The Benefits of Starting a Business in Portugal

1 Year LXTG


For the past few years, a growing concern with work-life balance among millennials and the Gen Z professionals had everyone searching for their place in the sun. The pandemic only perpetuated this desire of working in a quality environment, but, of course, there are so many other aspects to take into account when moving to a paradise location. Portugal has a unique set of characteristics and benefit programs that make it one of the best locations for your business’ setting… and it’s not just the sunny side!


Highest ranking on… well, a lot.

Sure, we could put Portugal as one the European countries with most hours of sun per year but let’s focus on other important aspects such as Happiness, Human Development and Safety. Our country ranks Very High in the Human Development Index (HDI), which is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and have a decent standard of living. We are also top 5 of the safest countries in the world, only surpassed by Iceland, New Zealand and Austria. And in a time when the principles of democracy have never been more important, Portugal claims its place among the world nations considered Fully Democratic. We are also the 3rd safest country in the world, according to the Global Peace Index 2019. Let’s not forget about the main reason for your transition to Portugal: business. Last year the country ranked 39 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.

Peaceful, developed, democratic and ease in doing business. There is not much more we can ask for.



Cost Effective

From qualified labour to central office locations, Portugal is one of the few places in Europe where you are sure to find the best value for money options for your business. Workforce is educated, skilled and significantly less expensive than most western European countries. Did you know the Portuguese rank number 12 in the EF English Proficiency Index of 2019, above any other Latin speaking country in Europe? That’s another rank to take into account! Communication will never be an issue in most Portuguese cities.

Although rent prices have increased in recent years due to demand, it is still more affordable to rent in Lisbon than London, which has the same time zone, according to Numbeo (the world’s largest cost of living database).



Foreign Benefit Programs

If you are still not convinced with everything mentioned above and in our previous post about Starting a Company in Portugal, let’s have a look at some of the benefit programs to kickstart your business in Portugal.

As a result of the 2008 financial crisis, tax incentives to investment have gained greater relevance in the country. Many incentives are mainly aimed at encouraging investment, namely foreign investment, favouring sustainable growth, job creation and company investment. To achieve this, Portugal has focused on the creation of tax benefits, strengthening of legal mechanisms to eliminate international double taxation, the establishment of certain periods for the reporting of tax losses, and attractive nominal rates.



In fact, some of these tax benefits can be found in the various tax codes in the form of exemptions; rate reductions (e.g.: reduced VAT rate), deductions from taxable income, deductions to the collection (e.g.: deduction in the IRS of education expenses) and accelerated depreciation and reintegrations.

We can highlight some investment incentive schemes targeting singular people:
  • Seed programme - aims to support capital investment in micro or small innovative enterprises (Startups);
  • Capital gains from the sale of shares in micro and small enterprises;
  • Tax regime for non-habitual residents (also applicable to the Golden Visa Portugal program);
  • Tax regime applicable to ex-residents.


  • On the other hand, the following investment incentive schemes contain tax benefits for companies:
  • Contractual benefits to productive investment;
  • Investment support tax scheme (RFAI);
  • Tax incentive system for research and business development (SIFIDE II);
  • Deduction for retained and reinvested profits (DLRR);
  • Installation of companies in inland territories.


  • Another advantage that made Portugal ideal, and is a call for those thinking of investing in Lisbon, was the creation of Golden Visa. This visa can be applied for by citizens of any non-European nationality who want to open a business in Portugal or invest in: financial market; small and medium enterprises; scientific research; artistic production. The Golden Visa can be renewed and offers the possibility of obtaining permanent residence in Portugal.

    There is no shortage of advantages to invest in Portugal or transition your business to this thriving country. But you might need help navigating the different options available to your particular case and, for that, you can always count on us.