ABOUT PORTUGAL

Amongst all the countries in Europe, Portugal, officially the Portuguese Republic, is a captivating country located in Southwestern Europe, on the Iberian Peninsula, with an extensive coastline along the Atlantic Ocean. It is globally recognized for its rich maritime history, stunning beaches, vibrant culture, delicious cuisine, and a rapidly growing economy, particularly in tourism and technology. Portugal also includes the Atlantic archipelagos of the Azores and Madeira. The capital of Portugal is Lisbon, which is its largest and most populated city, serving as the country’s primary economic, cultural, and political hub, and a prominent global city attracting international talent and businesses. According to the report of the World Bank, Portugal has been classified as a High-Income Nation, characterized by a diversified and increasingly innovation-driven market economy. The currency of Portugal is the Euro (EUR), which it adopted in 1999 (cash in 2002). As of today’s exchange rates (June 2025), 1 Euro is approximately 89.85 Indian Rupees. The population of Portugal is estimated to be around 10.2 million in 2024. Its sole land neighbour is Spain to the east and north, with the Atlantic Ocean bordering its west and south. The official language of the country is Portuguese. English is increasingly spoken and understood, especially in major cities (Lisbon, Porto), business centers, tourist areas, and among younger generations, facilitating international communication. The majority of the population identifies as Roman Catholic. Currently, Portugal has several international airports, with Lisbon Airport (LIS) being the primary international gateway. Other significant international airports include Porto (OPO) and Faro (FAO), offering extensive air connectivity. As a coastal nation with a strong maritime heritage, Portugal boasts crucial commercial seaports, including Sines (a major deep-water port and logistics hub), Leixões (serving Porto), and Lisbon, which are vital for international trade and maritime transport to Europe, Africa, and the Americas.

The standard corporate income tax rate in Portugal is 21% (for mainland Portugal). However, a reduced rate of 17% (or 12.5% for startups/SMEs) applies to the first €50,000 of taxable profit. Additionally, autonomous regions like Madeira and the Azores have lower corporate tax rates (e.g., 14.7% in Madeira). Portugal offers a highly attractive system of tax incentives to encourage foreign direct investment, particularly in R&D, technology, and job creation. Key incentives include the R&D Tax Incentive System (SIFIDE), which provides tax credits for R&D expenses. Other benefits include investment tax credits, regional incentives, specific tax benefits for startups (e.g., Startup Visa), and a favorable tax regime for non-habitual residents (NHR), although the Golden Visa program (especially real estate component) has seen significant changes. As a full member of the European Union and the Eurozone, Portugal benefits from full access to the EU’s single market, ensuring free movement of goods, services, capital, and people, and operates within a stable legal framework harmonized with EU directives. Opesh Group of companies will be helping you in the completing Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Portugal is generally straightforward, supported by government initiatives aimed at simplifying administrative procedures and attracting foreign investment. AICEP (Portugal Global) is the primary governmental agency dedicated to promoting investment and export. A foreign investor who is planning to start his business in Portugal can form various company types, with the most common and flexible structures being a Private Limited Company (Sociedade por Quotas or Lda.) or a Public Limited Company (Sociedade Anónima or S.A.). The Lda. is the most popular choice for foreign investors due to its simplicity, limited liability, and allowing 100% foreign ownership with a minimum share capital of just €1 (though a higher amount is often recommended for credibility). Portugal’s legal system is based on civil law, with robust commercial and labor laws fully aligned with EU directives, providing a secure, transparent, and predictable environment for businesses.

In Case an investor is planning to establish an Lda. in Portugal or a corporate business setup, Opesh Group will be helping you in taking the right decision for setting up your business in Portugal and we will also guide you about how to follow the procedure while formulating your company in Portugal.

Types of Business which can be started in Portugal-

• Tourism & Hospitality: The backbone of Portugal’s economy, offering vast opportunities in hotel development (boutique, luxury, eco-tourism), short-term rentals, specialized tour operations, and digital solutions for the travel industry.
• Renewable Energy: Portugal is a leader in renewable energy (hydro, wind, solar, wave power). Opportunities exist in project development, component manufacturing, energy storage, and smart grid solutions.
• Information Technology (IT & Software Development): A rapidly growing tech ecosystem (“Startup Portugal”) attracting global talent. Opportunities are abundant in software development, cybersecurity, FinTech, AI, Web3 technologies, and IT outsourcing/shared service centers.
• Agri-food & Wine: Renowned for its wines, olive oil, and diverse agricultural products. Opportunities exist in sustainable agriculture, organic farming, food processing, and export of high-quality food and beverages.
• Automotive Components: A significant sector with major international players. Opportunities in manufacturing parts, R&D for electric and autonomous vehicles, and related services.
• Biotechnology & Life Sciences: A growing sector with increasing investment in R&D, pharmaceuticals, medical devices, and health tech.
• Shared Service & Business Process Outsourcing (BPO) Centers: Attracts international companies for financial, IT, customer service, and HR shared services due to its skilled, multilingual, and cost-competitive workforce.
• Textiles & Apparel: Traditional industry undergoing modernization, focusing on high-quality, sustainable, and design-led production.

