Portugal is emerging as an attractive destination for entrepreneurs and businesses seeking opportunities in Europe. In this article, we will explore seven compelling reasons to consider starting or relocating a business in Portugal in 2024.
1. Membership in the European Union
Portugal’s status as a member of the European Union (EU) since 1986 is a significant advantage for businesses. Being part of the EU means that Portuguese companies have access to a unified market of over 500 million consumers, allowing them to sell their products and services across the EU without encountering tariffs or trade barriers.
2. Automatic VAT Registration
Portugal simplifies the process of Value Added Tax (VAT) registration. Unlike many other European countries, VAT registration in Portugal is automatic, ensuring that companies receive a valid VAT number for intra-community transactions when they commence their activities. Portugal’s maximum VAT rate is 23%, while in the Autonomous Region of Madeira, it is 22%.
3. Favourable Tax Regime
Portugal offers an attractive tax environment characterised by stability and investment security. The participation exemption regime allows dividends paid by subsidiaries to be exempt from taxation, and capital gains from the sale of qualifying shareholdings in subsidiary companies are also tax-exempt. Companies based in Mainland Portugal are subject to a corporate income tax (IRC) rate of 21%, which can be reduced to as low as 5% for companies based in the International Business Centre of Madeira.
A reduced corporate income tax rate of 17% (11.9% in the Autonomous Region of Madeira) applies to the first EUR 50,000 of taxable income of small and medium-sized enterprises and small-medium capitalisation companies.
4. Innovative and Technological Business Environment
Portugal has become a hub for innovation and technology, with strong government support for entrepreneurs and startups. Various initiatives and programs, including tax incentives, funding opportunities, and business incubators, facilitate the growth of innovative companies. These businesses are driving advancements in areas like artificial intelligence, blockchain, and the Internet of Things, transforming industries and promoting economic growth. Portugal has also taken measures to reduce bureaucratic hurdles for startups and offers a range of funding opportunities, from grants to venture capital.
5. Multiple Residence Permits
Foreign entrepreneurs and investors looking to start a business in Portugal can take advantage of residence permit programs tailored to their needs. The Start-up Visa, for instance, is designed for international entrepreneurs and investors, provided they can demonstrate the innovativeness and potential economic contributions of their business ideas.
Other residence permits are available for remote workers or applicants obtaining mainly passive income (e.g. dividends, interest, rents). These programs make it easier for individuals to enjoy the benefits of entrepreneurship and innovation in Portugal.
6. Qualified Workforce
Portugal’s significant government investments in education and research have resulted in a highly skilled and qualified workforce. Portuguese universities and research centres regularly produce highly qualified and specialised engineers, scientists, managers, and other professionals. English proficiency is widespread, making communication with international partners more accessible for businesses.
7. Safety and Quality of Life
Portugal is known for its safety and quality of life. The country boasts low crime rates and a welcoming, inclusive, and tolerant population. Its menhanceild Mediterranean climate and world-renowned gastronomy, including delicious wines, contribute to an exceptional quality of life for expatriates. Excellent infrastructure, international access via multiple airports and strong telecommunications networks further enhances Portugal’s appeal for foreign investment.
Keep this in mind!
Portugal offers a compelling package for businesses and entrepreneurs seeking opportunities in 2024.
For those considering investing in Portugal, partnering with experienced local firms, such as NEWCO, can provide valuable assistance in navigating the local business landscape, including business setup, accounting, tax compliance, obtaining permits, and real estate matters. Portugal’s stability, security, and strong support for innovation position it as a promising destination for businesses in the year ahead.