Doing business in Portugal

Key industries

Wine production

Portugal is the 11^th largest wine producer in the world and is home to the Douro region which is the oldest wine producing region in the world. It is probably most famous for Porto wine, which is made exclusively in the Douro region although there are over 500 varieties of grape in Portugal. In 2015, a total of 6,205,756 hectolitres of wine were produced,  45% of which was exported.

Cork production

Produced throughout Portugal although predominantly in the Algarve and Alentejo region, cork is a major contributor to the Portuguese economy. Over half of the world’s cork supply is produced in Portugal and is exported to over 100 countries to be used for wine stoppers and in the textile and construction industries. As it stands, cork production is sustainable as legislation prevents producers from being able to strip trees for cork more than once every 9 years.

Automotive

The automotive industry employs approximately 124, 000 people in Portugal and accounts for 5% of the country’s GDP. There are currently 265 car manufacturing factories across Portugal and in 2017, a total of 175,000 cars were manufactured. The annual value of exported cars and car parts is approximately $1.96 billion. Some car brands which are currently being manufactured in Portugal include Toyota, Volkswagen and Citroën.

Textiles

Portugal has one of the biggest textile industries in Europe and is known for its high standard of manufacturing. This industry is responsible for 130,000 jobs and the turnover in 2018 was 7.6 billion euros. Textiles such as clothes and linen are mainly exported to Spain, France, Italy, Germany and the UK and in 2018, exports within this industry were worth 5.3 billion euros.

Approach to business (things to keep in mind)

• Portuguese business is relationship-orientated therefore you should try to get to know your business associates as much as possible. You will be more likely to negotiate a deal if you have a long-standing relationship with the company and the individual so get to know your associates inside and outside of work.
• Meetings may last for a long time and they may not follow a specific timetable or agenda.
• Criticism is not generally appreciated in Portuguese culture therefore, in terms of establishing a deal, it may take some time to find out exactly what your associates are thinking.
• The management style in Portugal tends to be hierarchical therefore supervisors and managers are authoritative and command a lot of power and respect. In return though, they are generally very considerate and respectful towards their staff members.
• Due to the management style, decisions will often be made by the person who occupies the highest status within the company. It will probably take a while for a decision to be made as Portuguese business people tend to be very thorough and meticulous when negotiating a deal.
• Long lunches are quite a typical part of the working day in Portugal. If invited to lunch, you should establish if it is a social gathering or a business meeting in advance.
• Written contracts do not always hold the same importance as they do in other countries. Trust built on a long-standing relationship may be considered to be more important.

Dos and Don’ts in a business meeting

Do…

• …bring handouts to a meeting if you are delivering a presentation as written documentation is common in meetings in Portugal. Although a lot of people will be proficient in English, you should also have your handouts translated.
• …accept an invitation to dinner. This will be a good opportunity to get to know your colleagues in Portugal and start building those important relationships. Business will probably not be discussed, so don’t bring it up unless your associates do so first.
• …be prepared for small talk at the beginning of meetings. It is likely that you will engage in a brief informal discussion before the meeting starts.
• …wear smart, conservative clothing. Business dress remains quite formal in Portugal and clothes of good quality will be appreciated.

Don’t…

• …write anything in red ink as this is considered to be offensive.
• …be surprised if you do not receive all of the information that you expect to in the first meeting. This may be a negotiation tactic and you may need to explicitly ask if there is specific information that you require.
• …be offended if people arrive late to a meeting. Whilst you should be on time, punctuality is not as important in Portugal as it in some other European companies. In fact, if visiting someone’s home, it is polite to arrive a few minutes late.
• …be too pushy or try to rush a deal. If you are seen to be too aggressive, you will lose credibility. Do not expect a decision to be made at the end of a meeting either, the senior staff member who is making the decision may want to have long discussions before reaching a conclusion.

Key company facts

Jerónimo Martins

A Lisbon based food distribution and specialised retail company operating in Portugal, Poland and Columbia. It also owns Portuguese supermarket chains Pingo Doce and Recheio.

• Turnover in 2018: € 17,337 million
• Number of employees: 108,560

Corticeira Amorim

This is the largest cork-producing company in the world and has been operating in the industry since 1870.

• Turnover in 2018 : €763 million
• Number of employees : 4,200

AutoEuropa (Volkswagen)

Owned by Volkswagen and based in Palmela, Portugal, AutoEuropa is a car and car-part assembly plant. In 2018, it manufactured a total of 223,200 vehicles.

• Turnover in 2017 (Volkswagen): €230.7 billion
• Number of employees (AutoEuropa) : 5,804

Petratex

This is a Portuguese sports clothing and textiles company which holds patents for innovative, no-sew technology which uses glue rather than sewing to ensure that seams are 100% bonded.

• Annual turnover: Over €70 milllion
• Number of employees: Approx. 1,000