Portugal - Country Commercial Guide
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Assessment of Current Buyer Behavior in Market

The Portuguese B2C eCommerce market has been growing steadily in recent years and accounted for USD 3.740 billion in 2020. With an increase of 30%, the Portuguese eCommerce market contributed to the worldwide growth rate of 29% in 2020. In the first 6 months of 2020, eCommerce experienced a boom like never before, with a substantial increase of international and national digital shopping. According to local media, and a consumer habits study by MARCO “Post Covid-19 Consumer Habits”, a Madrid based consultant, more than 50% of Portuguese purchased online in the period of March through May, which contributed to the reinvention of traditional commerce and consolidated the eCommerce boom. 

According to a December 2019 report, prepared by Deloitte for APED - Portuguese Association of Retailing Companies, Portugal is ranked 30th in the global eCommerce competitiveness ranking (compiled by Eshopworld) and is expected to grow above the average of European countries by 2021. Metrics include logistics performance, sector revenues, number of buyers, online commerce penetration and its recent evolution.

As stated on a survey carried out jointly by CIP-Confederação Empresarial de Portugal (Portuguese Entrepreneurs Association) and ISCTE-Business School, sales through digital channels are worth close to a quarter of the revenues of Portuguese companies that have diversified in their sales methods and opted for digital sales. The estimated weight of digital sales in the companies selling through this channel is 23%, and this may help Portuguese companies to position themselves for EU support – which has a strong component in relation to digital channels. Of the 652 companies surveyed, 56% did not sell digitally before the pandemic and started to do so. About 15% of these companies recorded an increase between 11% and 20% in sales and 2.5% of companies recorded an increase of 40% in sales.

As reported by Unicre (Portuguese credit card management system), the top 5 online shopping cities in Portugal during the pandemic were Porto, Lisbon, Coimbra, Aveiro and São Miguel. Five categories are considered by ecommerceDB. Fashion is the largest segment in in Portugal and accounts for 32% of the eCommerce revenue in in Portugal. This is followed by Electronics & Media with 27%, Toys, Hobby & DIY with 21%, Food & Personal Care with 10% and Furniture & Appliances with the remaining 10%.

Market expansion in in Portugal is expected to continue over the next few years, as indicated by the Statista Digital Market Outlook. It has been predicted that the compound annual growth rate (CAGR 20-24) for the next four years will be 8%. Compared to the year-over-year growth of 30%, this decrease suggests a moderately flooded market. Another indicator of market saturation is the online penetration of 47% in in Portugal; in other words, 47% of the Portuguese population have bought at least one product online in 2020.

Local eCommerce Sales Rules & Regulations

Regulations for eCommerce in Portugal, are distributed among 6 regulatory agents:

  • The National Communications Authority (ANACOM) is the official entity regulating the communications sector, including electronic communications;  
  • The Competition Authority (AC) has the mission to enforce competition rules and foster the implementation of a culture of competition;  
  • The General Directorate of Consumers (DGC) promotes the policy of safeguarding consumers’ rights, and coordinates and implements measures aimed to protect the consumer;   
  • The Food and Economic Security Authority (ASAE) supervises and prevents non-compliance with the regulatory legislation, and is the national liaison body with its similar entities, at European and international levels;   
  • The Tax and Customs Authority (AT) has the mission to administer taxes, customs duties and other feeds attributed to purchases, and exercises border control within the European Union;   
  • Banco de Portugal has two essential missions: maintaining price stability and promoting stability in the financial system.

Currently, there is no working group for cooperation between the 6 regulatory bodies mentioned above.

Nevertheless, there is an Interinstitutional Group for eCommerce that includes: Authority for Working Conditions (ACT), Food and Economic Security Authority (ASAE), Tax and Customs Authority (AT), National Republican Guard (GNR), Public Security Police (PSP), Maritime Police (PM) and Foreigners and Borders Service (SEF). This national cooperation activity aims to strengthen institutional relations and enhance the existing synergies between the various entities, with the objective of guaranteeing compliance with the law and benefiting the various economic operators and citizens with the performance, in a single act, of several entities.

Following laws must be generally observed:

  • Decree-Law 7/2004, known as eCommerce law
  • Law 46/2012 on data protection and privacy in electronic communications
  • Decree Law 63/85, known as the copyright code
  • Decree-Law 330/90, known as the Advertising Code
  • Decree-Law 138/90, known as the Consumer Price Law
  • Law 24/96, known as the Consumer Law
  • Law 67/98, known as the Personal Data Protection Act
  • Decree-Law 143/2001, known as the law on distance contracts
  • Decree-Law 70/2007, known as the law on price reductions

There are more laws regulating commercial activity and some are intended only for specific sectors, so this is not a comprehensive collection of all legislation applicable to eCommerce.

We highlight from Decree Law 7/2004, known as eCommerce law, the implications that it has on the information that must be permanently available in your online store, namely:

  • Identification of the managing entity of the site;
  • Geographical address;
  • E-mail address;
  • Taxpayer number;
  • Other public registers;

We also highlight Law 46/2012 which implies that the acceptance of cookies is previously granted by the visitor and which places most eCommerce systems in operation outside the law.

