The beautiful old world charm of Portugal, together with its reasonable living conditions make for a good atmosphere for settling your roots in this country. But if one of the goals of your stay in the country is to put up a business, then you are in for an uphill climb as there are many issues involved in this endeavour.
One of the main issues involved in putting together a business in Portugal is the bureaucracy and red tape involved with the business. This is a problem for individuals who speak little or no Portuguese. The problem is exacerbated by the voluminous official documents that you need to submit, aside from understanding their purposes. There have been many horror stories of expatriates and foreigners alike putting their hands up in frustration for the seeming obstructionism that Portugal’s bureaucracy practices when it comes to putting up business.
The country is traditionally run by small companies and sole proprietorships. There are hundreds of thousands of family run businesses that employ many of the populace of the country. The best source for information on small businesses in your area would be the local camara de comercio or the local chamber of commerce and the town hall records. Many of these businesses work with meagre budgets and each day is a struggle to make a profit. A few can be considered as thriving businesses, and most often the local pub or eatery would be the most revenue generating business, but not necessarily the most profitable one. Despite this, many Portuguese still opt to operate their own business, mainly due to the fact that they are their own bosses.
Since much of the business climate is entrepreneurial in nature, you would need to stock up on patience and tolerance when dealing in business and with government. Also if you plan on putting up a business, it is important to keep your plans small and within reasonable levels, all the while working within your budget. Drafting a large grandiose scheme would not be feasible as you would need several years to recoup your investments and being able to meet expenses may sometimes be governed by luck. You would need to have a sizable budget for the long term because the returns are still to be realized much into the future.
Another aspect of business that you need to look into if you want to put up a business in Portugal is in the hiring of employees. The normal procedure is that you as the employer would need to enter into a contract under Portuguese labour law, which is heavily biased for the employee. All in all, it is very expensive to higher an employee in the country, as you would need to pay social security contributions, fourteen month salaries for the year, five weeks of paid annual holiday and fourteen paid public holidays on top of the salaries which rank among the highest in the European Union.
Being properly advised as to the legal implications of a business transaction or the establishment of a going concern is one way for you to be able to smoothen the ride so to speak. There are heavy sanctions and fines imposed on individuals who fail to comply with basic legal tenets and violate statutes as to business operations. Also, having legal expertise on your side can help you utilize any favourable tax and business incentives available to individuals seeking to establish a business in the country. The legal expert can also assist you in the intricate process of establishing a business in the country. Without this invaluable advisor on your side, you may end up with shoddy contracts and your investments may soon be lost. Also, this provides you the back up should a dispute arise from your business engagements.
The best way to be fully prepared in undertaking business in Portugal would be engaging the services of a lawyer or advogado and an accountant or contabilsta. Many also often engage the services of a despachante or middleman to handle governmental transactions. The despachante would be your point man in navigating the myriad of governmental requirements in officially transacting business with the camara.
Another fairly common occurrence in Portugal is the assortment of crooks and swindlers in the business world. A healthy amount of suspicion is healthy especially when dealing with the locals and it is best to engage individuals that have been recommended to you by close friends in the country and you would do it yourself.
One other pitfall that needs to be avoided is entering into partnerships, as you should not put your trust with someone without reviewing the individual’s background and checking out their credentials. You must not sign anything or pay for anything unless your lawyer has reviewed the documentation and has provided you the approval for its contents. The sad part about doing business in Portugal, the foreign population is also one of the primary swindlers in the country so beware of these hooligans that speak your same language.
So unless you are fully prepared for the undertaking, which includes complete and exhaustive research, expert business and legal advice and trustworthy employees, you would have better chances in hitting the country’s lotto top money prize instead of succeeding in a business endeavour in the country. Many foreigners, enraptured with the allure of Portugal, often go into business without fully realizing the immensity of the problem at hand. The end result would normally be squandered fortunes or failed expectations or even much worse, a victim of larcenous schemes. If you are also unprepared for longer work hours with a bureaucracy that tightens up on fiscal opportunities, then you are surely shooting yourself in the foot because of the problems you would be encountering as days pass operating your small business venture.
Do not be disheartened though because there are some who actually succeed in doing business in Portugal. The formula for them would be a wide expanse of market research, shrewd investment strategy, above par client and governmental relations, and above all a lot of hard work and patience, you can surely make progress in setting up your own business right in the heart of Portugal.