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When it comes to global expansion, choosing the right partner is important in your international business strategy.
Portugal’s Employer of Record (EOR) services are a solution often overshadowed by flashier business trends but they are critically vital for global success. Many businesses, yours might be one of them, are eyeballing international expansion, and rightly so. However, a mistake in understanding and managing international HR can derail your entire venture.
But, why Portugal? Portugal is a growing tech hub with an economy moving forward in leaps and bounds.
So, why should you hire a Portugal EOR Simple: because they keep things running so smoothly behind the scenes, you’ll barely notice they’re there—until you realize how effortlessly you’re expanding your business. Each Portuguese EOR is tailored to different scales and scopes of businesses. This offers a versatility that’s hard to find elsewhere.
An EOR is your business’s representative on the ground who manages employment-related tasks and legalities. This is particularly useful if you don’t have a physical presence in Portugal. The EOR handles HR functions, and compliance with local employment laws to ensure that your business ticks all the legal boxes.
Often, there’s some confusion between an EOR and a Portugal Professional Employer Organization (PEO), but they’re not the same. While both provide HR services, the key difference is the legal responsibilities.
With a PEO, you remain the legal employer. This means you’re still involved in legal and HR responsibilities to an extent. A PEO shares responsibilities with your company. In contrast, the EOR becomes the legal employer. They take on the full legal responsibility for your employees, giving you more breathing room to focus on your business’s expansion and growth.
An EOR in Portugal handles all the legal and HR responsibilities that come with employing staff, but your team still works directly for you. You set the roles, and day-to-day tasks, while the EOR handles the legal stuff. This includes managing employment contracts, which in Portugal must adhere to strict standards set by the Portuguese Labour Code.
One notable aspect of the legislation is the adherence to Portugal’s labor laws. For instance, the EOR ensures compliance with the country’s mandatory 22 working days of annual leave, as stipulated by the Portuguese Labour Code. Also, there are legislations like the 13th and 14th-month salaries – a traditional Portuguese practice where employees are paid extra in June and December.
In Portugal, employment contracts are a serious business. The Portuguese Labour Code demands that contracts be clear and comprehensive. These contracts lay out responsibilities and termination conditions. When working with a Portugal EOR, they’ll ensure that your employment contracts are fully compliant with local law.
In Portugal, the law guarantees quite a generous holiday schedule – employees are entitled to 22 working days of paid leave per year. There are also provisions for parental leave, sick leave, and more, as laid out in the Portuguese Labour Code.
This might seem overwhelming to manage from afar, but this is where the benefits in Portugal of an Employer of Record shine. They handle all these and ensure that your business is compliant and your team is happy.
There’s social security, a pivotal part of the employment system. In Portugal, both employers and employees contribute to the social security system.
Horizons is an international Employer of Record with a strong presence in Portugal. In addition to, EOR services it supports companies with recruitment and visas (including tech visas) in Portugal.
BRIDGE IN are Portugal expansion experts, providing the full range of hiring and business growth options within Portugal, including EOR, company incorporation and payroll outsourcing. For a hiring partner with an in-depth knowledge of Portugal compliance and market conditions, BRIDGE IN is a top pick.
Deel is an international HR and EOR platform recently touted as “the world’s fasted growing Software-as-a-Service”. Their comprehensive platform makes them an ideal option for companies that seek to hire in multiple countries at once and with extensive HR and payroll requirements.
Portugal’s Golden Visa program is a strategic entry point into the European market for businesses that want to expand globally. This program, a part of Portuguese Immigration Law, specifically under Article 90-A of the Foreigners Act (Lei n.º 23/2007), offers a fast track to residency for non-EU investors.
It was introduced in 2012 and has since been a magnet for international investment. According to a report by the IMF, it has significantly contributed to Portugal’s economic revival post-2010 financial crisis.
This isn’t surprising, considering the program’s appeal: a simple residency pathway for you and your family, with a minimal physical presence requirement of just seven days in the first year and 14 days in subsequent two-year periods.
