Boosted by the annual Web Summit tech conference which Lisbon first hosted in 2016, the Portuguese capital has steadily been gaining a reputation as a great place to do and start a business.

As the Portuguese capital gears up for its third Web Summit conference in November this year, which is forecasted to bring in 30,000 more participants compared to 2017, Reuters recently reported that Europe’s largest tech event will stay in Lisbon for another ten years.

Portugal will be placed at “the heart of the global conversation about tech and innovation,” cofounder of Web Summit, Paddy Cosgrave, told journalists at a press conference. To expand the venue, Web Summit will be getting funding of €11 million a year from the Portuguese government.

With aspirations of becoming a global tech hub, Portugal has arguably left the effects of the eurozone financial crisis behind. The introduction of a new government in 2015 ushered in a period of newfound stability and economic progress. Lisbon was moreover the first city to be elected as European Capital of Entrepreneurship in 2015.

A 2017 report by the Startup Europe Partnership (SEP) Monitor, which looks in-depth at the Portuguese startup ecosystem, revealed that the country’s scaleup ecosystem is growing twice as fast as the European average. The SEP Monitor also found that in Lisbon in 2015, 40 startups had scaled up and raised €160 million in venture capital.

While Lisbon has 270 days of annual sunshine, a mix of World Heritage attractions, buzzing shopping hubs and quaint streets, it’s Portugal’s world-class startups, incubators and programs that are largely contributing to the country’s growth.

But it’s not all been plain sailing. A Startup Manifesto compiled by local startup expert Beta-i cites that Lisbon has limited local investment capital. Beta-i has also called for lighter admin for startups and English as a mandatory language in everything foreigner-related.

Another deterrent is the lack of available housing and rising rent prices that has proved to provide a significant challenge for newcomers and, more catastrophically, has forced many Lisbon locals to leave their homes. If these clouds blew away, Lisbon’s future would look even brighter.

Before you pack your bags and sunscreen make a beeline for the Portuguese capital, it goes without saying that you should do your research. As soon as you arrive, you should register with Iniciativa Lisboa as a resident.

When it comes to visas, the kind you can apply for depends on your own country’s agreement with Portugal and the type of business you’ll be setting up. It might be best not to turn up on a tourist visa and try to wing it, as you may have a less friendly relationship with the tax office further down the line.

If you’re an EU or European Economic Area citizen, you’re in luck. Since the country is part of the Schengen agreement, you can freely live and work in Lisbon. The same applies if one of your family members is a Portuguese national. If this doesn’t apply to you, you will need to apply for a long-stay visa for a temporary stay, or residence from the Portuguese embassy in the country where you reside.

There’s also an attractive ‘golden’ visa permit program which shows that the government is dedicated to attracting foreign investment and boosting Portugal’s economy. Known as the ‘Resident Permit for Investment,’ this program allows you to live and work in Portugal and can also lead to citizenship. To qualify you must buy a house worth €500,000 or more, create ten or more jobs, or transfer capital worth at least €1 million (amongst other options).

You don’t actually have to be resident in Portugal for more than a week or two a year to qualify, but the investment needs to be there for five years. After this time you and your family members can be naturalized.

Unlike in other countries such as the USA, it is possible to get an entrepreneur’s visa if you live outside of Europe. Check with the SEF immigration and borders service and your own country’s embassy.

Now that you’ve sorted yourself out in terms of your work visa, it’s time to open a bank account. Since all your utility bills and taxes will be paid automatically from your local account, it’s recommended that you open one quickly.

Banks typically open early (between 8:30am and 3pm, Monday to Friday). You will have to bring your identity card, tax number, residency card and proof of residence to fill in various forms.

If you want to open an account from abroad, you’ll need to mail the application with a reference from your current bank, and put in around €250.

While all banks have an obligation to ensure you understand the financial processes you are undertaking with them, it’s important to know that a lot of banking material is in Portuguese.

There’s also one unusually strict banking rule to be aware of: if you write a check from a Portuguese bank without enough funds, you will be charged with fraud, fined 20 percent of the check’s value and be blacklisted and banned from opening another bank account.

Although the city is full of Multibanco ATM machines, it’s a good idea to have cash to pay for small things like bus fares and lunch. Note too that it’s possible to draw cash from a foreign bank account across the country.

The first thing on your list when seeking to set up a business here is to obtain a fiscal number (NIF). If you are an EU citizen, you will need to present proof of ID and a permanent address, which can be done quite simply via a virtual office provider.

For those who don’t yet have a permanent Portuguese address or aren’t an EU citizen, you will need to recruit a fiscal representative to act on your behalf. It’s important to note that all non-Portuguese documents must be translated and legalized.

With your NIF number, you can set up your business with the On-the-Spot Firm (Empresa Na Hora) scheme, allowing you to start your firm at a single office. Find details on how to set up using Empresa Na Hora here. If you're an EU citizen, you can also set up online using Portal da Empresa, here.

For more complex company needs or a larger budget, you can appoint a notary. It’s recommended that every company nominates an accountant, and there’s a list of government-approved ones available. If in doubt, the free Invest Lisboa government service is always happy to help.

Creating a business costs around €250 and you only need €1 or more in capital and all shareholders need NIF numbers.

