Why is Lisbon’s Tech Scene Booming?

Lisbon's tech scene really started to take off in 2016 when Web Summit moved from Dublin to Lisbon. The annual technology conference showcases some of the brightest minds in the industry and offers a place for people to learn more about the latest trends. While the decision to move from Dublin to Lisbon was originally a surprise to some, it showed that Lisbon is a city with a lot to offer.

Tech startups were already commonplace in the city, but Web Summit helped bring more attention to Lisbon and Portugal as potential locations for growing businesses. Since then, many investors and business owners have been drawn to Lisbon, with the ideal climate, comparatively low cost of living and relaxed culture adding more reasons to set up here. In addition to this, English is a commonly spoken language, and there’s a wealth of talent already available to hire from.

Many large corporations, including those in the fintech industry, have recently moved their offices to Portugal either completely or partially. Leading Portuguese fintech firms offer both innovative payment methods and online payment possibilities. One major example of this is Revolut, which launched a consumer operation in Lisbon in December 2021. More than 500,000 people in Portugal now use this banking service, and it shows the potential for Lisbon-based companies.

Startup Support in Portugal

Aside from being a very welcoming place to visit, Portugal also encourages entrepreneurship with a number of funds and startup support schemes. These initiatives have been set up to help develop the tech industry in Lisbon and Portugal, leading to greater job creation and a better economy.

A 200 million euro fund was established by the Portuguese government in 2018 as an early-stage co-investment fund with venture capital funds. Another initiative for entrepreneurs is Startup Lisboa, which was established in 2011 by Bank Montepio, IAPMEI (the Portuguese Agency for Competitiveness and Innovation), and the city of Lisbon. Businesses wishing to launch in Lisbon can get assistance from Startup Lisboa.

The government also simplifies the taxes process for international investors. For instance, the non-habitual tax residency programme enables individuals who work in important businesses, such as the technology sector, to pay a flat tax rate of 20%. Additionally, those businesses are now excluded from paying taxes on their foreign-sourced income.

Early-stage investments from angel investors and private capital funds are increasing as well. For instance, Portugal Ventures has made investments totalling €162 million since 2012. There is also Faber Ventures, which helps early-stage firms and tries to give entrepreneurs both financial support and operational and entrepreneurial expertise.

The Next Stage of Tech in Lisbon

With such a booming tech scene, Portugal could be home to some of Europe’s most exciting new tech companies in the next few years. Already, the country has seen the creation of several unicorn firms, whose valuation surpasses €1 billion. The world's first market-leading, low-code software development system, OutSystems, was established in Lisbon in 2011 and was recently valued at $9.5 billion.

Companies such as Might are helping Lisbon-based startups grow and expand their reach online using email and online marketing automation techniques. As the tech scene continues to develop, it offers new opportunities for other businesses based in Portugal and all over Europe.