How Expat Founders Can Leverage Networking Opportunities to Successfully Start a Business in Portugal

Introduction

For founders, optimizing their lifestyle means finding a location that allows for convenient living and, just as important, a high probability of achieving their next great success. Until recently, Portugal wasn’t seen as a startup hub. But that’s changed, and a confluence of favorable, new conditions now has the Portuguese economy looking like a pretty good bet for startup growth. Inflation has been low since 2016. Labor is relatively inexpensive. And through the Web Summit, the Portuguese government basically enrolls thousands of influential people from more than 50 countries in what amounts to a Founders Academy in Lisbon.

The Growth of Startups in Portugal

Startups are sprouting up all over Portugal, with plenty of successful stories among them. According to 2023 figures, over 4,073 startups are registered in the country. Collectively, they are projected to generate around €2.3 billion in annual revenue. They employ about 25,000 people, at least 70 percent of which have hopped on board in the last five years. At this rate, the current youthful population of the sector alone renders the startup scene a feednotera into which new companies can easily access a vibrant local economy that is probably the service-providing equivalent of "brilliant, educated, and tech-savvy" and likely to yield the development of the next big hit in any market that isn't confined to Portugal.

Impact on Entrepreneurship and Economy

By far, the most significant segment of foreign entrepreneurship in Portugal comes from the Golden Visa program, which has substantially diversified and deepened the landscape of entrepreneurship in the country. Golden Visa holders are required to invest €500,000 in a Portuguese real estate asset or a fund that invests in real estate, among various other investment options. Since the inception of the program in 2012, it has attracted close to €7 billion in direct investments. To top it off, Golden Visa holders now represent an entirely new avenue for Portuguese nationals to network within the increasingly internationalized startup environment. They work in co-working spaces. They attend startup community events. And clearly, Golden Visa holders can only help the "Portuguese startup economy."

Expat Founders in Portugal Have Ample Opportunity to Network

Expat founders in Portugal have many ways to network. These events allow them to connect with potential future investors, as well as with other entrepreneurs. They lead naturally to the formation of relationships that go beyond the event itself. One of the biggest and best events for networking, or at least for getting known, is the Web Summit. It is one of the largest tech events in the world, and entrepreneurs and investors from all over the globe come to Lisbon (or link up virtually) for it. For many expat founders in Portugal, this is their first big chance to make an international connection in their host country. It also happens to be an easy win for the people attending, as making friends and connections with the other 70,000+ people present is on par with attending a concert in the key of "networking."

Grasping the Local Business Ethos

For expatriate founders, it is essential to appreciate the unique business ethos of Portugal. Here are some basic tenets of that ethos to keep in mind:

Trust and respect are the real keys to local business. They are not easily won or lost, but you win them by doing what locals do to make local friends—getting to know the right people, spending time with them, and engaging in not-so-small talk, before you ever think about bringing up business. Punctuality matters. If you don’t respect yer amigos enough to show up when you said you would, don’t expect them to respect you. And dress like you care about the meeting. They may wear shorts and flip-flops to the beach, but your local friends will see you in a suit.

Expat Founders' Success Stories

Kaitlin Wichmann relocated in 2022 from Kansas City to the Lisbon area, as founder of digital marketing agency. From her first days in Portugal, she recognized that success lies in networking. She did this at the Lisbon Founders Club ↗ and found that connecting with other ex-pats (some of whom were also at the Club) helped her understand what makes Lisbon and its local market tick, thereby assisting her in the formation of a local client base. On top of that, she learned that Portugal is a near-ideal place to establish a work-life balance, which is a nice change from her previous life in the Midwest. David McNeill started Expat Empire with a similar premise—that networking is key. After relocating to Porto, he also went to events where founders and investors gather and, through that process, found that he could "network his way to victory" (victory being not just making casual connections but actually starting a business). Both of these networks—and how they were formed—are good stories to tell because they involve inspiring people. Additionally, they illustrate nicely how having a (business) network in place can be a powerful driver of prosperity.

Complying With Legal Start-Up Requirements in Portugal

To commence any business activity, a plethora of legal requirements must be fulfilled. The first step for entrepreneurs wishing to establish a company in Portugal is to choose a legal structure for the venture they want to undertake. The most common structures are either sole proprietorships or limited liability companies (LLCs). Taxwise, the two structures are quite similar for most small business situations. As for registration, each path is navigated with fairly different steps. When you've chosen a structure, you also need to choose a name for your company. The name must be unique. To register it, you have to submit a series of forms and documents to the proper Ministry. After that, you need to procure a tax number, register for social security, and set up any number of other seemingly small but actually quite vital pieces of the business infrastructure puzzle. Both the legal and the tax registration processes are fairly straightforward.

Connecting with the Local Community

It can be easy for expatriate founders to engage with their local Portuguese community when they follow a few basic guidelines. Attend as many networking events as you can: Local meetings and conferences are good opportunities to meet people in your immediate vicinity. Events like last year's Web Summit are ideal for touching base with fellow entrepreneurs. Become a member of professional organizations: Associations like the Founders Club in Lisbon can offer priceless entrepreneurial insight. Use social media: LinkedIn is an underrated platform for in-town entrepreneurs. Its groups are great opportunities for forming consortiums, like the one we do today with our Lisbon office, wherein we share experiences and seek advice from our fellow professionals. Hitch your wagon to the expat community: Other expatriates can often give you stories and advice similar to that which you'd receive from them in the States. And when you get to be friends with them, you'll find that they probably don't complain as much. It's a pretty solid existence once you settle in.

The Conclusion

To sum it up: if you're an expatriate entrepreneur in Portugal, you must make a real effort to connect with your local community, both socially and in business. The best way to do that is to network. There are numerous events around town that cater to entrepreneurs, both Portuguese and foreign, where you can get a chance to mingle and meet new people. Finding a nest in the right community of entrepreneurs is also important, and there are some good options in Lisbon. Most notably, there's the Lisbon Founders Club, which is for "friends of friends" types of founders, and the Founders Institute and another aspiring organization for first-time founders, which do not require a "friend of a friend" to join.