Hiring in Portugal: What International Businesses Need to Know

Portugal has become a booming center for innovation and technology, which attracts foreign companies seeking to access a rising pool of skilled workers. Portugal offers significant opportunities for companies looking to expand in Europe due to its strong startup ecosystem, favourable business environment and highly skilled workforce. However, navigating the country's recruitment procedures and labour regulations can be a challenge. 

Here are some tips for foreign companies and information on how an Employer of Record (EoR) can simplify the recruitment process easier for businesses so they can focus on their core operations.

The Rising Tech and Startup Ecosystem of Portugal

Cities such as Lisbon and Porto are leading the transformation as the country is becoming a hotbed for digital talent and innovation.Supported by government efforts, incubators, and venture capital financing, the nation has a thriving startup scene. The key reasons behind this transformation are

Educated WorkForce

Portugal has a highly educated workforce pool with great engineering, software development, and data science experience. Since many experts speak many languages, they are perfect for multinational teams.

Affordable Talent

Portugal provides competitive pay rates, which helps to explain why employing top talent there is less expensive than in other Western European nations.

Government Initiatives

Initiatives like Startup Portugal and several tech hotspots (such as Lisbon's Web Summit) have helped Portugal to establish itself as a leader in creativity. Companies including Farfetch, OutSystems, and Feedzai have mapped Portugal on the worldwide IT scene.

Difficulties Foriegn Companies Face in Portugal

Understanding portuguese labour laws, tax regulations and payroll systems can be a difficult and confusing process for international companies. The complexity of the regulations and the need to adhere to local customs often present a major challenge.

Setting up a legal company in Portugal can also be a time-consuming and expensive process, requiring significant resources and knowledge for companies that want to hire employees quickly. This is where an Employer of Record (EoR) can be very helpful. Companies can simplify their entry into the Portuguese market by working with an EoR, guaranteeing compliance with local legislation and avoiding the time-consuming process of setting up a legal entity.

How an EoR Simplify & Accelerates Hiring ?

An EoR is a third-party company that acts as your legal employer and takes care of compliance, payroll and administrative tasks. Here's how an EoR helps companies in Portugal hire talent quickly and legally

Speed to Market:

An EoR allows companies to hire employees in Portugal without setting up a local company, significantly reducing hiring times.  This removes a major barrier to entry and speeds up the hiring timeline.

Payroll Management

Properly managing payroll, taxes and benefits in Portugal can be difficult and time-consuming. An EOR takes responsibility for all areas of payroll, tax returns and benefits administration. This ensures that employees are paid properly and on time and that Portuguese laws are complied with.

Flexibility

An EoR gives companies the ability to adjust the size of their workforce to changing demand, giving them more flexibility. This is particularly helpful for companies that are experimenting with new markets or want to cope with seasonal fluctuations in the number of staff required

Speeds Up the Onboarding Process

By Partnering with an EOR, firms are able to onboard newly hired employees in a timely and effective manner. To ensure that employees can start work without delay, the EoR is responsible for managing contracts, paperwork and compliance. Companies trying to grow their business quickly or fill key positions will benefit enormously.

The Bottom Line

Portugal is a great place for foreign companies looking to grow due to its active tech scene and well-educated labour force. However, it can be difficult to understand and follow the local labour regulations. Working with an Employer of Record (EoR) like Swapp Agency simplifies the recruitment process and guarantees compliance, allowing companies to focus on their expansion. Utilising the Portuguese talent pool has never been easier, regardless of the type of company you are — start-up or established.