Destinations Catalog

The Portuguese Republic

Portugal
Population:
10 304 434
Capital:
Lisbon
UTC:
+00:00
Ease of Doing Business Index:
29
Currency:
EUR ($1 = EUR 0.89)
Unemployment Ratio:
12.4%
Income Tax:
14.5-45%
Corporate Income Tax:
21%
Social Tax:
11%
Notice Period:
15-75 days
Dismissal Period:
7-180 days
Turnover Ratio:
-------
Office Rent:
$7-28.70/m2
IT Headcount:
17 500
IT Graduates:
7 000
Average Salary
Junior
Middle
Senior
Lead
$ 1 250
$ 2 600
$ 3 100
$ 3 500
English Level
High Proficiency
Main IT Outsorcing Destinations
Cities
IT Headcount
Main IT Outsorcing Destinations
Cities
IT Headcount
Portugal
Country Description

Portugal is located in Southwestern Europe. The country has quite recently overcome the period of a prolonged crisis and the period of economic growth has started. The key segments the Portuguese economy is based on are the service sector and tourism. The population of the country exceeds 10 mln people. The most dynamically growing segments are health, public services, energy, and communications, solutions in the field of security, virtualization, unified communications, and mobile communications.

Population
10 304 434
Capital
Lisbon
UTC
+00:00
Currency
EUR ($1 = EUR 0.89)
Ease of Doing Business Index
29
Unemployment Ratio
12.4%
Income Tax
14.5-45%
Corporate Income Tax
21%
Social Tax
11%
Notice Period
15-75 days
Dismissal Period
7-180 days
Turnover Ratio
-------
Office Rent
$7-28.70/m2
IT Headcount:
17 500
IT Graduates:
7 000
Average Salary
Junior
Middle
Senior
Lead
$ 1 250
$ 2 600
$ 3 100
$ 3 500
English Level
-------

*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org

Country Description

Portugal is located in Southwestern Europe. The country has quite recently overcome the period of a prolonged crisis and the period of economic growth has started. The key segments the Portuguese economy is based on are the service sector and tourism. The population of the country exceeds 10 mln people. The most dynamically growing segments are health, public services, energy, and communications, solutions in the field of security, virtualization, unified communications, and mobile communications.

Income Tax

Portuguese tax system consists of state and local taxes imposed on a personal income, which are generally calculated based on income, expenditure and property ownership.

As of 2019, the distrubution of taxes depends on the income sum, therefore:

  • Up to €7,091 – 14.5%
  • €7,091 – 20,261 – 28.5%
  • €20,261–40,522 – 37%
  • €40,522–80,640 – 45%

An interesting fact about Porruguese taxation is that a married couple’s income is taxed jointly.

Corporate Income Tax stands at a flat rate of 21%. However, capital gains and investment income may be subject to special rates.

Social Тax

Both residents and non-residents of Portugal are liable to personal social security contributions at 11%.

Social security contributions for employers are 23.75%.

Notice Period

The Portuguese legislation does not envisage a notice period upon dismissal of an employee. Of course, the dismissal cannot be completed without providing grounded reasoning for it and an employee should be notified in writing about it.

Depending on the reason, the notice period terms are yet established by the Law. The three main reasons for it are the end of the contract (with/without term), serious cause (conflicts, failing to duly perform the job, physical violence towards other employees, neglecting safety at a workplace, etc.), or unfitness for the position/role:

  • end of the contract (with a set term) – 15 days prior to the contract’s expiry date;
  • for serious cause (within a year) – 60 days prior to dismissal in writing
  • unfit for the role (after discussion between the parties) – within 30 days
  • extinction of the position – 15-75 days depending on an employee’s position

Dismissal Conditions

Based on the current legislation, an employment contract without a set term can be terminated by the employer due to the following reasons:

  • end of the contract
  • for serious cause, e.g. conflicts, failing to duly perform the job, physical violence towards other employees, etc.)
  • unfit for the role
  • extinction of the position

Of course, the dismissal cannot be completed without providing grounded reasoning for it and an employee should be notified in writing about it.

Hiring Period

Up to 60 days

Office Rent

The prices for office rent in Portugal on average vary between $7-28.70/m2 depending on location, furniture available, etc. For instance, an office for rent in Lisbon will cost between $9.50-21.50/m2 without furniture, and $20-28.70/m2 if it is furnished. The price for the same office type in Porto will vary between $7-14.30/m2 without furniture.

IT Headcount

The Portuguese IT industry currently employs about 17.5K specialists, however, the industry is rapidly growing owing to the government’s initiatives on attracting startups and enticing entrepreneurs by providing tons of benefits for their investments. The country’s IT sector has become known owing to some major programs that attract representatives of start-ups from other countries – the Lisbon Challenge, the Building Global Innovators, the Startup Braga, the UPTEC Ace, inRes – Entrepreneurship in Residence. Among the promising startups from Portugal can be called Unbabel, a service that combines machine and human translation; as well as Landing.Jobs, an online platform for IT recruiting. One of the largest tech events – WebSummit was held in Lisbon for three consecutive years and was a huge success for both the conference and the city.

IT Graduates

Portugal is one the most popular countries for obtaining technical education since it has a lot of schools and universities that provide technical education; it is involved in numerous international programs. Another benefit of local education is that many universities are affiliated with several research centers, hence, their students get great opportunities to practice their skills as well as test their knowledge. The classes may be held in Portuguese or English, therefore, the students coming to Portugal from abroad should have a basic knowledge of the English language to be able to attend classes.

Amidst the best universities/schools offering high-quality tech education are:

  • University of Lisbon
  • Instituto Superior Técnico
  • University of Coimbra
  • University of Porto
  • University of Minho
  • Lusophone University of Humanities and Technologies
  • Polytechnic Institute of Bragança
  • NOVA IMS
  • Polytechnic of Leiria
  • School of Economics and Management, University of Porto
  • University of Algarve
  • University Fernando Pessoa

Average Salary

The salaries of IT specialists in Portugal are way lower than in other Western European countries, and that is one of the points that attracts companies to cooperate with the local companies. The key advantages are the country’s location and low price for the services. The average salaries range as follows:

  • Junior Software Engineer – $1250
  • Middle Software Engineer – $2600
  • Senior Software Engineer – $3100
  • Technical Lead – $3500+
Need to compare any destinations? Add the destination to your comparison list.

*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org