Doing Business In Portugal
Portugal, along with the Azores and Madeira, is a market of over 10 million people. They use the Euro currency and are open to trade with any EU countries. The democratic government is stable. They welcome foreign investments and businesses. For American businesses, the exchange rate is very favorable. Most Portuguese believe that American products are high quality but overpriced. U.S. companies should work hard to be seen as having competitive prices in order to break into this market. In the next few years, major construction will give U.S. companies many opportunities to gain a foothold in the Portuguese market.
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Many people in Portugal speak English. While Portugal may be small, the number of Portuguese expatriates is large. Additionally, it is an excellent stepping-stone to begin sales in the rest of Western Europe. For companies to begin sales in Portugal, the first step is to contact the U.S. Export Assistance Centers (USEAC). They will provide help to firms interested in doing business abroad. They offer market research reports to help companies become familiar with the market. The fastest way to begin sales in Portugal is to find a local partner. The USEAC can help firms find contacts overseas.
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Selling products in Portugal is not without challenges. Since 2005, Portugal has been trying to strengthen its economy. Their budgets are becoming tighter. The Value Added Tax (VAT) is one of the highest in Europe at 20%. American firms trying to do business in Portugal will find strong competition from European companies. These companies have the advantage of being familiar with European culture. Furthermore, they do not have to pay import tariffs. Recently, United States companies are also starting to find more competition from Chinese companies.
Portuguese Language Popularity
Portuguese is the sixth most commonly used language in the world. It has strong ties with dozens of former colonies. This makes having a foothold in Portugal far more important than it would initially seem.
While they are in the middle of a recession, the government is planning large projects to boost the economy. These will provide many chances foreign companies to trade with Portugal. The government is also trying to attract tourists and specialized skilled workers to their country.
The top ranking American exports in 2007 included machines, medical equipment, items made from wood and grains. These numbers do not include items sold to other EU countries and resold in Portugal. This is often done in order to save money on import taxes. Portugal wishes to strengthen its economy and become a key player in the European economy. This will offer American companies opportunities for growth.
Watch out when choosing which version of Portuguese to pick: the Brazilian or the European. While European Portuguese will be the right choice for Portugal and formed African colonies, to enter the Brazilian market the best choice will be the Brazilian Portuguese variety.
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