Investing in Portugal, be it through real estate, or creating job opportunities, opens the door to residency and connects you to a hub of innovation and growth in Europe. Portugal boasts a thriving start-up scene and a strategic location as a gateway to continental markets.
For businesses, tapping into the Golden Visa program means accessing the entire Schengen Area to enhance your business’s mobility and reach. The World Bank’s ease of doing business index frequently shows Portugal as a conducive environment for business operations.
However, it’s crucial to approach this option with a clear understanding of the investment requirements and legal processes involved. The initial investment can range from €250,000 to €500,000, depending on the type of investment you choose. Staying compliant with Portuguese laws helps to reap the program’s full benefits.
Portugal offers a strategic gateway to the European Union. Using a Portugal EOR means you’re placing your business at the doorstep of a vast and varied market.
This means your business gets direct access to the EU’s market of over 500 million consumers that have stable legal and economic systems.
Dealing with legal compliance in a new country can be stressful. Portugal’s EOR takes this burden off your shoulders. They’re well-versed in local laws, and they make sure your business stays on the right side of legalities.
For instance, they’ll handle compliance with Portugal’s Labor Code, which outlines specifics like minimum wage, and termination procedures.
Portugal has historic cities and also a fiscal advantage for businesses. The Non-Habitual Resident (NHR) Regime, for example, offers reduced tax rates and exemptions for a decade for anyone looking to optimize their tax situation as they expand into Europe. EOR services in Portugal can guide you through this fiscal system, making sure you reap the maximum benefits.
Portugal’s workforce is skilled and multilingual. This makes it a hotbed for recruiting top-notch employees. With a Portugal EOR, you can tap into this pool without the headache of employment laws or setting up complex payroll systems. They manage onboarding and payroll, and let you focus on growing your business.
Expanding into new territories comes with its share of legal and financial risks. Portugal’s EOR services minimize these risks by taking on the legal employer responsibilities. They deal with employment contracts and compliance with local employment laws.
Although hiring Portugal’s EOR services comes with many benefits, it’s only fair to discuss the challenges.
The ever-changing laws in a new country can be tricky. Staying abreast of the details requires a keen eye and a constant ear to the ground. Even with an EOR, your business must understand these regulations to ensure smooth operations.
Portuguese is the main language of communication in Portugal, although English is widely spoken. This language barrier can sometimes lead to miscommunications or misunderstandings in business dealings. A good EOR can bridge this gap, but it’s something to be aware of as you expand into this market.
While an EOR can save you the cost of setting up a legal entity in Portugal, it’s not free. The service fees, which vary depending on the provider and the extent of services needed, must be factored into your budgeting.
Relying on an EOR means putting your HR operations in their hands. This can lead to a sense of loss of control over certain aspects of your employee management. It’s crucial to partner with an EOR that’s efficient as well as transparent and communicative to keep you in the loop at all times.
You need to choose the right EOR partner. Also, you must ensure you have a clear understanding of the cost structure and what’s included in the EOR services. Finally, try to establish strong communication channels with your EOR provider to maintain a sense of control and involvement in your HR operations.
Yes, a Portugal EOR can help companies hire both local and foreign employees. Whether you need to hire Portuguese citizens or individuals from other countries, an EOR can handle the necessary employment processes and compliance requirements. This includes managing work permits, visas, and other documentation needed for foreign employees. The EOR ensures that all hiring processes and legal obligations are met, regardless of the employee's nationality.
Yes, engaging a Portugal EOR for short-term projects or temporary staffing needs is a viable option. EORs are flexible in their arrangements and can support companies with different durations of employment. Whether you need temporary staff for a specific project or seasonal workers, an EOR can assist in managing the employment and administrative aspects. They handle payroll, compliance, and other HR tasks, allowing companies to efficiently manage short-term staffing needs without the long-term commitments or administrative complexities associated with traditional employment models.
Please note that specific details and terms may vary among different EOR providers, so it's important to discuss your specific requirements with the chosen EOR to ensure they can accommodate your needs effectively.
