I was reading a thread on partner responsibility on www.expatforum.com the other day, and it occurred to me that ex-pats living in Portugal might have plans to start their own business here, or to move here from abroad for that effect. I know that many already have.
According to recent statistics, in Portugal, 16,258 companies were created in the first six months of 2010. However, 5,200 companies were dissolved during that same time period.
And the number of insolvencies in the first six months of 2010 reached 1,840, an increase of 2.5% compared to the same time last year. I'm sure you've seen the tell-tale signs, abandoned shop windows with declarations of insolvency taped to them, or decisions by the board of directors stating that they are planning to request insolvency, as below.
Insolvencies are, to say the least, a hassle. They invariably involve the Portuguese Revenue, Social Security, and all other creditors; banks and other financial institutions, former employees, suppliers, etc. And, of course, lawyers. They are a very timely process (though efforts are under way to speed up the process), and would really put a damper having moved to Portugal, what with consuming all of your investments.
I don't mean to be a nay-sayer, nor dissuade anyone from coming to Portugal to start up a business. I myself know of several ex-pats that managed to find success here. But like any big decision in life, remember to plan well, and inform yourself very well before stepping into the financial landmine that is the life of a start-up business owner in Portugal.
For more on the insolvency process in Portugal, I recommend visiting the "European Judicial Network in civil and commercial matters" website at http://ec.europa.eu/civiljustice/bankruptcy/bankruptcy_por_en.htm
I hope that this is the first and last time you see anything this in-depth on insolvency in Portugal...
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4 comments:
I couldn't agree with your advice more ... think carefully about taking the step.
We started our business a year ago and we really have grown in that one year but it takes dedication and hard work.
As we deal with businesses I think the thing that surprises me the most is that people fail to plan ... and you know what they say ... if you fail to plan you plan to fail.
However, one thing that most people don't realise is that you can start a very simple sole trader business in Portugal for less than 10Euros, the state allows you 12 months before paying social and you don't have to register for IVA until you do more than 10000Euros in 1 year (Jan-Dec).
This means you can start your business with little investment in bureacracy and gives you the option to test it all out first. Of course this does depend on the size of business you want to start and you should take tax advice first too.
I can only say that it is tough in a country where you don't speak the language but Portugal still has lots of opportunities for those prepared to work at them.
If you are considering moving to Portugal and intend to find work. Before you make the move, take into consideration salaries are significantly lower than those in other countries
Like some countries there is a minimum wage, however even after an increase in January 2008, this equates to 426€ per month. This rate applies to those aged over 20. Younger workers receive a fixed percentage of the minimum rate.
The minimum wage in Portugal, although considerably lower than that in other countries, is proportionate to the cost of living.
Business working hours do differ from other countries, in that typical working hours in Portugal run from 9am until 1pm with a two hour break for lunch, resuming at 3pm through until 7pm. The maximum legal working week in Portugal is 40 hours. Annual leave entitlement is 22 working days. There are also an obligatory 12 public holidays and two optional ones.
read more
http://www.gekkoportugal.com/employment%20in%20portugal.htm
Excellent advice John, that's a good tip for people wanting to experiment in Portugal.
And thanks as well Derek, your site should consulted by anyone thinking of moving to or investing in Portugal.
Unfortunately Portugal bureaucracy has a lot of ways to funnel off funds and create unnecessary delays. Caveat emptor applies not only to purchases, but also investments.
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