Doing business with a Portugal PEO/EOR
Known for its flourishing tourism and agriculture industries, Portugal’s economy has been on the rise in recent years. Whatever size of workforce you are looking to employ in Portugal, partnering with an established global PEO can help simplify and expedite the process.
Portugal offers foreign investors favorable expansion opportunities with inviting tax laws and relatively soft regulations, which makes it a popular location for foreign businesses expansion.
Why Use a PEO in Portugal?
A Portugal PEO solution can simplify the process of expanding your business into Portugal by allowing the PEO to manage the hiring and onboarding processes, saving your company significant time and money. PEOs in Portugal give businesses an advantage by statistically decreasing the likelihood of employee turnover, in addition to being able to offer specific advice for navigating the complexities of the country’s local employment regulations. Employment specialists can also help expedite office space rentals, manage employment contracts, and much more.
How to Hire in Portugal
The process of hiring in Portugal includes the practice of assembling a strong, written employment contract that specifies the details of the employee’s compensation, benefits, and termination requirements. Both the offer letter and employment contract for employees working in Portugal should always state the salary and any additional compensation in Euros.
Keep in mind that Portugal offers all of its residents a basic health insurance plan, so it is not essential to provide this benefit to local employees.
As every culture presents different hiring challenges and opportunities, utilizing the recruitment channels with the highest potential yield is especially important for the process of hiring talented professionals in Portugal. It is common in Portugal for companies to source and eventually hire their employees through networking events and recommendations stemming from both personal and professional relationships.
This is due to the fact that personal relationships and building trust are of the utmost importance in this country. Of course, finding these personalized recommendations and connections can prove to be challenging if you are trying to recruit in Portugal from your office in your home country. This is where your company can likely benefit from working with a Portugal PEO that already possesses in-country connections.
In order to successfully hire in Portugal, it can also be helpful to work with a recruitment agency to simplify and expedite the process of hiring talented professionals in the country. On occasion, global PEO organizations will have an in-house recruitment agency that will significantly aid the process of recruiting in Portugal. The benefits of using a recruitment agency to improve your overall hiring process include:
- Having access to local recruitment experts who are familiar with the Portuguese market and the best hiring practices.
- Partnering with an organization that is designed to understand the specific goals of your business and that can create a recruitment search process that is designed to fulfill your exact needs.
- Being able to take advantage of the recruitment agency’s local legal expertise to ensure that your business is compliant with the local laws and regulations in regards to employment.
Additionally, when you partner with a PEO that also offers recruitment coverage, you receive the benefit of having ongoing support that includes the hiring and onboarding processes in addition to the initial recruitment phase.
Below we have listed our recommendations for the 3 Best Portugal PEOs and Employers of Record. These companies all possess outstanding reputations for being able to hire talented professionals in Portugal as well as ensure full compliance with local employment regulations.
Best Portugal PEOs and Employers of Record
With offices throughout Europe, Horizons is a top-tier PEO/EOR in Portugal as well as elsewhere on the continent. Unlike many other PEO companies, it places high importance on having local consultants who truly understand the employment and business landscapes in which companies operate.
In doing so, it is able to guide executives through the often complex processes involved in setting up a business in Portugal, as well as assisting any foreign staff to understand the business culture and etiquette.
GlobalizationPedia identified some of Horizons’ key advantages compared to its competitors:
- Local, Horizons-owned entity with a local team on-site in Lisbon.
- Competitive pricing, with flexible service agreement (can usually end service in 60 days without penalty fees).
- Bilingual labor contracts.
- Local, expert tax support resources to help employees take advantage of local tax schemes (e.g. NIF and NHR).
- Horizons’ Portugal entity is enrolled in the “Tech Visa Program”, which allows them to hire non-EU nationals quickly and efficiently.
Global PEO has grown their organization and continued to provide superb global expansion guidance in recent years. The group is based in Hong Kong, but their knowledge base in other countries is localized and up-to-date with the modern working culture. The company’s cost-effective nature is a strong selling point for businesses expanding into Portugal, and offers pricing rates that are competitive compared to industry norms. In addition to recruitment and hiring services, they’re also set up to take on a variety of duties based around entity setup, staffing, payroll, and a variety of administrative functions.
SkyExecutive is a recruitment agency and Professional Employer Organization (PEO) with local operations in Portugal. This means that Sky Executive has the ability to leverage their recruitment services with their day-to-day employment solutions to provide a unique set of PEO benefits for companies looking to expand overseas and provide a single point fo contact for these businesses. SkyExecutive places high value on its network of local consultants based in Portugal, with that level of local expertise being helpful for companies looking for a smooth transition into a new business environment.
Why are Deel, Remote, or other companies missing?
Deel, Remote, and other market-leading EORs are fine companies – but they may not be the best choice for hiring in Portugal due to several factors:
- Such companies often prioritize hyper-growth, driven by investor demands for rapid expansion, over ensuring compliance with local regulations and protecting the interests of their customers. This can lead to potential legal and financial risks for companies utilizing their EOR services.
Example: A company focused on hyper-growth might encourage employers to hire de-facto employees as contractors, opening the client up to employee misclassification risk unnecessarily.
- In the past, we’ve seen that such ‘young & tech-driven’ providers may not meet the necessary license requirements for providing EOR services in Portugal – as may take years to apply for – further jeopardizing compliance.
Example: To best mitigate Portugal PEO risks, a Portugal PEO should know about employee entitlements in Portugal, such as the 13th and 14th month salaries, the required WFH allowance, and the mandatory medical check. It’s also important to note that employment agreements in Portugal are not permitted to be backdated. Do your due diligence to make sure a Portugal PEO can answer these questions (and any others about the specificity of Porgual labor laws)
- Relying on a virtual-only support team can make it challenging to address any issues or concerns that may arise, potentially causing delays or disruptions in operations.
Example: If there are no local support staff in-country, your Portugal employees could be left without answers to their important questions. If you go with a company that outsources their support staff to another time zone or to non-HR specialists, you might risk losing candidates, or worse, employees.
Request a Proposal
If your business is looking to expand its operations into Portugal, GlobalizationPedia can connect you with a PEO that best fits your needs. Fill out the form below and our expansion experts will leverage our extensive database of strategic partnerships to provide you with a full breakdown of the best potential PEO matches for your company.’