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10 reasons to start a startup in Portugal. Requirements for a startup visa in Portugal

Lisbon is one of the most livable cities in the world. It’s rich in culture, well-developed infrastructure, sustainable transport links, and low rental prices and has been a gathering place for talents from all over the world for the past few years. A few years ago the city was recognized as the startup capital of the world – and no wonder! Everything in the country is being done to give way to medium and small businesses and to bring more and more modern technology into Portuguese society. But why are our compatriots increasingly thinking about the possibility of opening a startup in Portugal? Here are 10 reasons why it’s a great idea!

Value for money development in Lisbon
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Value for money development in Lisbon

It is no secret that most successful startups now focus specifically on the IT field. AR, online banking, smart homes – the list is huge! So why is it so profitable to open your IT startup in Portugal?

Have you noticed an interesting fact: some of the best employees working for global IT companies are Portuguese. This is partly because local faculties (primarily FCT-UNL and IST) produce hundreds of great developers every year. A huge number of Lisbon residents between the ages of 20 and 30, 53%, are STEM graduates. This largely ensures a huge demand for developers from Lisbon-based startups and technology firms.

Development in Lisbon is much cheaper than in London, Paris, Berlin, or Zurich. Portuguese developers are some of the best, and yet their services often cost only a third of what they would cost in major U.S. cities, and about half that compared to most European cities.

In outsourcing, specialized agencies here charge $50 to $99 an hour, meaning you can get a full development and data processing team here for the same price as hiring and management services in London.

If you build a startup in Lisbon, you get high-quality development using advanced Another equally large part of the technical talent comes to Portugal from abroad. The reason is simple: transparent and open immigration programs. There is an option for everyone: if you plan to start your startup, there is the Startup Visa, and for professionals the D3 and D7 visas are suitable. The latter is more common as it leads to the EU Blue Card, an alternative to a residence permit with more flexible conditions.

There is another reason why developers come from all over the world to develop their careers in Lisbon – a simplified tax regime. For the first 10 years, foreigners working in high-demand sectors are entitled to take advantage of the simplified tax regime (NHR). After obtaining NHR status, all income you receive in Portugal is taxed at a flat rate of 20%. Moreover, you are exempt from tax on any income earned outside of Portugal.

No panic - just positive thinking!
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Real estate prices are 80 to 66% cheaper than in Zurich and Berlin

Office space in Lisbon’s bustling center averages €22 per m² per month. 80% less than in London’s West End.

Despite the recent jump in rent and sale prices in Lisbon caused by the influx of tourists, it is still an affordable place to live. According to Numbeo, the average cost of a one-bedroom apartment in the city center is about €896. While a three-bedroom apartment will cost you about €1,692.

With the decline in tourists due to the coronavirus, there has been a correction in rental prices. We estimate that they are now 10-20% cheaper, which is beneficial to anyone negotiating (or renegotiating) rentals.

Second Home Startup Hubs and the Giant Startup Center

The Second Home company has opened its second location in Lisbon after the first in London. However, they are not the only contenders here. There are plenty of other startup centers and co-working spaces, such as:

  • Cowork Central
  • Impact Hub
  • LACS
  • Startup Lisboa
  • Canopy

The most exciting event will probably happen at the new European startup hub right next to the legendary Tagus River. Factory, a company that creates entrepreneurial spaces, is building a giant space in Lisbon with the support of Startup Lisboa called the Beato Creative Hub. The first phase of construction will cover 35,000 sq. m. (about 100,000 sq. m. is planned for completion) and already includes major companies such as Mercedes.

Крупнейшая технологическая конференция в мире WebSummit
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World’s Largest Technology Conference WebSummit

WebSummit, the largest technology conference in the world, has been held annually in Lisbon since 2016. Bringing together CEOs, founders, and leading experts from global companies, the most promising startups, influential investors, and leading journalists, WebSummit is full of new ideas and fresh perspectives. It’s the perfect place for you and your team to appreciate the competition.

Numerous special initiatives at the Web Summit give extra visibility to new talent. For example, Machine Demo is a stage with live demonstrations of the best products created by budding entrepreneurs. The ALPHA Startup Program connects early-stage startups with the most influential companies, investors, and media. Among the emerging players, the most represented sectors are enterprise software solutions, fintech, AI, machine learning, hardware, gaming, AR, and VR.

Hello! This is MoveToCascais and our regular column, Answers to Frequently Asked Questions from Our Customers. Today's topic is schooling in Portugal.
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International Culture

The city is increasingly on the radar of tourists – especially for short vacations – and is often ranked among the best to visit. More than 120 cities are connected to Lisbon Airport, which served a record 30 million people by the end of September 2019.

Don’t forget that Portugal is currently one of the most popular destinations for immigration from the CIS. This means you can always fit in a community of fellow expats and adapt much easier.

Time zone and convenient location

If you decide to start in Lisbon, you are only one hour behind most Western European countries. For Ukraine and central Russia, the difference will be a little more than 1.5-2.5 hours on average, which is not so critical either, so you don’t have to worry about loved ones or businesses who stayed home.

It is also very easy to get from Lisbon to major European cities. Most of them, such as London, Paris, and Zurich, is on average only a three-hour flight.

Common English
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Common English

Unlike many countries, in Portugal television and movies are not dubbed, but simply accompanied by subtitles. This, and the fact that English is taught as a second language in all schools, means that most Portuguese residents under the age of 40 are fluent in English – especially in the major metropolitan areas. Portugal is ranked 12th on the EF English Proficiency Index.

Bureaucracy has survived a technological revolution

Since 2005 the Portuguese government has pioneered several initiatives to digitize its muckraking bureaucracy, adopting some of the best solutions from abroad. Since 2005, the single ID card has replaced 5 different cards (social security, universal health care, election card, fiscal card, and regular card).

With regard to fiscal issues, the national fiscal portal allows any freelancer to bill directly, and for smaller companies we recommend Invoicexpress.

Часовой пояс и удобное расположение
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How to get a startup visa in Portugal

The grounds for obtaining a startup visa in Portugal and immigration can be a functioning business with books and accounting records or one that exists only on paper – prepared as a business plan with a market analysis and detailed planning, aiming at integration into the Portuguese economy.

There are several grounds for issuing a D2 visa. Depending on the specifics of the situation and the business, they can be:

– Articles of association, and accounting records of the existing company.

– Bank account statement.

– Documents illustrating the business activities – invoices, contracts, and others.

– Documents confirming the qualifications of the company founder.

The solvency of the main applicant and the existence of his residence (owned or leased) must be confirmed.

While having the above documents confirming the establishment of the business is not a guarantee of getting a visa. The fact is that the purpose of the D2 types is to grant a residence permit to foreign entrepreneurs who invest in the Portuguese economy and demonstrate their intention to continue their investment operations. Therefore, when deciding on the issuance of a visa, the social and economic importance of the business and the investments made is assessed.

That concludes our material for today. If you’re ready to change your life for the better today, check out our special offer Resident by the Key. With our help, the immigration process will become clearer and go much faster. We are waiting for you in Portugal!