Starting a business anywhere isn’t easy … or cost-efficient … and we began to question the wisdom (and value) of opening a small “snack bar” outside of Castelo Branco that sells small-plated, typically American food: Tapas Americanas.
In addition to rent, utilities, furnishings and/or fixtures, merchandise (or whatever you are selling), to be factored into one’s business costs in Portugal we’re told are:
–LEGAL FEES to start up the business. Good lawyers — and we have a great one! — are worth their time and fees. In addition to all the government “red tape,” we understand that that “council” of our municipality must approve the request to open a new business;
–LICENSE FEES AND PERMITS
–BUILDING CODES & CONSTRUCTION
–INSURANCE (Health). With or without owning a business, to be granted long-term residency in Portugal, one must have, at minimum, given health coverages. Our health insurance for the two of us is about €200 per month;
–INSURANCE (Liability). The business will need coverage to protect itself and its owners (us!) against possible “injuries” suffered by customers and bystanders;
–A REGISTERED ACCOUNTANT is absolutely required. Add another €50-150 each month;
–EVERY EMPLOYEE, INCLUDING YOURSELF, AS OWNER, MUST BE PAID AT LEAST THE MINIMUM SALARY. Currently, we’re told that’s €665 every month … for 14 months each year
–SOCIAL SECURITY CONTRIBUTIONS. Each employee, including the owner, must contribute @ €184 per month to Portugal’s Social Security system.
–DEBIT/CREDIT CARD FEES. 4% of gross sales. Actually it’s O.9% with BPI, Millennium and Novobanco; 0.75% with CGD and up to 1.5% with BIC. Minimum payment taken back by the bank is usually 0.05c
–FINANCAS and their ‘connected’ cash register(s). So, even before you open the door (assuming you have one) or invest in inventory or stock or ingredients for food to sell, one must cover monthly costs of at least €850!!!!!!
If we sell our “Tapas Americanas” at the very reasonable rate of €4 per plate (or dish), we would need to sell over 200 tapas per month just to meet our essential expenses … not counting other overhead (utilities, etc.), salaries and Social Security for each additional employee, and taxes.
Shared here are personal observations, experiences, and happenstance that actually occurred to us as we moved from the USA to begin a new life in Portugal and Spain. Collected and compiled in EXPAT: Leaving the USA for Good, the book is available in hardcover, paperback, and eBook editions from Amazon and most online booksellers.