A handful of the world’s largest companies are opening tech-focused offices in Portugal, while the number of startups in the country continues to grow. Entrepreneurs and economists seem to believe this is a sign of things to come.
Earlier this year, news broke that the American tech giant Google will open a technology center on the outskirts of Lisbon, in the city of Oeiras, creating around 500 jobs. Portugal’s economy minister said discussions on the new hub began last November at the annual Web Summit, one of the world’s largest technology conferences, in Lisbon. The founder of the Web Summit, Paddy Cosgrave, said There are “rumors” that Google is “the first in a series of high-profile tech companies opening large offices in Lisbon.”
Just after Google’s announcement, other news broke Amazon, the American e-commerce giant, is negotiating the purchase of real estate in Porto – Portugal’s second city – in order to build a new European base. The company told the Portuguese newspaper Business Journal that’s all “preparing a major investment in Portugal”. While the Porto project is still under discussion, Amazon decided in September to establish its first office in Portugal in the capital, in order to support the growing network of customers for its web services. The news came just as Amazon hit $1 trillion in profits.
Beyond technology companies, large clothing companies and car manufacturers are setting up shop in Portugal. Zalando in Germany, a fashion e-commerce company, opened a branch in Lisbon late last year. The 16-person team is currently focused on Zalando’s “digital experience”. By the end of the year, the team should have 35 employees.
German car manufacturers Volkswagen and Mercedes-Benz have both established technology hubs in Lisbon. In April, Volkswagen announced it is investing in a software development center in the capital which will focus on the “development of cloud-based software solutions for the further digitalization of business processes… and for the connected vehicle”. In the medium term, the hub will employ around 300 IT professionals.
Mercedes-Benz got a head start by opening its digital technology hub in Lisbon in May 2017. “The Portuguese authorities contributed very actively to the creation phase of the new center with a minimum of bureaucracy,” read a statement by Daimler, the parent company of Mercedes-Benz, on the new offices.
Also in May last year, Vestas, a Danish wind turbine company leading the world in the development and supply of clean wind energy, announced the opening of a technical design center in Porto to work on research and industry-leading development. The center, responsible for developing core technology for the company’s product portfolio, plans to hire several hundred engineers by 2020, when the operation is fully operational.
“The Porto region offers access to a wide range of skills in the areas Vestas seeks to recruit, namely electrical, mechanical and software engineering,” read a statement. Press release Vestas on the new desktop. “The proximity to major universities and other high-level research institutes is the key to choosing Porto and Portugal.”
Other economic factors contribute to the recent attractiveness of Europe’s westernmost country to large technology, clothing, auto and energy companies. For example, Portugal has extremely competitive development prices – that is, software developers in Portugal earn much less than their German or Swedish counterparts, but are of the same quality.
Real estate prices in Portugal are also very competitive, costing much less per square meter than Berlin, Stockholm, Zurich or London. And with an annual inflation rate of around 1 percent, the cost of living in Lisbon is also much lower than the aforementioned cities.
Political changes following the global financial crisis also favored the flow of business investment into Portugal. As the country strived to become a business- and startup-friendly state, it rolled out a new tax incentive in May 2013, which allows a 20 percent tax deduction on investments of up to five million euros – this can reduce the corporate tax rate in some cases by up to 5.5 percent, per compared to the normal rate of 24 percent.
Specifically regarding startups, the Portuguese government has also relaxed residency programs for foreign startups and reduced bureaucracy, so that startup founders can set up their business through a simple form. online process. The government also allocated 200 million euros to help foreign companies invest in local companies or set up in Portugal.
The plan seems to be working. Startup Lisbon, an incubator launched in Lisbon in February 2012, already hosts 280 startups and has created more than 1,500 jobs. Businesses range from commerce to tourism and of course technology. Fireflyfor example, is a technology start-up based in Lisbon that uses “the sensing capabilities of Earth observation satellites to automatically detect areas with dense vegetation, low soil moisture and high surface temperature”, in the goal of preventing wildfires before they start.
As Portuguese policies continue to support businesses – large and small – and the education system continues to produce highly skilled technology professionals, the future of the country’s business landscape only looks positive.