It could be much better if the tax system was sane.
Let's say you want to do some freelance work for someone.
In Portugal you have to register your service ("abrir actividade") and use an oficial invoice booklet provided by the government ("recibos verdes") to invoice your customers.
You need to pay a substantial amount of social security and income tax ( a designer friend was making around €1000 a month and paying almost €500 per month in taxes ), and if you stop trading and forget to tell the government, even if you have zero income you need to pay the minimum social security ( around €60 per month ) just to be registered as a service provider.
Basically, you are taxed pre-emptively wether you make any money or not.
This stops a lot people from even trying to sell their services as freelancers, let alone start a company ( can't imagine the tax labyrinth that must be ).
Sometimes I want to hire a friend for a small gig and they refuse because they can't afford the social security bill incurred in being a registered service provider.
This is killing the formal economy, stifling entrepreneurship, and it's also driving more and more people to informal contracts with cash transactions that deprive the state of needed income.
I won't even talk about the crazy income tax band system we have...
This sounds similar to Spain. I would like try out a few (small scale) business ideas, but the taxation system means that I will have to be fairly sure of a profit before I can start working, otherwise it could be a lot of wasted money just to see if things work or not.
(Just a short note on an irksome phrase in that piece:)
"This is because in Portugal owning your own house or apartment has always been such a matter of pride that it is the first choice of most people, even young adults."
That's if "always" means "as far as I can remember", written by a fairly young writer. Fifty years ago renting was the most common mechanism in Portuguese cities, until rent-control (first instituted before 1970's inflation) nearly killed it, and state-subsidized bank mortgages became the norm. Unsurprisingly, forty years of that contributed to the economy crash.
In times of economic downturn there is always an uptick in newly minted entrepreneurs. Some of them will make it, most of them will not and will be re-employed in at most a few years. Think of them as the unemployed that refuse to give up, and that alone makes them worth watching, they're fighters, but that doesn't change the stats too much in their favour. Something similar is happening in Spain.
When a bunch of people have nothing to lose they can do impressive things. In this case, nothing to lose means that they don't have good employment prospects not because of personal failings but rather macroeconomic or structural problems. When there's little to no opportunity cost to trying to start your own business it shouldn't be surprising that so many do try.
There's a flip side to that coin, which is that there are a lot of "incubators" set up to purportedly support Portuguese startups that have delivered (statistically) zero successes - there are exceptions, but as far as I know they're not portrayed in TFA.
Regardless, it bears noting that there are more, standalone, bona fide startups out here trying to make it, and fortunately not all of them are relying on the app bubble keeping up.
UPTEC last year accepted 165 new start-ups and 22 managed to gain independence and become self-sustained. A success rate of 13% in the start-up world is not that bad...
Realmente hoje em dia tenho muito pouca idea de como as coisas estejam, mas admira-me que a malta toda (que possa fazer apps) não-se tenha despachado prá Alemanha e a Inglaterra.
I think you'd be surprised at how many people in the UK and Germany are (quite seriously) looking over to Lisboa as a place to go and work. The startup bubble that appears to be happening over there combined with the food, weather and culture is very attractive.
I visit Lisboa 2-3 times a year and every time I go back, it seems more vibrant, more buzzing with energy.
Some of us like the sunshine and actually come back to Portugal. Besides, if someone is able to build apps, as you put it, why would you go to Germany or England? You'll be selling them online for the same price and enjoying Portugal's relatively low cost of living.
My comment was perhaps more caustic than intended; I go back twice a year and so I only get to see 6-month snapshots of increasing misery, and I didn't want to make anyone feel bad for sticking around.
If you write something in another language (and it is not a right thing to do in a international board that obviously use English as only language) at least translate it to make others understand.
And after 738 days we still haven't learned a thing. A large number of my friends and acquaintances in the "tech business" have already left or are planing to do so...
I don't really understand this sentiment. I'm clearly targeting fellow portuguese speakers on a low traffic thread. It feels… weird to be policed for my choice of language.
It's rude to all non Portuguese speakers not to conform to the official language here - English. if you want to address the Portuguese community here, just say your comment in English, and add "By the way, I am from Portugal as well, feel free to contact me." or whatever.
Well, I'm a fellow portuguese speaker and it felt weird as heck, but then again this is HN, and it's been weeks since I read or wrote anything but English :)
Ora, precisamente porque tirei a oportunidade de desenferrujar a escrita. Vê-lá tu, para mim fazem anos e anos desde que escreva em português :P.
Regresso com frequência (tenho que marcar viagem mas em princípio daqui a duas semanas…), mas como emigramos enquanto eu era catraio não tenho network nenhum e é-me difícil ficar acompanhado com as notícias.
I wonder what the social safety net is like in Portugal. It looks like they have national health service, so maybe dealing with employee health insurance is one worry their entrepreneurs would lack.
Public health services are sub-par, if you want the best standard of care you'll need to go private. Ironically, government workers qualify for a special health insurance, which allows them to use most private hospitals.
Also, part of your salary goes into paying social welfare, and the employer pays some of it as well (about 11% from the employee and 22% from the employer). No idea how that compares to the US.
That's correct, although most bigger companies do offer a health insurance (mostly to avoid waiting lists in the public health providers). In any case, private health insurance in portugal only costs a few dozen euros per month.
Let's say you want to do some freelance work for someone. In Portugal you have to register your service ("abrir actividade") and use an oficial invoice booklet provided by the government ("recibos verdes") to invoice your customers. You need to pay a substantial amount of social security and income tax ( a designer friend was making around €1000 a month and paying almost €500 per month in taxes ), and if you stop trading and forget to tell the government, even if you have zero income you need to pay the minimum social security ( around €60 per month ) just to be registered as a service provider.
Basically, you are taxed pre-emptively wether you make any money or not. This stops a lot people from even trying to sell their services as freelancers, let alone start a company ( can't imagine the tax labyrinth that must be ). Sometimes I want to hire a friend for a small gig and they refuse because they can't afford the social security bill incurred in being a registered service provider.
This is killing the formal economy, stifling entrepreneurship, and it's also driving more and more people to informal contracts with cash transactions that deprive the state of needed income. I won't even talk about the crazy income tax band system we have...