Advantages of Starting Business in Portugal-

• Strategic Global Location: Positioned as a gateway between Europe, the Americas, and Africa, with excellent air and sea connectivity.
• EU & Eurozone Membership: Provides political and economic stability, full access to the vast EU single market, and the benefits of the Euro currency.
• Competitive Operating Costs: Relatively lower labor costs and office rents compared to other Western European countries.
• Highly Skilled & Multilingual Talent: A well-educated and increasingly English-speaking workforce, particularly strong in engineering, IT, and creative fields.
• Strong Government Support for FDI: Active policies, tax incentives, and agencies dedicated to attracting and supporting foreign investment.
• Vibrant Startup & Innovation Ecosystem: A dynamic tech scene, growing number of startups, and increasing international recognition (e.g., Web Summit).
• Excellent Quality of Life: Beautiful climate, rich culture, delicious food, and a relaxed lifestyle, attractive for both business and talent.
• Developed Infrastructure: Modern transport networks (roads, railways, airports, ports) and robust digital infrastructure.

Business Opportunities for Indians in Portugal-

There are excellent business opportunities in Portugal for new investors who are planning to start their business abroad. Portugal’s growing economy, strategic location, EU/Eurozone membership, and booming tourism and tech sectors present compelling avenues for Indian companies. Indian investors with strengths in IT services & Software Development (e.g., FinTech, cybersecurity, AI, Web3, outsourcing), Pharmaceuticals (distribution, potential for R&D collaboration), Renewable Energy projects (solar, wind, green hydrogen), Agri-food processing and export, Automotive components manufacturing, Tourism Tech solutions, and Textiles & Apparel manufacturing, can find significant potential for investment, partnerships, and market entry into the European and Lusophone markets.

Imports & Exports-

Many goods are imported and exported from Portugal. Imports and exports business is an ever-growing business in any country; however, you need to do proper R&D before investing in that product which you can import or export. You need to check whether that product is suitable for your target market and how much revenue you will be able to generate from that market.

Major items which are exported from Portugal:

• Machinery and mechanical appliances
• Vehicles and transport equipment
• Electrical equipment
• Plastics and rubber
• Textiles and clothing
• Agri-food products (wine, olive oil, fruits, vegetables)
• Wood and cork products
• Footwear

Major items which are imported in Portugal:

• Machinery and mechanical appliances
• Vehicles and transport equipment
• Mineral fuels and oils (crude oil, natural gas)
• Chemical products
• Electrical equipment
• Foodstuffs

Major items traded between Portugal and India (as of 2023-2025 data):

• Exports from Portugal to India: Machinery, chemicals, plastics, electrical equipment, cork products, textiles, and some food products.
• Imports in Portugal from India: Organic chemicals, pharmaceuticals, textiles and apparel, machinery, iron and steel products, and some electronic components.

Manufacturing-

Manufacturing in Portugal is a diversified sector, increasingly focused on high-value-added products and innovation. Opportunities are strong in automotive components (supplying major European carmakers), electronics, textiles and apparel (known for quality and design), plastics and rubber products, cork processing (Portugal is the world leader), agri-food processing, and machinery and industrial equipment. The sector is actively integrating automation and digital technologies.

Mining-

The mining business in Portugal is relatively limited compared to its manufacturing and services sectors, but it does possess certain mineral resources. Historically, Portugal was known for tungsten and tin. Current mining activities primarily involve the extraction of copper (e.g., at Neves-Corvo mine), lithium (growing potential for EV batteries), and various industrial minerals such as aggregates (sand, gravel, stone for construction), clays, and limestone. While there are some existing and potential metallic deposits, large-scale, diversified metallic mining is not a dominant feature of the Portuguese economy.

Major Indian companies which are currently working in Portugal-

Several Indian companies have established a presence or are actively pursuing business opportunities in Portugal, particularly in the IT and pharmaceutical sectors, leveraging Portugal’s growing tech ecosystem and EU/Eurozone benefits.

• Tata Consultancy Services (TCS): A major IT services and consulting firm with a significant presence, often providing IT and BPO services.

• Wipro: Also operates in Portugal, offering IT services and solutions.

• Infosys: While not a large physical presence, Infosys and other Indian IT firms may serve Portuguese clients from regional hubs or with dedicated teams, given the country’s digital agenda.

• Lupin Pharmaceuticals: Has a commercial presence in the Portuguese pharmaceutical market.

• Dr. Reddy’s Laboratories: Operates in Portugal, focusing on the distribution and sales of pharmaceutical products.

• Cipla: An Indian pharmaceutical company with a presence in the European market, including Portugal.

• Various Indian Public Sector Banks: Some Indian public sector banks might have representative offices to facilitate bilateral trade and investment.

• GDP = $286 billion (nominal, 2024 est.)

• GDP Growth = 2.2% (2024 est.), 2.0% (2025 forecast by IMF)

• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. However, Portugal has consistently ranked favorably in other international indices for business environment and investor attractiveness, reflecting ongoing reforms to streamline processes and foster investment.

• GDP per Capita = $27,970 (nominal, 2024 est.)

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