Foreign employer in Portugal: hire faster with less cost
If Portugal is on your radar for expansion, then the foreign employer setup might be just what you need. Why? Because establishing a subsidiary in a new country can be such a complex process—and that’s what the foreign employer in Portugal model can avoid.
All you need to do is register in the country as a non-resident entity. And that’s it. Discover now how it works in detail and why it can ease your expansion.
What you’ll learn:
Foreign employer in Portugal: What is it and how it works
Foreign employer in Portugal: All the FAQs answered
How do I know this is the right setup for my business?
Can I hire full-time employees as a foreign employer?
Do I need to open a company in Portugal for this?
How long does it take to register as a foreign employer in Portugal?
What is the difference between Foreign Employer (FE) and Employer of Record (EOR) setups in Portugal?
Can a foreigner set up a company in Portugal?
What is the average salary in Portugal?
Foreign employer in Portugal: What is it and how it works
A foreign employer in Portugal is a company that doesn't have a permanent establishment in the country but still wants to hire employees there––which may be your business case.
So, instead of undergoing the lengthy and often complex process of company incorporation in Portugal, you can opt for the foreign employer alternative, registering as a non-resident employer in the country. By doing so, you also register with the Portuguese tax authorities and social security.
This registration allows you to legally hire and pay employees in Portugal, manage payroll, and comply with local labor laws and tax regulations. And yes, we can help you with that.
Registering as a foreign employer in Portugal creates many benefits for international businesses. And it accelerates the whole sourcing and hiring process—as it offers a streamlined alternative to setting up a local entity.
It allows you to directly hire top local talent in less time and with fewer costs. But those aren’t the only benefits:
Expand your business in a shorter time
Hold direct work relationships with your team
Avoid setting up a full subsidiary or legal entity
Gain access to local talent and operate under the law
Stay compliant with Portuguese tax and labor regulations
But maybe you still have doubts. And that’s ok. Let’s answer them now.
Foreign employer in Portugal: All the FAQs answered
Although it’s a straightforward setup, many questions must cross your mind. That’s why we’ve gathered the most common information about the foreign employer model in Portugal.
How do I know this is the right setup for my business?
We can help you with that by analyzing your specific case and providing tailored advice. But, in general, this is the perfect setup for:
Startups or SMEs testing the Portuguese market
Non-profits that need a direct employment contract
Remote-first companies hiring employees in Portugal
Global tech businesses or scale-ups expanding gradually
Can I hire full-time employees as a foreign employer?
Of course! The foreign employer setup allows you to hire employees under standard full-time contracts, adhering to Portuguese labor laws—regarding working hours, benefits, and termination procedures. This provides your Portuguese team members with the security and rights they’re entitled to. But do remember that you’re legally responsible for your team and all operations—to reduce those risks, make sure you partner with a local payroll provider like BRIDGE IN.
Do I need to open a company in Portugal for this?
No! And this is a game-changer!
The foreign employer model eliminates the need to open a local subsidiary in Portugal. All you need to do is register as a non-resident employer, allowing you to fulfill your obligations as an employer without the complexities of business incorporation.
This is particularly helpful if you enter the Portuguese market with caution or manage a distributed workforce.
How long does it take to register as a foreign employer in Portugal?
In general, registering as a foreign employer in Portugal is quicker than opening a new company. While timelines can vary depending on your business characteristics and the local authorities’ efficiency, you can have it ready in 2 weeks.
But you do need all the documentation ready to begin the process, as this also affects the timeline.
What is the difference between Foreign Employer (FE) and Employer of Record (EOR) setups in Portugal?
Understanding the difference between the Foreign Employer (FE) and the Employer of Record (EOR) setups is critical for your business expansion. While both allow you to hire in Portugal without owning a local entity, they differ in their responsibilities.
As an FE, your company registers as a non-resident employer with the Portuguese authorities and remains legally responsible for compliance and employment matters. On the other hand, an EOR becomes the legal employer of your staff in Portugal, handling all aspects of employment for you—including payroll, taxes, HR, and legal compliance.
Choosing between these models depends on your company's resources, risk tolerance, and long-term strategy for the Portuguese market.
Can a foreigner set up a company in Portugal?
Yes, a foreigner can indeed set up a company in Portugal. However, as we’ve already mentioned, the foreign employer route offers a less complex initial step. Setting up a company involves more legal and administrative hurdles, including deciding the type of company you want, registering it, obtaining all the licenses and permits, and potentially opening a local bank account.
The foreign employer solution provides a streamlined alternative for companies looking to test the waters or with a smaller initial team.
What is the average salary in Portugal?
When hiring in a new country, it's natural to wonder about salary expectations. However, the truth is that specific salaries vary depending on the role, industry, and experience level. So here’s what we can confirm: the minimum wage in Portugal in 2025 is €870.
Keep in mind that the country's cost of living is generally lower than many other Western European countries, which can influence salary considerations.
In short, the foreign employer model in Portugal offers a compelling and efficient pathway to building a local team. It avoids the complexities of establishing a physical entity and creates a direct connection to the country’s top talent pool—while ensuring full compliance with local regulations.
Whether you run a startup and are testing the market, a non-profit with direct hiring needs, or a global enterprise scaling your operations, registering as a foreign employer in Portugal grants a streamlined solution to your Portuguese venture. Ready to simplify your expansion?
