The Portugal office of the Sovereign Group is one of the leading tax advisory firms in Portugal. In addition to tax consultancy and fiscal representation services, our core business is setting up structures to assist with tax planning, succession issues, wealth management, foreign property ownership and cross-border business.
Sovereign – Consultoria Lda are proud members of the British-Portuguese Chamber of Commerce, the Portuguese Chamber of Commerce & Industry in the United Kingdom, the Spanish-Portuguese Chamber of Commerce and the Portuguese-Brazilian Chamber of Commerce.
We have a team of qualified accountants who can provide specialist tax advice and services to foreign individuals and companies with interests in Portugal, backed up by a strong administrative team.
Background: Portugal was a world power during the 15th and 16th centuries, but during the subsequent centuries lost much of this wealth and status. In the 20th century, following the turbulence of the colonial wars in Africa, there was a peaceful military coup in 1974 which resulted in broad democratic reforms in the country. Portugal became a member of the EU in 1986 and then qualified for the EMU in 1998, subsequently changing the currency from the escudo to the Euro. The current ruling party is the Portuguese centralist party (PSD).
Location: Portugal occupies the western part of the Iberian Peninsula and has boundaries with Spain to the North and East. The archipelagos of Azores and Madeira in the Atlantic Ocean are included in the Portuguese territory.
Economy – overview: Portugal’s economy was always based on traditional industries such as textiles, cork & wood products, paper manufacturing, porcelain & glass, wine and tourism, however in recent years modern industries have developed significantly.
Thanks especially to EU funding during the late 1990’s, infrastructure was greatly improved and Portugal has made considerable economic progress since its accession to the EU, due to foreign trade with EU members and the USA. However rampant public spending in latter years soared out of control necessitating the introduction of a number of austerity measures by the socialist government to reduce and control the budget deficit. This economic situation came to a head in 2011 with the resignation of the Prime Minister, the necessity to seek funding from the EU and the IMF and national parliamentary elections resulting in the centrist PSD Government of Pedro Passos Coelho being handed the poisoned chalice.
A moderate recovery of activity in 2014-2015 is now projected for the economy, after a cumulative contraction of around 6 per cent in the 2011-2013 period. The projections confirm the prospect of a gradual recovery of the Portuguese economy. From the end of 2013 and throughout the projection horizon, the economy is expected to record positive year-on-year rates of change of GDP. In 2014 and 2015, the economy’s growth will tend to approach the current projections for the euro area as a whole. These positive developments should be based on strong goods and services exports and the acceleration of domestic demand, in particular business investment.
Exports’ recent behaviour has shown Portuguese companies’ ability to find new markets, with an important contribution from companies formed over the last decade. However, a number of structural obstacles to economic growth will continue to limit the growth potential of the Portuguese economy in the near future. Key among them are the high indebtedness of several institutional sectors, the still relatively low level of qualifications in the labour force and the strong labour market segmentation, which causes long unemployment duration and a high rotation of certain worker groups.
Portugal is on Greenwich Mean Time (GMT).