nearshoring in portugal
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Is Nearshore to Portugal the Best Option?

Usually, when nearshore outsourcing examples come up, Portugal and its specialists are not among them. It has a lot to do with a major financial crisis that took place in 2008 and caused a lot of troubles to Portugal’s economy state. However, for the last couple of years, this country’s popularity in the IT world grew up rapidly. What draws major companies like Mercedes-Benz, Cisco or Microsoft to Portugal and its outsourcing services? Let’s find out.

Nearshoring Portugal: How Popular It Is These Days?

Portugal has always been rich for talents and IT industry is not the exception in this case. According to Gartner Portugal made it to the list of the most desirable locations for outsourcing and nearshoring in particular. However, why all of a sudden this strike of popularity for Portugal? The 2008 and a few of the following years have been rather hard for this country, nevertheless, its government managed to not only lead it out of the crisis but also make it a center of the European outsourcing community.

These days Portugal is so appealing for investors because of its financial incentives, such as support of the startups, cheap rent for the offices and many more. However, what about the exact reasons for nearshoring in Portugal?

Nearshore: Portugal and Its Benefits

There is hardly any other country that would be such a perfect place for nearshore outsourcing as is Portugal. Over the years, lots of worldwide known companies transferred some part of their offices to Lisbon. What made them do so? Well, there are several reasons for that:

nearshoring portugal benefits

  • Cheap rent. Big investors from Europe come to Portugal in hopes to reduce their expenses and receive the product that would be just of as great quality, as if the production center was at their homeland. The first thing they can save their money from is the rent. Because of the recent financial crisis, the supply on the real estate market is now much higher than demand. So finding an office for an outsourcing team is very cheap and easy.
  • Transparent laws. Portugal is known for its transparent law system. There is no bribery or bureaucracy in this country, most permits and necessary papers one can even receive online. That is why services of nearshoring, Portugal has to offer, are in such high demand – no one wants to worry about documentation anymore.
  • Low rates. Nearshore Portugal services are incredibly low in price due to the high competition on the Portuguese job market. An average salary or a Portuguese software developer is around $2400, which is considerably lower than, for example, salaries of US developers. More than just that, all specialists from this country have to compete against each other to get a job, which affects their rates’ size a lot.
  • Convenient location. Services of nearshoring, Portugal has to offer are among the most convenient ones due to this country’s superb location. Being in the very heart of Europe, it is perfect for nearshoring for any other European country. This also implies the minimized amount of cultural and language difficulties. If the first ones can be neglected, the latter might become a serious obstacle in the IT industry where things often revolve around profile terminology.
  • Online registration. Portugal is one of those countries, the government of which finally realized, that online business registration might attract many new investors. And they could not be more right about it. These days an online registration of a new company takes just three days! Obviously, that is good news to those, who decided to try nearshore Portugal services.
  • Low taxes. Nearshoring in recruitment is supposed to lower company’s expenses and with Portugal’s low taxes services of nearshoring Lisbon and the rest of the country are willing to offer, become even more appealing. Moreover, for those, who are only starting out with their business in Portugal, there are no taxes at all during their first year.

Nearshoring Examples: Which Companies Outsource to Portugal?

For the last couple of years, a tremendous amount of companies moved their facilities to Portugal or at least opened their second office there. One of the greatest nearshoring examples, in this case, will be a London-based company called Second Home, that decided to open their another, bigger location in Lisbon in 2019. Their biggest hope is to start catering to local companies, therefore improving the situation on the Portuguese job market.

Another great nearshore example of outsourcing in Portugal would be a company called Factory that provides office spaces for other companies all around the world. As has already been stated, Portugal’s cheap rent makes it a perfect place for nearshoring examples like Factory’s.

Other examples of nearshoring companies in Portugal could also be such well-known brands as Mercedes-Benz or Volkswagen. Just as other nearshoring companies examples, they quickly realized, that outsourcing to Portugal is a great way to give their business a boost.

Nearshoring in Portugal: Why Is It Your Best Option Nowadays?

Outsourcing in general and nearshoring in particular became a true savior for the Portuguese economy. Basically, the country went from one of the poorest in Europe to one of the most promising in terms of the financial state. Hundreds of investors are now relocating their facilities there, as this move will allow them to make their lives so much easier.

Portugal’s government made truly appealing conditions to businesses that want to outsource some of their jobs. With lowered taxes (or no taxes at all!) cheap real estate renting prices, great talent pool and more than just amazing location Portugal quickly became heaven on Earth for IT industry.

It could be said, that Portugal and the IT industry are now having quite a fruitful relationship. The Portuguese economy is thriving because of all the investments and the rest of the world finally has a great place for outsourcing. Hopefully, with time, this country will become even more popular with investors and company owners and eventually will turn into the very center of the world IT community.

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Angelika is a Blogger and Content Marketer passionate about the topics covering IT resources optimization, building R&D centers in Eastern Europe and outsourcing.