Boom! Portugal does it again. The Ministry of Economy has just announced that in 2018 they will offer a Portugal Startup Visa aimed at wooing foreign startups to relocate to the Iberian coast. This is a great addition to the D7 Residency Visa which makes it easy to apply for the program to get residency in Portugal.
What is the Portugal Startup Visa?
The Portugal Startup Visa program will fast-track entrepreneurs who wish to establish business innovation in Portugal. The hopes from the government are to increase local hiring, create a new means of tax revenue, and to continue to grow Portugal as the center of tech in Europe.
The entrepreneurs that I spoke with who attended Web Summit all said they would consider Portugal because of the low tax regime, local talent, and the weather.
My team of 20 developers stationed in Berlin would love to move to Lisbon. It’s a great city and more opportunity for great office space” – Said one of my colleagues.
The applications for the Portugal Startup Visa Program will begin on January 201 and must be submitted through an online platform managed by IAPMEI.
Who is eligible for the Portuguese Startup Visa?
In order to be eligible for the Portuguese Visa, a foreign entrepreneur must show they will move their business activities to Portugal. These businesses can include business lines such as manufacturing of goods, information services, and other innovation knowledge services. The guidelines are a bit vague, but to me, it reads manufacturing, tech startups, and knowledge workers. Once you establish that, you can incorporate in Portugal and be qualified to employ people.
One of the big items in the application process will be the demonstration that your startup can either show a value of €325,000 within 3-years or show annual revenues of €500,000. This can be difficult for some startups but doable if you raised a seed round of investing or if your startup is beginning to show real revenue growth. So you have 3-years to make it work. Not that bad.
The Program will be regulated by a joint ordinance of the Ministry of Economy and the Ministry of Internal Affairs. So assume there will be lots of bureaucracy with the process. All official documents will be in Portuguese (that’s the law) but plenty of their websites have English translations. You can, of course, use Google Translate, but we’d recommend hiring a Portuguese lawyer who speaks English. The online Portugal visa application form is not live yet but, it’s coming in early 2018.
Do I need a Portugal Startup Visa?
If you are entrepreneur looking to create a startup in Portugal, hire people, and open a bank account; this is the fast track. With the Portugal Startup Visa, you get the eligibility to stay in Europe for more than 90 consecutive days (180-days annually) and get access to not only great talent but to a tax regime that is business friendly. On top of that, loan rates are quite low in Portugal (5% or less) so the ability to capitalize your business is there. The IMPMEI also has a tax benefit up to €3 million up until 2020. All in all, it’s a win-win situation.
It may make sense for a foreign startup to have a Portuguese subsidiary to pass-through European dollars or to move a very early stage startup here before moving your investor’s dollars into the EU. They have not released a special tax for startups but the standing tax rate is 21% but it is on a sliding scale.
If you decide this might be the right visa for you, connect with your accountant, immigration lawyer, and reach out to Startup Portugal.
I am a big fan of the people at Startup Portugal. They are all English speakers and are very helpful with the process of setting up your business in Portugal. Some of the perks I have learned about in the process are that you can hire developers and interns for free for a probationary period. There are funds for both joining an incubator called the Startup Incubator Voucher and helping build up an office. There are also relocation services and advice.
The information on this visa is just being released. As I learn more, I will update the piece so bookmark this article and comment below.