessary documents. On the online platform, you will have access to a simplified guide for the application.

Investing in Franchises in Portugal

The franchising sector in Portugal presents a promising landscape for investors interested in opening franchises in the country. With various highlighted sectors such as food distribution, catering, real estate mediation, financial intermediation, health, and well-being, among others, there are significant opportunities for entrepreneurs.

The strong presence of established brands, such as McDonald’s, Domino’s Pizza, Remax, and others with a large number of franchisees, demonstrates the stability and growth potential of this market.

Business in Portugal: growing

Countries that invest the most in Portugal

According to the EY Attractiveness Survey Portugal 2023, the six top investing countries in Portugal in 2022 were Germany, the United States, France, the United Kingdom, Spain, and Switzerland. Germany took the lead as the primary investor, with 36 projects, surpassing the United States. Additionally, other countries like the Netherlands and Denmark are emerging as significant players in Portugal’s investment landscape, reflecting a continuous diversification of investing countries.

Most attractive sectors for investment in Portugal:

1. Real Estate and Tourism:

The real estate and tourism sectors have been key drivers of the Portuguese economy, fueling significant growth in recent years. According to the Immigration, Borders, and Asylum Report (RIFA) of 2020, the foreign population residing in Portugal increased by 12.2% compared to the previous year, reflecting growing interest in living and investing in the country. Even during the pandemic, housing prices continued to rise, especially in major urban centers like Lisbon and Porto, indicating long-term stability and appreciation.

2.Renewable Energies:

Portugal is a leader in the renewable energy market, with ideal climatic conditions for the development of this sector. Increasing awareness of the need for clean energy sources has driven significant investments in solar, wind, and marine energy. Returns on investment in renewable energy are attractive and align with global sustainability trends.

3.Technology and Innovation:

Portugal’s startup ecosystem is on the rise, supported by a robust network of incubators and accelerators. The government has implemented policies and programs to attract international entrepreneurs, offering tax incentives and strategic support. Sectors like information technology and software development present opportunities for exponential growth.

4.Agriculture and Food:

Agriculture in Portugal has significant export potential, particularly for products like olive oil and wine. The country offers supports and subsidies for agricultural projects, making this sector attractive to investors interested in sustainable and high-quality businesses.

Most investments are concentrated in the Lisbon Metropolitan Area and Northern Portugal.

What are the risks of investing in Portugal?

According to the Global Risks Report 2024 by the World Economic Forum, some global risks may impact Portugal, such as failures in climate action, erosion of social cohesion (political polarity), and livelihoods at risk due to disruptive technological changes.

However, Portugal is taking steps to mitigate these risks and build a more resilient and sustainable future. The country invests in clean renewable energies and climate adaptation, promotes social cohesion and inclusion, and develops skills for the digital age.

Despite challenges, investing in Portugal can be an opportunity for companies seeking a stable and growth-friendly environment, especially considering the government’s efforts to build a more sustainable and resilient future.

Portugal’s strengths as an investment destination:

The IMD World Competitiveness Ranking 2023, which assesses countries’ ability to create and sustain an environment conducive to economic prosperity, highlighted the efficiency of the Portuguese government, whose assessment rose nine positions to reach 24th place. The country also advanced in infrastructure, ranking 32nd. This was mainly due to investments in digital infrastructure and transportation modernization.

1. Gateway to Global Markets::

Located at the southwestern tip of Europe, Portugal enjoys a privileged geographical position that serves as a gateway to diverse international markets. With easy access to mainland Europe, Africa, and South America, Portuguese companies can connect with customers worldwide, driving growth and competitiveness.

2. Innovative and Skilled Talent:

Portugal boasts a young, skilled, and multilingual workforce ready to meet the demands of a globalized market. Portuguese universities produce highly trained professionals in various fields, from engineering and technology to finance and marketing.

3. Cost-Effective Operations:

Compared to other Western European countries, Portugal offers a business environment with competitive operating costs. This means companies can benefit from factors like lower taxes, attractive energy costs, and labor costs without compromising product or service quality.

4. Government Incentives:

The Portuguese government recognizes the importance of foreign investment for national economic development and offers various incentives to attract international companies. These incentives may include tax exemptions, subsidies, and access to financing with reduced interest rates, creating a favorable environment for business growth.

  • Agile services for opening a company, such as “Empresa na Hora.”
  • Tax incentives, with tax exemption in the first year and contractual benefits for productive investment.
  • Corporate capitalization tax incentive regime (ICE).
  • Investment support tax regime and deduction for retained and reinvested profits.
  • Incentives in business research and development.
  • Advantages for installing companies in the interior of the country (regional incentives) according to specific demands of each region.
  • Reduced taxation on capital gains.

Investing in Portugal: Yes or No?

Portugal stands out as an attractive destination for companies seeking an environment conducive to sustainable growth, innovation, and success. For those looking to live in the country, it is also an investment in quality of life. With its strategic location, skilled workforce, competitive costs, attractive government incentives, and high quality of life, Portugal offers the essential ingredients to turn your business dream into reality.

If you’re ready to take your business to the next level, Atlantic Bridge invites you to explore your possibilities. Contact us to schedule a free consultation.

Facebook
LinkedIn
WhatsApp
Telegram
Silvia Resende

Author:

Silvia Resende

You may also like:

End of the Golden Visa: Rumor or Real Threat?

The Government has not yet submitted to Parliament a bill to end the Golden Visa. The program is still in force.

Author:

Atlantic Bridge

Reading: 4 min

17 de March, 2023

Main changes to the Golden Visa Programme in Portugal

Author:

Atlantic Bridge

Reading: 4 min

17 de February, 2021

How to ensure your fiscal regularity in Brazil and Portugal: check here

Author:

Atlantic Bridge

Reading: 8 min

13 de April, 2019

Why Are So Many Americans Moving to Portugal?

Author:

Atlantic Bridge

Reading: 3 min

14 de April, 2022

Will the Golden Visa Portugal end? Get to know the current scenario!

Will the Golden Visa Portugal program end? What will change in the program? Which modalities will be changed? Are there any guarantees to the investor? Find out more.

Author:

Atlantic Bridge

Reading: 8 min

20 de June, 2023

Americans Moving to Portugal and Spain

More and more Americans are moving to Portugal and Spain in search of affordable housing and the quiet, charming climate of Europe.

Author:

Atlantic Bridge

Reading: 6 min

28 de March, 2023