Employer of Record in Portugal: No office? No problem (here’s why)
If you can’t stop thinking about growing your team in Portugal, you must consider the Employer of Record (EOR) setup. Why? Because that’s how you employ without a physical office and a legal entity in less time and with less investment. An Employer of Record in Portugal will act as an intermediary between you and your team—handling all legal, compliance, and fiscal matters.
But there’s more.
What you’ll learn:
Employer of Record in Portugal: Why this country?
Employer of Record in Portugal: What it is and why you should consider it
What an EOR does for you behind the scenes
EOR vs. PEO: What's the difference?
Your step-by-step guide to hiring with an EOR in Portugal
How to choose the right Employer of Record in Portugal
Employer of Record in Portugal: Why this country?
Portugal is a great spot for your team. Guaranteed. And it’s all thanks to its warm weather (all year round), breathtaking landscapes, delicious food, and welcoming culture. So it’s no surprise that many companies are choosing Portugal to expand into. And there are more reasons for that:
Strategic location: It’s a great bridge between Europe, Africa, and the Americas;
A skilled and diverse workforce: Portugal has a talented and multilingual talent pool, especially in the tech and creative industries;
Economic stability: The country has shown stable economic growth, making it a reliable investment destination. In fact, the forecast predicts that the country’s economy will grow by an additional 1.8% compared to 2024;
Government incentives: Portugal offers different programs and incentives that can be attractive for new businesses and foreign investment.
So, if you’re looking to grow into a fresh talent market, you should take a look at Portugal.
Employer of Record in Portugal: What it is and why you should consider it
An Employer of Record (EOR) is an intermediary that legally employs your team members in Portugal on your behalf. This means you don't need to spend months (and a lot of money) setting up your own legal entity, registering with local authorities, or trying to figure out complex tax systems.
Instead, the EOR handles all those official employer responsibilities. As the client company, you get to focus on what you do best—managing your team’s daily work, projects, and overall performance.
It’s a fantastic way to expand globally without the typical risks and administrative burdens.
What an EOR does for you behind the scenes
An EOR takes care of all the complex (often intimidating) tasks, so you don't have to. They act as your legal employer in Portugal, ensuring everything runs smoothly and compliantly. This includes:
Legal and administrative tasks: Drafting compliant employment contracts, managing onboarding paperwork, and ensuring all documentation adheres to Portuguese labor laws.
Payroll management: Ensuring your employees get paid on time every month and handling all necessary payroll calculations—including income tax deductions and social security contributions. But you can calculate all the employment costs in Portugal right now for a better understanding.
Mandatory benefits: Navigating Portugal's comprehensive Social Security system and ensuring your employees receive all their statutory benefits, such as:
Social Security: Contributions to pensions, unemployment, and healthcare.
Paid leave: Entitlement to vacation days (typically 22 working days), public holidays, and sick leave.
13th and 14th-month salaries: In Portugal, employees typically receive extra payments in July (vacation subsidy) and December (Christmas subsidy). Also, knowing the Portuguese salary after tax may be helpful.
Compliance and risk management: Staying on top of ever-changing labor laws and regulations, ensuring your operations are always compliant, and mitigating employment-related risks.
HR support: Providing ongoing support for your employees on HR-related matters, managing leave requests, expense reimbursements, travel, and equipment.
Data protection: Ensuring all employee data is handled securely and in compliance with GDPR and local data protection laws.
An EOR in Portugal acts as your local HR, payroll, and legal team all rolled into one, allowing you to integrate your Portuguese team into your global operations seamlessly.
EOR vs. PEO: What's the difference?
When thinking about expanding into Portugal, you might have heard about PEOs––Professional Employer Organizations. While similar, there’s a key difference:
EOR (Employer of Record): This model means the EOR is the legal employer of your staff in Portugal. You remain responsible for their day-to-day work, but the EOR handles all legal and compliance aspects of employment. It's the perfect option if you don't have a legal entity in Portugal.
PEO (Professional Employer Organization): With a PEO, normally, you must register your business in the country. The PEO then co-employs your staff, sharing some HR and administrative responsibilities with you.
For companies looking to hire in Portugal without setting up a local company, an EOR is generally the way to go. And there’s a simple step-by-step you can follow.
Your step-by-step guide to hiring with an EOR in Portugal
Hiring through an Employer of Record in Portugal may be simpler than you think:
Decide your path: First, determine if an EOR is the best option for your business or if setting up a legal entity makes more sense for your long-term goals. For speed, costs, and simplicity, EOR wins.
Choose your EOR in Portugal: This is a crucial step. Picking a reliable EOR with a strong presence and expertise in Portugal is one of the most important steps. So, take your time, as there are many options out there. BRIDGE IN can help you from scratch, if you need.
Hire and onboard: Once you've selected your EOR in Portugal, you can continue identifying and hiring your team. An EOR like BRIDGE IN will then handle the formal onboarding process, including drafting compliant employment contracts and handling all necessary registrations.
Run payroll and manage benefits: The EOR manages the entire payroll cycle and handles all mandatory employee benefits and contributions.
Ensure ongoing compliance: The EOR will monitor changes in Portuguese labor law, ensuring your operations remain compliant by protecting you from potential legal issues.
How to choose the right Employer of Record in Portugal
Choosing the best EOR is critical to a smooth and successful expansion. So, here are a few things to look for when you're picking your EOR in Portugal:
Deep local expertise: This is non-negotiable. You save so much time (and money) if you choose an EOR whose expertise in Portugal is unmatched… Ensure the EOR understands Portuguese labor laws, tax regulations, and cultural employment practices. A strong, established local team is a huge plus.
Transparent pricing: Nobody likes hidden fees or surprise costs. Go for an EOR with a clear, straightforward pricing model—usually a monthly fee per employee or a percentage of the employee’s salary, in some cases.
Available services: Do they offer everything you need? From payroll to benefits administration, tax filings, compliance, and HR support? A one-stop shop is usually best, as long as it’s local.
Stellar reputation: Check out testimonials, case studies, and online reviews. What do other businesses say about their experience?
Solid risk management: Can they demonstrate how they manage and mitigate employment risks, keeping you safe from legal or financial problems?
Close customer support: You'll want an EOR that's responsive, proactive, and genuinely helpful.
Hiring in Portugal doesn't have to be a complicated, bureaucratic nightmare. With the right Employer of Record in Portugal, you get a powerful partner that handles all the complex matters—from navigating complex local laws and managing payroll to ensuring your team gets paid on time.
This means you can tap into Portugal's impressive talent pool quickly, compliantly, and without the hassle of setting up your own local entity. It's about making your international expansion smooth, efficient, and stress-free, allowing you to focus on what truly matters: growing your business and empowering your new team in Portugal.