The European Union’s Digital Single Market Initiative

Creating a Digital Single Market (DSM) is one of the ten priorities of the European Commission (EC).  The overall objective is to bring down barriers, regulatory or otherwise, and to unlock online opportunities in Europe, from eCommerce to e-government. By doing so, the EU hopes to do away with the current fragmented national markets and create one borderless market with harmonized legislation and rules for the benefit of businesses and consumers alike throughout Europe.

The EC set out its vision in its May 6, 2015 DSM Strategy which has been followed by several concrete legislative proposals and policy actions. They are broad reaching and include reforming eCommerce sector, VAT, copyright, audio-visual media services, consumer protection, and telecommunications laws.  New legislation has already been finalized on portability of online content and geo-blocking.

Many DSM proposals are still going through the legislative process.  DSM-related legislation will have a broad impact on U.S. companies doing business in Europe.

In addition, a new data protection legislation, the General Data Protection Regulation (GDPR) entered into force on 25 May 2018 (see separate section in this report). The three main pillars of the strategy are:

  • Pillar I: Better access for consumers and businesses to digital goods and services across Europe; Better access for consumers and businesses to online goods and services across Europe; Remove key differences between the online and offline worlds to break down barriers to cross-border online activity.
  • Pillar II: Shaping the right environment for digital networks and services to flourish; Achieve high-speed, secure and trustworthy infrastructures and content services; Set the right regulatory conditions for innovation, investment, fair competition and a level playing field.
  • Pillar III: Creating a European Digital Economy and society with growth potential; Invest in technologies such as cloud computing and Big Data, and in research and innovation to boost industrial competitiveness and skills; Increase interoperability and standardization


EU’s Digital Strategy

Rules for the protection of personal data inside and outside the EU

Information on contracts for transferring data outside the EU

The Electronic Commerce Directive (2000/31/EC) provides rules for online services in the EU.  It requires providers to abide by rules in the country where they are established (country of origin).  Online providers must respect consumer protection rules such as indicating contact details on their website, clearly identifying advertising and protecting against spam.  The Directive also grants exemptions to liability for intermediaries that transmit illegal content by third parties and for unknowingly hosting content. 

Comprehensive Market Research on eCommerce in the EU is available upon request.

Value Added Tax (VAT)

The EU’s VAT system is semi-harmonized. While the guidelines are set out at the EU level, the implementation of VAT policy is the prerogative of Member States. The EU VAT Directive allows Member States to apply a minimum 15% VAT rate.  However, they may apply reduced rates for specific goods and services or temporary derogations. Therefore, the examination of VAT rates by Member State is strongly recommended.  These and other rules are laid out in the VAT Directive.

The EU applies Value Added Tax (VAT) to sales by non-EU based companies of Electronically Supplied Services (ESS) to EU-based non-business customers.  U.S. companies that are covered by the rule must collect and submit VAT to EU tax authorities. From January 1, 2015, all supplies of telecommunications, broadcasting and electronic services are taxable at the place where the customer resides. In the case of businesses this means either the country where it is registered or the country where it has fixed premises receiving the service. In the case of consumers, it is where they are registered, have their permanent address, or usually live. 

As part of the legislative changes of 2015, the Commission launched the Mini One Stop Shop (MOSS) scheme, the use of which is optional. It is meant to facilitate the sales of ESS from taxable to non-taxable persons (B2C) located in Member States in which the sellers do not have an establishment to account for the VAT.

  • This plan allows taxable persons (sellers) to avoid registering in each Member State of consumption. A taxable person who is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) can electronically submit quarterly Mini One Stop Shop VAT returns detailing supplies of ESS to non-taxable persons in other Member States (the Member State(s) of consumption), along with the VAT due.

Until 2021, goods imported from countries outside the European Union with a value of less than EUR 22 will remain exempt from VAT. This limit is lower in some Member States. Imported goods are sometimes deliberately undervalued in order to remain exempt from VAT. In 2018, VAT laws were amended to prevent these price distortions from continuing and it was determined that all goods imported from third countries, regardless of their value, will no longer be exempt from paying VAT from 2021 onwards. Also, from this date 2021, large marketplaces will be responsible for collecting VAT from the consumer corresponding to purchases of goods from outside the European Union.

In 2024 the European Union will launch a mega database with detailed information on cross-border online shopping to reduce eCommerce tax fraud. The Commission has received numerous complaints in relation to the new rules on ESS and is in the process of revising them. The most important pieces of legislation on VAT are the EU VAT Directive 2006/112/EC and its Implementing Regulation 282/2011.

