Europe’s most westerly country, Portugal is has ties to its former, Portuguese-speaking colonies such as Angola, Brazil and Mozambique, opening up a market in excess of 250 million people. It also has strong links with the UK, not only as a popular tourist destination, but as home to around 80,000 ex-pats.
The UK is currently the fourth largest investor in Portugal, and its sixth largest supplier, with services worth €1.3 billion, and goods exports totaling €1.8 billion, most of which were accounted for by:
- Life sciences
- Information economy
Services exports were in travel, transport and other business services.
Here’s everything you need to know about exporting to Portugal.
Where is Portugal?
Portugal is Europe’s most westerly country with an Atlantic coastline to the west and bordered by Spain to the east.
It’s capital, Lisbon, is just over 1,300 miles from London, with regular daily flights available.
The national language is Portuguese, the currency is the euro, the dialling code is +351, and the top level domain for websites is .pt.
What are the pros and cons of exporting to Portugal?
If you’re thinking of exporting to Portugal you’ll be glad to hear there are no major obstacles to UK companies looking to develop trade over there, thanks largely to it being both a member of the EU and old trading partner of the UK.
One possible stumbling block is is that many Portuguese companies work on 90 to 120 days payment terms – it can be even longer for state or public administration payments – and so consider this when negotiating contracts.
There are many positives for UK businesses trading in Portugal though, such as:
- entry route to Lusophone markets
- English widely spoken and accepted as business language
- same time zone as the UK
- low cost flights to Lisbon, Oporto, Faro and Funchal
- 25% of tourists visiting Portugal are from the UK
- early adopter of new technologies
And the strengths of the Portuguese market include:
- one of the lowest operational costs in western Europe
- competitively priced locations and facilities readily available
- strong technology investment through hubs in local universities, particularly for healthcare and Information and Communications Technology (ICT)
If you want to trade with Portugal, you’ll need a reliable and cost-effective teleonference provider to help keep in touch when travelling isn’t an option. Here’s How to set up a conference call between the UK and the Portugal.
And remember, you can now screen share and video conference, using Crankwheel.
How does tax work in Portugal?
Portugal and the UK have a Double Taxation Agreement in place, which means duties paid in Portugal can be claimed back in the UK.
The main tax rates in the Portugal are:
- VAT – known as Imposto sobre o Valor Acrescentado (IVA), sales tax is set at 23%, but there are reduced rates of 13%, 10% or 6% that may apply to some supplies. It is paid by everyone and there is no distinction between residents and non-residents.
- Corporation tax – charged at a rate of 21%.
- Income tax – charged at a general rate of 20%, but income derived from real estate is subject to a tax rate of 10%.
How will I be affected by customs in Portugal?
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.