As an EU citizen, it is easy to obtain health insurance. Portugal has a national health system, and if you are the owner of a free European Health Insurance Card (which you can request as a member of another EU country), you are fully covered under reciprocal agreements. Otherwise, you will need to source your own health insurance.

Some jobs offer health insurance alongside employment, and by setting up a company, you can access cheaper rates for yourself. Investors normally insist that you have life insurance, and if you (like many Lisbonites) drive a vehicle, you will need proper coverage. Some credit cards and bank accounts offer free, or at least cheaper, types of insurance; it’s worth investigating these money-saving options.

Portugal’s tax offering is ‘Europe’s best kept secret,’ according to Global accountancy firm PwC.  

With the introduction of incentives nine years ago, a flat income tax rate of 20 percent and ten years of tax-free pension payments, Bloomberg reported in April that Portugal has been luring in rich pensioners with tax breaks.

As well as offering double taxation relief if you’re unfortunate enough to be paying tax in other countries, Portugal has a fantastic 2020 scheme awarding extra incentives to larger projects (with a minimum investment of €3 million) on a case-by-case basis.

Another scheme allows companies to deduct 150 percent of costs related to creating jobs for people up to 35 and the long-term unemployed, while capital gains in Portuguese companies held by non-resident firms are largely exempt.

Concerning personal tax, the rate for ‘non-habitual residents in Portugal’ is a flat 20 percent for employment, business and professional income for ten years. Normal citizens pay from 14 percent to 48 percent of income, depending on salary.

To register as a taxpayer, you will need to fill out a registration form (ficha de inscricão) and take it to your local tax office. With penalties ranging from €200 to €2,500 for non-compliance, and rules surrounding companies that are far from transparent, you’ll definitely be needing that accountant.

Filling out the necessary paperwork upon arriving in Lisbon is a hefty job, but now that you’re out on the other side, we should introduce you to the locals.

With a population of over half a million people, nearly 10 percent of Lisbon’s inhabitants comprise of non-nationals. According to the Council of Europe, the city’s largest minority groups are Brazilians, people from Cape Verde and the Chinese. Foreign entrepreneurs have been increasingly trickling in to take advantage of cheap office spaces.

Lisbon also has a residual, old-fashioned business culture. People are polite, well dressed and adept at forming orderly queues for their morning espresso (bica) at the train station.

To the Portuguese, punctuality isn’t necessarily a good thing. Don’t be surprised if people feel like you’re intruding if you arrive on time or even early. Note too that northern European directness may not go down well.

To match its lilting and long-winded tongue, Portugal has a rather relaxed way of life. In August, the country empties as both businesses and residents flee the country on their holidays. Banks shut at 3pm and most shops remain closed on a Sunday. Portugal’s parliament even legalized cannabis-based medicines in June, following the decriminalization of all drugs in the country in 2001.

The Portuguese are also known to be particularly family-orientated. A lot of importance is placed around mealtimes, where family members no matter how young or old are expected to attend. Clearly unphased by their early morning starts, the Portuguese typically dine late, sometimes until two in the morning. At any family gathering, you can bet the drinks will be flowing.

The tourism sector is also booming in Lisbon, with tourists streaming off cruise ships to sample the bars and restaurants that pulse with life. Visitors to Portugal rose nearly 12 percent last year to a record 12.7 million people. Feeding into a recently-bolstered economy, tourism accounts for about 10 percent of Portugal’s gross domestic product and supplies many jobs to local people.

In Lisbon, you can afford to push the boat out a little financially. While wages aren’t particularly high, prices are relatively low. This is a place where cheap eats and drinks can be had and travel costs are far from pricey. Unlike some other European countries, a monthly income of €1,100 can go a long way.

According to payscale.com, the average annual salary in Lisbon is just over $21,000. Sound alarmingly low? With competitively cheap rates on goods from supermarkets and desirably low public transport prices (a thirty day pass costs €40), you can afford to eat, drink and be merry without having to dig too deep into your pockets.

While the average lunchtime meal including a drink costs around €10 in the business district, a three course meal for two at an Italian restaurant can cost under €50. A glass of wine in many restaurants costs around €4, while a bottle of red can cost an affordable €6. Portugal is a wine-producing country, after all, and the local offerings are abundant and inexpensive.

For cheaper, locally sourced goods, you can head to one of Lisbon’s more traditional markets, such as Mercado da Ribeira. With its large oriental dome and vibrant produce, the market stands out as a place where you can buy fresh fruits, vegetables and fish for affordable prices – and grab a quick bite at one of the food stalls while you’re at it.

Accommodation, the single largest item on anyone’s budget, is unfortunately bordering on the more expensive side, especially with the price tag on properties rising by the day.

While the government has done its utmost to attract foreigners to Lisbon, some locals think this has only served to exacerbate the current housing issue. Finding an available flat in the capital is a significant challenge for newcomers and locals alike; many locals have been forced to move out of their homes.

The monthly rent for a 45 m2 furnished apartment in Lisbon costs an average of €593, statistics from cost of living index Expatistan from November 2018 show, with average utility bills (electricity, heating and gas) costing around €80 per person.

Main photo: Unsplash/Jason Briscoe

*This article was originally published on October 17th, 2018 and updated on February 11th, 2019.