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Five tips for doing business in Portugal

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Portugal is a stable, developed country, but with a recent history that closely mimics that of a developing nation.

For 41 years, Portugal was ruled by the Estado Novo, an authoritarian regime, the conservative policies of which hampered the growth of the Portuguese economy. The Estado Novo was overthrown in the Carnation Revolution of 1974, but the political turmoil hindered progress even further, and the country declined into a period of negative economic growth. What could be considered the “modern” era of Portuguese business and economic policy didn’t begin until the country was admitted to the European Union in 1986.

Portugal has made up ground in recent decades, with a vast increase in its standard of living, but it still grapples with the residual effects of decades of upheaval and stunted economic growth, which has a trickle-down effect to the business culture and climate of the country.

If you’re thinking about conducting business or running a company in Portugal, here are some things to remember.

The management style is hierarchical

Those who supervise others are generally given a great deal of power and respect, but in return, they are expected to act in a compassionate and relatable manner toward those under them. The key phrase to remember is “authoritative but not authoritarian.”

Because of the expectation of authoritative management, Portuguese employees thrive when given clear, precise instructions and will follow those instructions with little or no debate. A minimal-structure management style could be interpreted as weak or unclear and could lead to frustration for both manager and employee.

Decisions aren’t made in formal meetings

The concept of a brainstorming session is not widely embraced in Portugal. Ideas are exchanged and developed in less-formal gatherings that occur outside of formally organized meetings. Once a meeting is scheduled, it often serves as a means of informing a larger audience of an idea that is ready for approval. If action is taken during the meeting, it might be merely to ratify the idea or decision as-is.

If something ends up on the meeting table that isn’t ready for final approval, don’t expect those present to come to a decision on the spot. They will likely want to take the information and discuss it with colleagues who aren’t present. Businesspeople used to meetings that produce definite outcomes may have to adjust their expectations and demonstrate more patience.

Punctuality isn’t demanded

In a meeting or less-formal business gathering, showing up on time is considered a sign of respect and good intentions, but failing to show up on time isn’t necessarily considered the opposite. Anticipate the possibility that tardy Portuguese counterparts could keep the meeting held up for some time.

Once a meeting begins, the agenda will generally be viewed as a guideline as opposed to a rule. The subject matter can meander, as the Portuguese, for the most part, value the flow of a conversation over maintaining a rigid meeting structure.

The role of women in business is evolving

Portugal has a conservative and traditional culture, which is still highly paternalistic. However, recent decades have brought a noticeable movement toward the involvement of women in business.

Most of the rules that would apply anywhere else apply in Portugal: Show respect to female counterparts, do not be condescending and do not make inappropriate remarks or advances of a sexual or nonsexual nature.

However, there are some traditions to which Portuguese men — particularly older men — may still adhere. If a Portuguese businessman refuses to let a woman pay for a lunch or dinner, try to view it as a cultural difference, not as a patronizing act. If a woman is still uncomfortable with the idea of her Portuguese male counterpart picking up the tab, those reservations should be communicated prior to the meal.

Business formal dress is preferred

While companies in the U.S. and other Western countries have veered toward more casual offices, with jeans and golf shirts accepted as part of everyday attire, Portuguese business culture still mandates jackets, collared shirts and ties for men, and business suits with skirts for women. Some businesses have adopted a “casual Friday” policy, but it’s still relatively rare.