Portugal is much more than just a tourist destination with superb cuisine and incredible landscapes. This country, positioned on the most westerly edge of Europe, has become a paradise for startups – either to discover that they can incubate themselves among the existing startups in the country or carry on from where they left off.
One of the many reasons that put Portugal at the forefront of chosen countries for startups is the existence of an ecosystem that promotes technological development. In fact, Portugal is the nest for some high-tech innovations such as one of the most sophisticated banking networks in the world (Multibanco network), the first closed system of automatic highway tools around the globe (Via Verde), and the pre-paid Mobile Phones, that quickly became the foundation for the mobile revolution we have come to know. The digital transition is an essential economic driver in this country, and in 2019 there was a direct impact on the Portuguese economy of €13 billion, representing 6% of the national GDP. In the last two years alone, this sector has grown by 1.2% in the digital relative weight of national GDP.
The virtuous technological ecosystem combined with favourable geographic positioning and a qualified workforce has also brought in the investment of major technology companies such as Amazon, Google, Microsoft and Nokia.
But startups aren’t choosing Portugal just because big companies are investing in the country, they are also being brought to life here – and proving so, four Portuguese unicorns (startups valued at more than one billion dollars) were born:
- Farfetch, an online luxury fashion retailer with a large part of its operations based in Portugal, has taken its first steps towards getting listed on the New York Stock Exchange;
- Outsystems, a rapid-development platform for low-code applications that allows coding to be customised whenever necessary;
- Talkdesk, the startup with the fastest Portuguese unicorn status, is a platform for companies to personalise their phone service to customers;
- Feedzai, a startup specialising in artificial intelligence to prevent and detect payment fraud at financial institutions, announced a Series D investment round of 200 million dollars this year, which raised its valuation well above the one billion dollars mark, thus becoming the fourth Portuguese unicorn.
Another reason why Portugal has become so attractive is the incentives and efforts that the country has gone on to develop its technological sector. The Portuguese government has set up the program ‘StartUP Portugal’, which aims to publicise the startup ecosystem in the country on a global scale. The program currently has 25 ongoing initiatives to support startups, examples of which are:
- The StartUP Voucher, which helps bring projects to life, is created for young adults, between the ages of 18 and 35, with a duration of 12 months while they consolidate their ideas. It provides a grant, support and bonuses;
- The Incubation Voucher supports the first expenses of the startup, subsidizing 5000 euros that can be used in one of the 135 incubators in Portugal;
- Similar to the Golden Visa, the StartUp Visa is a residence visa for non-EU residents who want to create or develop their startups in Portugal, thus taking advantage of the possibilities provided by Portuguese and European markets. This visa is awarded to startups that have the potential to generate more than 300,000 euros within the first five years of choosing an incubator;
- The Non-Habitual Resident status is a tax system that grants a favourable tax rate of 20% or a total exemption on the taxation of income of expatriates who choose to live in Portugal, for a period of 10 years;
- Road2WebSummit is a partnership between StartUP Portugal and WebSummit aiming to help Portuguese startups make the most of the event. This assistance involves training sessions on how to talk to investors, prioritize their goals, work the room and other valuable skills before, during and after the event;
- The program also encompasses entrepreneurs looking for partners to invest and collaborate in technology-based companies or other Portuguese and international market sectors (Portugal Ventures).
Today, Portugal is one of the most attractive countries where there is still plenty of space to grow and in which multinationals can expand and create jobs, and new companies can take their first steps to settle.
Sounds interesting, right?