Portugal’s tax regime has become a magnet for many firms, prompting some to relocate parts of their operations across the border. This shift is redefining how collaborations with Zamora are viewed and mirrors a broader pattern seen in neighboring border regions, especially Galicia and other areas adjacent to Portugal. The topic was highlighted a few months ago by Alberto Núñez Feijóo, who warned that investment, income, and inheritance are at stake and that Portugal’s incentives encourage moving activities across the border. He also noted that Galician companies already maintain a footprint in Portugal, while border regions are attracting similar movements.
Although provincial figures are not readily available, national data reveal a clear trend: more Spanish companies are establishing operations in Portugal. In many cases, firms start with a branch in Portugal and gradually shift the head office across the border. In 2010, Zamora reported 434 companies with branches in Portugal, employing around 43,000 workers and posting revenue just over ten million euros. These were predominantly large firms. By 2020, the landscape had evolved: 780 Spanish companies held subsidiaries in Portugal, while total employment in those subsidiaries dipped to roughly 35,000. Yet the number of firms more than doubled, signaling a rise in smaller enterprises planting roots in Portugal. Revenue figures remained relatively stable over the decade, according to the national statistics institute.
The contrast between Spanish and Portuguese tax systems stands out when assessing corporate levies. Spain imposes a corporate tax rate of 25 percent, which is four percentage points lower than its neighboring border country overall. Yet, incentives can be higher on the Portuguese side for certain commercial activities. Property transfer tax ranges from 5 to 11.5 percent in Spain but does not exceed 6.5 percent in Portugal. Wealth tax can climb to 3.5 percent in Spain, while Portugal does not apply wealth tax. Inheritance and donation taxes exist in Spain, though several communities offer reliefs, including Castile and Leon. In Portugal, many of these burdens are not present, which contributes to the perceived advantage on that side of the border and is cited as a driver for relocation or expansion.
To escape the treasury
Nationally, the Zamora Chamber of Commerce and Industry notes there is not a large-scale movement of companies between autonomous communities. The main taxes faced by firms are national and apply uniformly across Spanish territories. The migration pattern appears more pronounced in Navarre and in provinces directly bordering the Basque Country. In many cases, firms switch their registered offices to these regions to secure more favorable leasing terms.
What could unfold at the national level is that companies establish their headquarters in the Community of Madrid to minimize tax scrutiny. A business with ten million euros in invoicing might seem prominent in Zamora but could go largely unnoticed in Madrid, according to industry sources cited by the press. In this sense, some firms relocate their headquarters while keeping production in other communities as well.