Bordered by Spain and the Atlantic Ocean, Portugal is quickly becoming one of Europe’s most important hubs for startups and tech. With an economy that keeps growing, Portugal is a popular destination for digital nomads and major tech companies, including Microsoft, Amazon, and Google.
If you're looking to hire full-time employees or contractors without stepping foot in Portugal, you might consider partnering with an EOR service to streamline onboarding, payroll, and other HR processes.
Learn about the hiring, employment, payroll, and benefit requirements for workers in Portugal, as well as how an employer-of-record (EOR) service and on-the-ground experts can help you manage your international employment needs.
An employer of record (EOR), sometimes known as an international PEO, enables you to quickly hire and onboard workers in Portugal without having to risk the money and time of setting up an entity.
Manage international payments, payroll, employment contracts, and statutory benefits
Navigate payroll deductions, taxes, and other hyper-specific HR processes
Support full-time workers from onboarding to offboarding and everything in between
Provide immigration assistance, including work visa sponsorships
Save up to $200,000+ USD and thousands of hours
253.7 billion USD
822.5 (EUR) per month
Working hours are normally 9am-6pm
Number of public work holidays
Misclassification penalties range from €2,040 to €9,690
Time to hire with an EOR in Portugal
An EOR can help you understand the cultural differences in the workforce and ensure that you’re adhering to employee expectations, both during the hiring process and ongoing employment.
For example, you’ll need to know that all contracts in Portugal need to be written in Portuguese and that the social security system strongly favors employees and employee rights.
Team members strongly care about their company and their devotion to their company’s success. Focus on building long-term relationships with both clients and coworkers.
Portugal has two different time zones: Continental Portugal and Madeira use UTC+00:00, while people in the Azores use UTC–01:00.
Lisbon is 5 hours ahead of Eastern Standard Time. So if it’s 10:30am in New York City, it’s 3:30pm in Lisbon, Portugal.
The typical work week in Portugal is Monday-Friday 9am-6:00pm, with an hour break for lunch.
To hire a new employee in Portugal, employers will have standard typical overhead costs, which include:
Contributions to the social security system
Labor Accident Insurance
Wage Guarantee Funds
Vacation and sick days
Onboarding and training
Per federal regulations, Portuguese employees receive a mandatory of 13 public holidays off, with Carnival being an optional day off that many employers/employees celebrate in February.
New Year’s Day(1/1/2023)
Good Friday (4/7/2023)
Freedom Day (4/25/2023)
Labour Day (5/1/2023
Corpus Christi (8/6/2023)
Portugal Day (10/6/2023)
Assumption Day (8/15/2023)
Republic Day (10/5/2023)
All Saints Day (11/1/2023)
Restoration of Independence (12/1/2023)
Immaculate Conception Day (12/8/2023)
Christmas Day (12/25/2023)
Portugal is one of the few countries in Europe that has steady internet connection nationwide.
Remote work is on the rise in Portugal, but hasn’t become part of work culture like it has in places like the Netherlands and Spain. Right now, around 19% of workers in Portugal at least work partially remote.
Portugal has a diverse economy, and the industries that thrive in the country come from natural resources.
Industries that thrive in Portugal include:
Portugal has a lot of legislation that limits the amount of contractors hired in the country to prevent employers from misclassifying those who should be considered full-time employees.
Some general distinctions between employees and contractors in Portugal include:
Employees are on payroll while contractors are paid per project
Contractors file and deduct their own taxes
Employees are entitled to benefits while contractors are not
Contractors are not entitled to notice or severance
Contractors set their own hours and completion of projects while employees have a set schedule
If you partner with an EOR like Via, you can hire full-time employees without worrying about misclassification. Many companies find an EOR after they have too many contractors in a new country, which makes it difficult to scale.
Portuguese Labour Code
Federal law that covers the fundamental rights of workers including wages, working hours, health and safety, vacation allowance, and even work/life balance
Start recruiting top Portuguese talent using your in-house recruiter or by partnering with a recruiting agency based in Portugal (Via can introduce you to one of our local recruiting partners)
Choose the EOR partner that fits your hiring needs
Complete work visa application if the employee is not a Portuguese citizen
Begin onboarding full-time employees with local benefits
Manage new worker onboarding, as well as ongoing payroll, benefits, compliance, and other local HR processes for your growing hub
Scale your hub to 20-100+ workers without an entity
Offboard workers with compliant severance packages
In Portugal, there is a strict procedure for laying off or terminating an employee’s employment contract. Employers will need to provide a breakdown of what disciplinary actions they already tried that lead to a need for termination. Portuguese employees are entitled to 12 days of their base salary for every year of service to a company.
An EOR is responsible for compliant offboarding, creating the right severance package, and notifying employees of termination or layoffs.
When you decide you want to expand your business and hire employees in Portugal, you have a few options: work with a PEO (if you have a subsidiary or entity), open your own subsidiary/entity, or partner with an EOR. Each option will have its own set of pros and cons depending on your business needs. We’ll go into detail below.
The first option is to partner with a third-party PEO service provider in Portugal.
Pros of a PEO
Cons of a PEO
Simple payroll and HR outsourcing
Need to set up an entity in Portugal (which is time consuming and costly)
Usually located in Portugal
Must enter into a co-employment agreement, which makes you partially liable if any compliance problems arise
Useful knowledge about compliance and culture in Portugal
May not be specifically tailored to your specific needs in Portugal
If you have the resources to open an entity and know you’ll be staying in Portugal long-term, you can open your own subsidiary in the country. This can be a good option if you plan to sell goods or services in the country.
Pros of opening a subsidiary
Cons of opening a subsidiary
Direct management of your entity in Portugal
Registering a subsidiary in Portugal starts at around $220 EUR, but you need to have at least $50,000 EUR of required capital to start
Can hire a local HR team to help manage payroll and employee benefits in Portugal
Entity setup normally takes at least 4 weeks for initial incorporation, but usually takes longer because of bureaucratic hurdles
Assimilate your business practices to Portuguese culture
Forced to deal with local bureaucratic agencies and will need your own in-country legal team
The last option is to partner with an EOR service provider like Via.
Pros of an EOR
Cons of an EOR
Save your business thousands of dollars in entity incorporation.
May not be the best option if you need to hire 500+ workers in Canada (you should open your own entity)
Avoid having to navigate the visa system
May have less control over how HR is managed
Help with benefit and payroll management, support during the onboarding and offboarding process
Learn more about EOR services.
Many companies want to hire within Portugal but do not have the in-depth knowledge of beginning the process compliantly. Via makes hiring Portuguese talent and building your global team seamless. Via helps you manage local HR processes for direct employment such as work visas & permits, benefits, payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity in Portugal, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.
With Via’s transparent pricing, you can pay full-time employees or contractors in Portugal with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.