Legal and Competitive Obstacles

According to a December 2019 report, prepared by Deloitte for APED - Portuguese Association of Retailing Companies, in order to identify the existing barriers to a higher growth in sales made through digital channels in Portugal, it was concluded that:

  • Counterfeiting and piracy cost Portuguese companies 9.5% of their annually sales, which is equivalent to approximately 1150 million euros;
  • Portuguese consumers buy from retailers outside the EU often in search of more competitive prices.
  • Portugal has the highest proportion of cross-border online orders in the EU (85% of the total), thus it is particularly exposed to the actions of non-EU operators who, although subject to the same legal framework in force for the entire Digital Single Market, present increased difficulties for regulatory authorities in sanctioning violations of the law;
  • Portugal has high values of digital and financial illiteracy, which contribute to a greater inhibition in experimenting online shopping and limits their ability to assess the different payment methods and financing. In addition, the lack of information on their rights as consumers means that Portuguese consumers, in case of dissatisfaction with their purchase, are inhibited from reporting to the authorities when products are defective or do not otherwise comply with EU law;
  • Given the high complexity of customs tax control for eCommerce, Portugal is not managing to meet all the challenges of collecting the correct amounts of VAT and customs duties on goods and services traded over the Internet;
  • Although European legislation is seen as being at the forefront of regulating consumer rights and fostering the sector, there are discrepancies between the law and the effective consumer protection resulting from its enforcement;
  • Late availability of internationally available digital payment methods hampers the competitiveness of national operators;
  • Portuguese companies do not find enough talent in quantity and quality in the national labor market to perform functions in the areas of engineering, technology and information technology;
  • The activity of operators is affected by the national and European regulatory framework, which presents two major challenges from the interlocution point of view:
  • On the one hand, the dispersion of responsibilities among the six different entities with supervisory powers in Portugal over eCommerce transactions leads to the frequent requirement for operators to maintain multiple contacts and communication channels for the same occurrence;
  • On the other hand, legal differences persist within the EU, so the same commercial practice can be assessed differently from country to country, leading to an environment of greater regulatory risk for eCommerce in Europe.

To address the identified challenges, a set of potential measures to minimize the identified constraints and enhance the competitiveness of the sector in Portugal was proposed:

  • Create an eCommerce supervisory center, materialized in an independent body, responsible for assessing the consistency, compliance and sustainability of legislation and regulations applicable to eCommerce and for adopting measures to promote transparency, regulatory effectiveness, the quality of economic policy decisions and strengthening the credibility of digital operators accessible on national territory;
  • Encourage the training and capacity building of regulatory authorities’ resources in legal, business and technology matters, so that they can apply the law and supervise the market in a correct and adequate manner;
  • Ensure the use and promotion of intra-Community and international administrative cooperation channels in order to ensure compliance with the law by operators based outside Portugal and re-establish competition in the digital market;
  • Regularly monitor selectively, rather than randomly, orders that have characteristics that are often associated with products that do not meet consumer safety and protection standards;
  • Strengthen the compliance with tax obligations of operators selling in the national area, adopting measures that strengthen compliance with the law and penalize unfair behavior;


International Data Corporation Portugal

ACEPI – Portuguese Association of Electronic Commerce and Interactive Advertising

Local eCommerce Business Service Provider Ecosystem 

Portuguese Business Promotion Agency (AICEP)

Due to the new business context caused by the pandemic, the Portuguese Business Promotion Agency (AICEP) announced in April 2020 a set of initiatives to support companies that are betting on eCommerce. One of the initiatives is a self-diagnostic tool for eCommerce, available on the Portugal Exporta platform, which allows companies to understand their level of preparation to start exporting online. Companies will receive a report with recommendations on how to prepare themselves or how to start taking advantage of online exporting.

Additionally, AICEP is promoting a set of webinars dedicated to international eCommerce, held through AICEP’s e-learning platform – the e.Academia Internacionalizar. The agency will also invest in e-learning courses so that companies can acquire more skills in eCommerce, as a necessary evolution for its internationalization. Furthermore, AICEP promotes partnerships with marketplaces to give Portuguese companies the opportunity to know the business potential and operation of such platforms.

The biggest player in the Portuguese eCommerce Market is elcorteingles.pt. The store had a revenue of US$189 million in 2020. It is followed by zara.com with US$139 million revenue and amazon.es with US$103 million revenue. Altogether, the top three stores account for 10% of online revenue in in Portugal. One of the fastest-growing stores in the Portuguese market is billabong.pt. The store achieved sales of about US$1.1 million in 2020. Its revenue growth amounted to 131% in the previous year.

In in Portugal, CTT Correios de Portugal is the most frequently offered delivery service provider among online stores. Of those stores that indicating which service they use to transport their goods, 26% cited CTT Correios de Portugal as one of their providers. Moreover, Chronopost and UPS are among the top three shipping service companies offered by online retailers in in Portugal, at rates of 14% and 12%.

e-Commerce Connect 2020

On January 29 and 30, 2020, Portugal hosted for the third time the E-Commerce Connect, an event dedicated to eCommerce, whose main objective is to bring online stores closer to the best and most innovative technological services, which will be able to increase the performance of their digital presence by making them aware of multiple solutions and services, both national and global. During the two days, more than 50 success stories were presented, more than 1000 one-on-one meetings were held, and international keynotes were shared. 

The next edition of this event will take place on January 29 and 30, 2022.