Starting a Business in Portugal: Why You Should Use a Professional Employer Organization

  • Professional employer organizations (PEOs) are significantly different from traditional staff outsourcers, with transparency and financial incentives alignment being critical advantages.
  • Through co-employment, the PEO becomes the employer of record of your team for tax purposes, through filing payroll taxes under its own local legal entity.
  • PEO offering includes payroll processing, employer tax and social security payments, regulatory and health compliance, human resource consulting, benefits management, mandatory insurances and risk mitigation services.

If you’re looking to expand your business to Portugal using a lower-risk model, engage the services of a PEO and contact us today.

As a successful business owner, it is only a matter of time before you start mapping out a plan for your expansion. As part of your market-entry strategy, you will be likely to explore all the advantages and pitfalls of establishing a satellite office abroad and therefore creating a legal entity for your company in another country. With these options comes the hefty task of understanding and complying with local employment law and trading regulations. In many cases, such operations are time and resource-intensive, especially if you are considering moving to a country with a different official language than yours.

Using professional soft-landing services can help in this journey and avoid common mistakes. But if you are not ready yet to take the leap, there is an easier and less risky solution for businesses that are looking to dip their toes in a new market without overwhelming themselves with major investments and a raft of foreign compliance requirements. If you’re looking to expand overseas using a cost-effective, lower-risk approach, engage with a PEO.

Going International: Why and How

In today’s global economy, companies of all sizes are establishing operations in foreign markets. This type of expansion can provide several advantages, including greater opportunities for market growth and diversification.

If you are thinking about going international, here are a few things to consider:

  1. New Markets — many of your potential customers may be located in a different geographical area, and if your business is doing well domestically, you’re already a step ahead to succeed globally. Just make sure you are considering the cultural factor.
  2. Competitive Advantage — to put it simply: more customers, cheaper supply chains, but also new competitors. By being obliged to adapt to a new local need, your company is forced to innovate and find new solutions to stand out in the market. Being in a new country can also give you access to several critical opportunities such as a broader talent pool, R&D incentives, price arbitrage opportunities, strategic partnerships, and many other benefits to increase your (national and global) competitiveness.
  3. Diversify the risk — risk diversification is another essential reason why companies expand into international markets. The uncertainty brought by recent global events such as Brexit and the US Elections is likely to significantly affect businesses. Therefore, it is safer to tackle other countries and as a result minimize the impact in case something goes wrong in your home market.
  4. Governments Incentives — Many countries around the world offer incentives for companies looking to expand their operations internationally, as it brings new business to their territories. One common incentive is lowered taxes after deductions. Because of this, many U.S. businesses take the opportunity to expand overseas in order to lower their overall income tax rates.

When you’ve exhausted growth opportunities at home, global expansion can help to grow your business, but while expanding brings plenty of opportunities, there are also some drawbacks.

Before entering a new market, it is vital to consider the regulatory and cost hurdles associated with employing workers overseas. Every country has its own employment laws to contend with — which can be daunting for even the savviest businesses (and a major obstacle to expansion across borders).

BRIDGE IN — Your PEO in Portugal

If you’re unsure about managing payroll overseas, onboarding new employees or completing visa applications, a Professional Employer Organisation can take full responsibility for all employment issues, improve cost structures and reduce risk by keeping you on the right side of compliance. Additionally, with PEOs, the workforce is fully aligned to your company culture and you have complete visibility and control regarding salaries and benefits, avoiding common pitfalls and shady tactics of some outsourcers. PEOs take care of logistics and all your personnel administrative functions and lease the employees back to you.

By working with BRIDGE IN as your PEO in Portugal you will be able to:

  • Expand your operations to Portugal quickly — you don’t need to establish a legal entity to start operations in Portugal. You can onboard employees first — we will hire and employ professionals on your behalf, legally contracting them through our subsidiary in accordance with Portuguese labor laws.
  • Have a flexible growth plan — You can start your expansion at your own pace while keeping your options open. We will support you while building your team and help you establish a branch in Portugal and incorporate the employees, if and when the time is right.
  • Move long term contractors to a compliant solution — you may already have contractors working for you from Portugal. By partnering with us, you can offer your contractors the same benefits and security as other staff members within your organisation.
  • Get a personalised service — we are not a global generic PEO, we specialise in helping tech or tech-enabled companies set foot into the European market through Portugal. BRIDGE IN staff has extensive experience in recruiting and managing tech, sales and customer service teams on behalf of international companies.


Originally published at on October 27, 2020.

BRIDGE IN helps companies set-up their tech hub and hire talent in Portugal. We are the OS for distributed teams.

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