4 reasons why you should expand your business to Portugal with an Employer of Record (EOR)

Fotografia de Marina Pinho
Written by

Marina Pinho

Communication Manager

If your company is looking to grow internationally and you don’t want to take any risks in this unstable market, you may want to consider working with an Employer of Record (EOR), since they can help you avoid dealing with the different challenges that can arise when it comes to managing HR and payroll processes in a foreign country. But, they can be even more helpful if they also provide a quality recruitment service, since they are more knowledgeable about the job market and the good candidates of their country. Now, an important part of this is that you choose a country with great education and professionals with relevant experience, so they can start working on your projects immediately and help your business grow. But how can you do that? 

Keep reading to find out what are the responsibilities of an EOR, how they can help you grow and why Portugal is a great place to look for them. 

What should you expect from an Employer of Record (EOR)? 

An Employer of Record is a third-party entity that serves as the legal employer of your remote workers in a foreign country. 

Imagine this: you have a project that you need to finish as soon as possible, but you also need some extra help in your team to be able to finish it on time. Or maybe you want to start focusing your energy in expanding to a different business area, but you simply don’t have time. 

You can start to look for candidates in your country, but, in IT, what we’ve seen in recent years is a lack of experienced and available candidates ready to start a new project and with the necessary energy. So you start looking for candidates from other countries that are skilled, have a great resume, are looking for an international experience and usually have a lower reference regarding salary. For you and the candidate it seems like a win-win situation, until you face the legal, HR and payroll tasks that you need to deal with.

And it’s here that an EOR can be of great help. 

The EOR takes care of all HR and payroll management tasks, including recruitment, onboarding, benefits administration, offboarding, and tax compliance so you can avoid the legal and administrative complexities of setting up a local entity in a foreign country, which can be time-consuming and expensive. It helps you cut costs and be able to access a bigger talent pool in a fast and easy way. 

dellent benefits of an eor

Although not all EOR’s do this, some of them can also help you find the candidates offering a much more comprehensive support. Having access to this service (which we do free of charge, for example) is an even bigger advantage for companies looking to grow, since the EOR has a better knowledge about the job market of their own country and usually has partnerships with universities of reference.

This way, you’ll have an experienced company with deep knowledge of your business area and of the talent pool available on the country (and usually with connections to top universities), looking for the candidates you need, without you having to invest anything upfront. 

Besides that, a good EOR will also help you understand and ease into a different culture, which can also be an obstacle since each country has their own set of values regarding work and business. And this is why, you also need to be careful when choosing your country of reference to make sure that not only the timezone is adjusted to your needs, but also the working culture is aligned with yours.  


Why is Portugal a good place to grow internationally? 

As we’ve seen, finding great IT professionals it’s getting harder. Some aren’t available, don’t have the necessary experience, the right soft skills or you simply can’t meet their expectations. That’s why companies that keep looking to expand and want to solve this issue look towards some European countries for skilled IT workers that have attractive labor costs and are not only geographical but also culturally close. This becomes possible due to globalization, similar time zones, and easier travel access and communications between countries.

That’s why Portugal arises as one of the top destinations for companies to locate their services. 

Business-friendly environment: Portugal is known for its pro-business environment, with a stable political and economic climate, making it an attractive location for foreign investment. It scores high in the Human Development Index and is considered an easy country to do business in. Besides that, it’s also one of the most peaceful countries in the world next to Iceland, New Zealand, Denmark and Slovenia. 

dellent coimbra portugal eor

Highly skilled IT professionals: The Portuguese labor market is very skilled, with a strong pool of IT talent. According to the Global Skills Report from 2021, Portugal demonstrates to have particular strength in Software Engineering, Computer Networking, Cloud Computing, Operating Systems, among others in the technology department. It also performs well in the Data Science and Business topics. This can be linked to the strong educational system, with different universities achieving top positions in world rankings, that produces a large number of graduates in science, technology, engineering and mathematics. The country has also implemented several initiatives to attract and retain skilled workers, including visa programs for foreign workers, the most recent one being the digital nomad visa

Experience with EU regulations: Portugal is a member of the European Union (EU), so its EORs have experience working with companies across Europe and can help you navigate the complexities of its regulations, including topics such as labor laws, tax regulations and data privacy laws. This is very helpful if your company operates outside of the EU, since it means you won’t face any issues with compliance with all relevant regulations. 

dellent portugal lisboa eor

Cost-effective process: Portuguese EORs offer a cost-effective alternative to setting up a local entity in a foreign country. Building a local entity can be a lengthy and expensive process that involves legal fees, administrative costs, and compliance requirements. But if you choose to work with an employer of record, you’ll be able to immediately access a skilled workforce and benefit from the help and the expertise of the EOR, without the need to establish a physical presence in the country. Besides that, Portugal offers a lower cost of living when compared to other Western European countries, which translates into cost savings for your company, without lacking in the quality of the work produced. 

So, should you work with an EOR in Portugal? 

Using an EOR to hire remote workers internationally can be a smart strategy for companies looking to expand their workforce while reducing costs and administrative burdens. By working with an EOR from Portugal you can also take advantage of the country’s business-friendly environment and expertise in international hiring. 

But at the end of the day, only you can tell if this is a good option or not for your business. If you still have some questions, we’re here to help you figure out if this is a good choice or not and, if Portugal is on your radar, we can also be your partner in this expansion.

We provide not only HR management and payroll services, that include employment contracts, benefits, taxes and compliance with local labor laws, but also a comprehensive approach that includes talent acquisition services and all the support your company might need.