7 Reasons Why You Should Expand Your Business to Portugal

Expanding a business to a new country is a strategic decision that requires careful consideration.

Portugal has emerged as one of Europe's most attractive destinations for business expansion. Moreover, businesses and entrepreneurs who invest in Portugal can benefit from residency opportunities that open doors to the broader European Union (EU) market.

So, let's explore the key reasons why expanding to Portugal is a smart move.

1. Portugal's Business-Friendly Environment

Portugal is widely recognized as a pro-business country with policies designed to attract international companies and entrepreneurs. According to the World Bank's Ease of Doing Business rankings, Portugal consistently ranks among the best places to start and operate a business.

Here are some of the reasons why:

• Stable Economy: 

  Portugal has shown resilience and steady growth, particularly in technology, tourism, renewable energy, and real estate sectors.
  

• Skilled Workforce: 

  The country offers a highly educated and multilingual workforce, making it an ideal destination for businesses that require international talent.
  

• Competitive Operational Costs: 

  Portugal offers lower labor costs, affordable office space, and a reasonable cost of living compared to other Western European countries.
  

• Government Support for Businesses: 

  Portugal provides financial incentives, tax benefits, and business funding programs, particularly in the innovation and research sectors.
  

• Strong Legal Framework: 

  Portugal has a transparent legal system that protects investors and provides a stable regulatory environment for businesses.
  

2. Strategic Location of Portugal in Europe

Portugal serves as a gateway to the European, African, and American markets. With its well-developed infrastructure, businesses operating in Portugal can easily reach customers across Europe and beyond.

• Access to the EU Market: 

  As a member of the European Union, Portugal provides seamless trade opportunities with all EU nations.
  

• Strong Transport & Logistics Network: 

  Portugal has major international airports, deepwater ports, and well-connected highways, facilitating smooth business operations.
  

• Time Zone Advantage: 

  Portugal shares a time zone with the UK and is just an hour behind Central European Time, making it convenient for global business operations.
  

• Growing Digital Connectivity: 

  Portugal is investing heavily in digital infrastructure, ensuring high-speed internet access and tech-friendly business environments.
  

3. Attractive Investment Incentives

The Portuguese government actively encourages foreign direct investment (FDI) through various incentives. Some of the key programs include:

• Portuguese Golden Visa Program: 

  One of the most attractive residency-by-investment programs in Europe, allowing investors and their families to live, work, and travel freely within the Schengen Area.
  

• Tax Benefits for Investors: 

  Portugal offers competitive corporate tax rates, tax exemptions for certain business activities, and incentives for startups and innovation.
  

• R&D Grants and Subsidies: 

  Companies investing in research and development can benefit from financial support and tax credits.
  

• Startup Portugal Initiative: 

  Portugal has launched multiple programs to support entrepreneurship, offering mentorship, funding, and networking opportunities for new businesses.
  

4. Gain EU Residency Through Investment

One of the most compelling reasons to expand your business to Portugal is the opportunity to obtain EU residency. Portugal's Golden Visa program allows non-EU investors to gain residency by making a qualifying investment, such as:

• Creating 10 jobs for Portuguese citizens

• Investing in venture capital funds (€500,000 minimum)

• Supporting scientific research (€500,000)

• Contributing to initiatives that preserve Portugal's cultural and historical heritage (€250,000)
  

Benefits of EU Residency:

• Freedom to live, work, and study in Portugal

• Visa-free travel across the Schengen Zone

• Eligibility for permanent residency or citizenship after five years

• Access to high-quality healthcare and education systems

• Ability to expand business operations across Europe without additional visa requirements
  

Portugal's Golden Visa program has already attracted thousands of investors worldwide, helping them secure both financial growth and personal freedom within the EU. Access our webpage "Portugal Golden Visa" for an overview of the Golden Visa Program.

5. The New IFICI+ Tax Regime (Replacing the NHR Program)

For years, Portugal's NHR Program (Non-Habitual Resident) was one of the main reasons professionals, entrepreneurs, and retirees moved to the country. It offered:

• A flat 20% tax rate for qualified professionals

• Tax exemptions on foreign income, such as pensions and dividends

• A 10-year period of reduced taxation
  

However, in 2024, the Portuguese government ended the NHR Program. It replaced it with a new system: IFICI+ (Incentivo Fiscal à Inovação e Competitividade Internacional), or Tax Incentive for Innovation and International Competitiveness in English.

How the IFICI+ Regime Works in 2025

IFICI+ is more restrictive than NHR, prioritizing professionals in strategic sectors. Key features include:

• A 20% tax rate for science, technology, innovation, and research professionals.
  

• No more tax exemptions on foreign income – retirees and passive investors no longer receive special treatment.
  

• The 10-year duration remains, offering long-term tax benefits for eligible individuals.
  

• A focus on attracting highly skilled professionals who contribute to Portugal's economy.
  

Who Can Benefit from IFICI+?

IFICI+ is only available to:

• Highly qualified professionals in engineering, technology, science, and healthcare.
  

• Entrepreneurs and startup founders contributing to innovation.
  

• University professors and researchers working in recognized institutions.
  

• Employees of companies benefiting from investment incentives or those with significant exports.
  

This means that if you're an entrepreneur, scientist, or tech professional, you may still benefit from Portugal's favorable tax system. Please read our blog post "The NHR Program in Portugal: Understanding the New IFICI+ Regime in 2025" to learn more about the program.

6. Thriving Portuguese Key Industries

Several industries in Portugal are booming, making it an excellent destination for business expansion:

• Technology & Innovation: 

  Lisbon has become a hub for startups and tech entrepreneurs, attracting global investment in AI, fintech, and digital solutions.

• Renewable Energy: 

  Portugal is a leader in green energy, with significant opportunities in solar, wind, and hydrogen projects.
  

• Tourism & Hospitality: 

  The country is one of the most visited in Europe, presenting opportunities for hospitality, real estate, and service-based businesses.
  

• Real Estate & Construction: 

  With a strong demand for residential and commercial properties, real estate investment continues to be a lucrative option.
  

• Agribusiness & Food Exports: 

  Portugal's agricultural sector, particularly wine, olive oil, and seafood, is thriving and gaining international recognition.
  

7. High Quality of Life for Business Owners and Employees

Portugal offers a high standard of living, making it an attractive destination for business owners, employees, and expatriates.

• Pleasant Climate: 

  Portugal enjoys over 300 days of sunshine per year.
  

• Affordable Cost of Living: 

  Portugal offers a relatively low cost of living compared to other European countries.
  

• Rich Culture & Lifestyle: 

  Portugal provides a unique blend of culture, safety, and vibrant social life, from historical landmarks to modern city life.
  

• Excellent Healthcare System: 

  Portugal has a world-class healthcare system, both public and private, ensuring high-quality medical services for residents.
  

• International Schools & Education: 

  Expats with families will find excellent international schools and top universities in Portugal.
  

So, Why Should You Expand Your Business to Portugal?

Expanding your business to Portugal is a strategic move that offers numerous benefits, including access to the EU market, a supportive business environment, and opportunities for residency through investment. Despite changes in tax policies, Portugal remains an excellent choice for skilled professionals, entrepreneurs, and investors.

If you're considering business expansion, now is the perfect time to explore the opportunities Portugal has to offer. Portugal provides the ideal environment for growth and success, whether you're an entrepreneur, investor, or corporate leader.

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