DOING BUSINESS IN PORTUGAL
Portugal is the oldest nation-state in Europe, having continuously been fought over since prehistoric times, though its borders have altered little since 1297. Now a founding member of NATO and a member of the European Union (EU) Portugal still retains its global importance. Located in the westernmost part of the Iberian Peninsula and home to a population of more than 10.3 million people, the country offers a vast consumer market and trade links for companies thinking of doing business in Portugal.
Despite suffering a severe financial crisis following the economic downturn, Portugal has recovered better than countries such as Greece and Italy. Indeed the global economic crisis came at the end of a decade of fiscal stagnation for Portugal and encouraged the government to change a number of its policies to surpass EU growth predictions. At present, with an upward economic trajectory, Portugal consistently scores highly on the World Bank’s ‘Ease of Doing Business’ reports and offers one of the lowest operation costs in western Europe. The main agricultural products are cereals, olives and their vineyards. The main industries in the highly diversified economy are cement production, fishing, oil refineries, automotive and shipping machinery, paper injection moulding, electrical and electronics, plastic products, textiles and leather. Interestingly Portugal is also the world leading producer of cork!
While business culture in Portugal is formal, the Portuguese people are generally very warm and friendly, so expect hospitable introductions. Indeed, the country’s corporate affairs remain primarily relationship based.
Portugal’s economy was severely hit by the banking crisis and resulting recession. And, as a result the country has really struggled over the past decade. However, many commentators feel that the shockwaves resulting from the crisis will – given time – provide the impetus for Portugal to carry out several long-needed structural reforms. These reforms it is argued will provide Portugal with a much more solid base to build a strong sustainable economy for the long-term.
It was felt that, for many years, Portugal struggled with a bloated and inefficient public sector which was not only a drain on public finances but also served as a barrier to private investment and entrepreneurship. One of the conditions of the economic bail-out which Portugal was forced to seek following the crisis was that these structural imbalances would be tackled. This process was always going to be a challenge but there are signs of progress and the economy is definitely showing signs of a return to healthy growth.
Given where Portugal is on its path to economic growth there is a strong argument in favour of looking at doing business in Portugal now. It is usually good to enter a market at the early stages of an upward trajectory and Portugal certainly fits that criteria.
If you are considering doing business in Portugal or already have contacts in-country, you would be well-advised to find out a little more about the very distinct business culture you will encounter there. Portugal remains a relationship-based business culture but how do you best form and maintain those relationships? What do you need to know about the key drivers of Portuguese contacts to allow you to maximise any potential commercial opportunities?
This country profile provides an overview of some of the key aspects of Portuguese business culture in a concise, easy to follow-format. The document includes information on:
- Background to business
- Business Structures
- Management style
- Women in business
- Top tips
The World Business Culture website has all the information you need to form and maintain these business relationships when doing business in Portugal, as well as the knowledge base on legal, tax and financial frameworks so as to ensure success when doing business with the Portuguese.