A document I've done with some Great things of doing business in Portugal and Not so Great things... I'm not an expert on this topic and it's the first time I do a document like this so feedback is more than welcome! :-)

1. Doing Business in Portugal
Tiago Alves
11 Aug 2017

2. Great things about Portugal!
1. Very hot destination right now (+13% foreign tourism in 2016 - a
sixth straight record year) even for local travellers (+5% in 2016)
2. Recovering economy (+1.4% in 2016), lower unemployment rate
(8.8% - lowest since 2009), higher consumer confidence (highest
since 2000)
3. Great infrastructures (e.g. highways, internet connections), high-
qualified cost-competitive work force (e.g. English proficiency)
4. Ease of doing business (e.g. new company in 1 day), stable law &
business environment (EU member since 1986)
2
Sources: http://www.reuters.com/article/portugal-tourism-idUSL8N1G059N; http://www.ttrweekly.com/site/2017/02/portugal-books-tourism-record/

3. 1. Hot destination
❖ Main drivers are (i) lowest prices in western Europe, (ii) one of the world's safest destinations,
(iii) great weather, (iv) top of ranking for conducting events and conferences
3
Source: http://www.travelandleisure.com/destination-of-the-year/portugal
Number of Visitors to Portugal (Millions)

4. 1. Hot destination
4
Sources: http://www.travelandleisure.com/destination-of-the-year/portugal; http://www.huffingtonpost.com/malte-zeeck/top-10-countries-with-the_b_11328900.html
“Top Countries w/ best Weather/Climate” by Huffington Post
“Destination of the year” by Travel & Leisure

5. 2. Recovering economy
❖ Bank of Portugal predicts that the economy will continue to recover in the next years (+1.8% in
2017, +1.7% in 2018, +1.6% in 2019) reaching levels of 10 years. Main driver are Exports.
5
Source: https://www.bportugal.pt/sites/default/files/anexos/pdf-boletim/projecoes_mar17_pt.pdf
GDP projection and main drivers (Indexed. 2008 = 100)
Exports
Enterprise
Capital
Formation
GDP
Private
Consumption

6. 2. Lower unemployment
❖ Portugal has been witnessing a drop in unemployment rate reaching 8.8% last month (vs. 16.2%
in 2013). Despite this drop, Portugal still has the 7th highest unemployment rate in Europe:
6
Sources: http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Unemployment_rates,_seasonally_adjusted,_June_2017_(%25)_F2.png;
http://www.jornaleconomico.sapo.pt/noticias/alojamento-e-restauracao-lideram-criacao-de-emprego-196696
Unemployment rate in Europe (%)

7. 3. Great infrastructures
❖ Portugal is currently the 15th country in the world in terms of infrastructures
7
Source: http://www.portugalglobal.pt/EN/InvestInPortugal/WhyPortugal/Pages/better-infrastructures.aspx
seaports
int. airports
10
7
km motorway
3k
tons cargo/yr10m

8. 3. Competitive work force
Good education
❖ #23 out of 70 in PISA (w/ positive trend)
❖ #15 out of 72 in English proficiency (61% speak at
least 1 foreign language)
8
Sources: http://www.bbc.com/news/education-38212070; http://www.portugalglobal.pt/EN/InvestInPortugal/WhyPortugal/Pages/better-skills.aspx;
https://www.reddit.com/r/dataisbeautiful/comments/27b3zn/how_much_is_your_time_worth_comparison_of_average/
Pisa Education Ranking (2016)
Annual Wage (OECD, ‘000)
Cheap wages
❖ #26 in OECD in terms of mean wages

9. 4. Ease & Stable business environment
❖ Member of EU since 1986 and of the euro zone (€),
follows directives from the European
Commission.
❖ Portugal has a politically stable environment
with a democratically elected parliamentary
government and is welcoming of foreign
business and investment.
❖ The structural reforms implemented since 2011
have created an economic and regulatory climate
that is very favourable to foreign investment.
9
Source: http://2016.export.gov/portugal/doingbusinessinportugal/index.asp ; https://www.weforum.org/reports/the-global-competitiveness-
report-2016-2017-1
Less restrictive countries on FDI (2016-2017)

10. Not so great about Portugal…
1. High corporate taxes (7th highest in OECD in 2015 at
29%)
2. Inflexible work contracts (much easier to fire someone in
the USA or UK) since the rights that an employee employs
are fairly extensive
3. Low productivity (e.g. Portugal with 1,691 working hours
per year vs. Greece’s 2,034)
4. Slow judicial system (2nd slowest in Europe) with lots os
pending cases when compared to Italy or Spain
10

11. 1. High corporate tax
❖ Portugal has the 7th highest corporate tax among OECD countries (29% in 2015 - see graph below)
❖ Dividends paid to non-resident shareholders are normally subject to a withholding tax at 20% (or
at the treaty rate, if applicable - Singapore double tax treaty has 10% tax for dividends)
11Source: https://utopiayouarestandinginit.com/2016/03/17/combined-federal-state-and-local-company-tax-rates-across-the-oecd-2015/
Combined corporate income tax rate in OECD (2015)

12. 2. Inflexible work contracts
❖ Although dropping from 4.1 in 2010 to 3.2 in 2013, Portugal’s Strictness of Employment Protection,
Individual and Collective Dismissals continues to be higher than OECD’s average of 2.0 and much
higher than UK’s 1.0 or US’s 0.3
12Source: https://utopiayouarestandinginit.com/2015/07/28/strictness-of-employment-protections-for-individual-dismissals-usa-uk-france-germany-and-the-pigs/
Employment Protection Index (OECD. 2013)

13. 3. Low productivity
❖ The 1,691 hours Portuguese work every year are below OECD’s average of 1,765 hours:
13
Source: https://www.reddit.com/r/dataisbeautiful/comments/27b3zn/how_much_is_your_time_worth_comparison_of_average/
Mean hours worked (per year)
Personal side notes:
❖ Inefficient work schedule (e.g. start late,
long lunch hours, leaving late)
❖ Lots of distractions (e.g. chit chat, no
meeting agenda)
❖ Formality hurts (e.g. suits, Dr / Prof,
waiting for superior to arrive to sit
down)

14. 4. Slow judicial system
❖ 2nd slowest judicial system in Europe (see graph below)
❖ Lots of pending cases, i.e. 11,000 / 100,000 people in 2015 (vs. 7,500 in Italy or 2,000 in Spain)
14
Source: http://ec.europa.eu/justice/effective-justice/files/justice_scoreboard_2016_en.pdf http://www.reuters.com/article/us-portugal-judiciary-insight-idUSKBN13H0GI
Time needed to resolve cases (days)

15. Useful documentation
15
Doing Business in Portugal
- by Moore Stephens
covering main company
structures, accounting &
audit rules, tax incentives,
etc
Doing Business in Portugal
- by CCA Ontier with an
overview of tax system &
incentives, investment
checklist, golden visa, etc
(includes Chinese version)
Doing Business in Portugal
- by PKF with an overview
of the Portuguese business
environment
Invest in Portugal - by the
Portuguese Trade Agency
highlighting the
competitive advantages of
doing business in Portugal

16. Thank you!
16