Doing Business in Portugal

Country profile

Portugal is a republic situated in the South-Western Europe, on the Iberian Peninsula, west of Spain, bordering the North Atlantic Ocean. Its surface is extended in 92,142 kilometers square, including the Azores and Madeira Islands. Portugal has a population of 10.5 million, the majority being Portuguese people and only 5% being ethnic minorities. Its capital city is set in Lisbon, with a population of almost 2 million inhabitants. Porto is the second biggest city in Portugal. The language spoken is Portuguese and the currency is euro. Portuguese is one of the most widely spoken European languages in the world and is mother tongue to about 200 million people. Portugal is a member of European Union (EU), North Atlantic Treaty Organisation (NATO), United Nations (UN), Organisation for Co-operation and Security in Europe (OSCE), Council of Europe, Community of Portuguese Speaking Countries (CPLP).

Statistics

The Portuguese Gross Domestic Product in 2010 was 172.5 billion EUR. The unemployment rate was estimated at 12.1% in the second quarter of the year 2011, according to the National Institute of Statistics in Portugal. Portugal plays an important role in the international trading, Spain being its most valuable partner for exports (22.7%) and imports (29.1%).

Main industries

Portugal’s main industries are textiles and footwear, wood pulp, paper, metalworking, oil refining, chemicals, fish canning, wine, tourism. Lisbon is the wealthiest city in Portugal, with an annual profit higher than the European average. Its port is one of the most well-known and intensely used on the European Atlantic Coast. Lisbon has an economy built on Portugal’s tourism and agricultural products, such as cork, wine, textiles, leather footwear, wood pulp, paper and olive oil.

Porto is a center of light industry, including textiles, footwear, furniture, wine and food processing, also housing the nation's largest petroleum refinery. 

Aveiro is specialized in wood products and Covilha is also an active textiles area.

Salaries

Portugal offers motivating monthly salaries that can reach an average of 1,600 EUR per month. Anyhow, an employee cannot be paid with less than 583 EUR, this amount being the minimum wage permitted by the Portuguese Law.

Main corporate taxes

A company registered in Portugal is subject to a standard corporate tax rate of 25% if the income is over 12,500 EUR and 12.5% for less. For an income that exceeds 2 million euros, the corporate tax rate is higher with 2.5%.

The standard Value Added Tax rate in Portugal is 23%, with some exceptions of 13% and 6% for some goods and services.

For a Portuguese company, the dividend tax rate for dividends paid to non-resident companies is 21.5%. There might also be the case of a tax treaty, under which the tax might be reduced. 

BridgeWest offers company formation in Portugal, including virtual office and other related services.