Methods of Payment

Depending on the size of the order and payment history of the buyer, the terms of the sale will vary. For larger transactions or where the seller is less comfortable with the credit worthiness of the buyer, foreign products are often imported using irrevocable letters of credit against documents, particularly during the first year of business. Opening irrevocable letters of credit is a straightforward process in Portugal through which importers can insure against exchange risk with their banks. When a long-term relationship has been established between a supplier and a customer, more favorable credit terms may be negotiated.

Payment terms are frequently 30, 60 and 90 days. Large corporations, including large retailers, negotiate or impose longer payment terms that can last up to six months. The government defers all payments. Depending on the department, payments can be deferred up to one year. Product pricing must also include the necessary financial charges.

Aside from letters of credit, methods of payment most commonly used in Portugal for international trade are:

• Checks (Cheques): While bank checks offer security in transactions, (since the bank issuing the check needs the guarantee of the transfer to issue it), personal checks do not provide adequate guarantees against commercial risk, as the bank does not guarantee the funds in the account of the person issuing the check.
• Payment Order (Letras): In this case, the importer gives an order to the bank and, by using a correspondent bank in the same country, pays the exporter’s bank the amount due. The initiative for payment in this case is the importer’s responsibility. These transfers, via SWIFT, are a common practice in the Portuguese banking system.
• Documents against payment (Cartas de Crédito): Exporters use this instrument to ensure the possession of the merchandise until the collection of funds, or at least until the importer accepts a bill of exchange.
• Documentary Credit (Crédito Documentário): This method of payment offers safer conditions in the transaction, due to the involvement of banks in both countries. In this case, the importer’s bank ensures against the entrance of a third party (an exporter, the bank or a correspondent bank).
  Credit Card (Cartão de Crédito) for Small Online Purchases: Even though credit card purchases over the Internet are still not widespread in Portugal, this option should not be excluded.  

A U.S. exporter looking to recover debts should contact the Portuguese Credit and Collection Management Association (APERC) for information on and contact with debt collecting agencies. 

Credit reports on Portuguese companies can be obtained by contacting any of the sources below:

Dun & Bradstreet Portugal
R Barata Salgueiro 28,3º
1250-044 Lisboa, Portugal
Tel.: +351 213 500 300 Fax: +351 213 578 939

Igerinform - Relatórios de Crédito
Avenida Columbano B Pinheiro 75,7º
1070-061 Lisboa, Portugal
Tel.: +351 213 588 800 Fax: +351 213 588 801

You may also take advantage of customized credit report provided by the U.S. Commercial Service at the U.S. Embassy in Lisbon. Our reports will help you assess the risk, reliability and capability of the Portuguese company. This service is called the International Company Profile (ICP). For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.

Banking Systems

Over the past three decades, Portugal’s banking system has undergone a profound transformation—from a government-controlled structure to a liberalized, market-driven environment fully integrated with the European Union. Key reforms, including the abolishment of administrative interest rates in the 1980s and the harmonization of banking legislation in the 1990s, aligned Portuguese regulations with EU standards and laid the foundation for a modern financial system.

Today, Portugal offers a sophisticated banking landscape with advanced financial products and services. The country maintains one of the most efficient interbank networks in Europe, with widespread access to ATMs, bank branches, and digital banking platforms. All major banks offer internet and mobile banking, and credit and debit cards are accepted across hotels, restaurants, shops, and service stations nationwide. Most bank branches operate Monday to Friday, from 8:30 a.m. to 3:00 p.m., and are closed on weekends and public holidays.
The banking sector is supervised by the Bank of Portugal (Banco de Portugal), which is part of the European System of Central Banks (ESCB). Since the post-bailout period of the mid-2010s, Portugal has made significant strides in strengthening its financial institutions. Non-performing loans (NPLs) have dropped to 2.6% as of mid-2024, and banks have improved their solvency ratios and capital buffers. In Q1 2024, the sector posted a return on equity of 15.5%, with total assets growing by 2.6%, driven in part by sovereign debt holdings and increased consumer lending.

The five largest banks—Caixa Geral de Depósitos (CGD), BPI, Novo Banco, Santander Totta, and Millennium BCP—continue to dominate the market. After years of restructuring, Novo Banco is now preparing for a major IPO, expected to be the largest bank listing in Portugal in recent history. This marks a turning point in its post-crisis trajectory and signals renewed investor confidence. Meanwhile, digital transformation remains a strategic priority across the sector, with banks investing heavily in AI-powered services, cybersecurity, and customer experience platforms.

In the first quarter of 2025, Portugal’s banking sector continued to demonstrate resilience and steady growth. According to the Bank of Portugal, total assets across the system rose to €475.96 billion, marking a 1.6% increase over the previous quarter. This expansion was driven by a combination of sovereign debt holdings and moderate growth in consumer lending. Customer deposits reached €350.56 billion, up 1.3%, while net loans to customers increased by 1.2%, totaling €262.45 billion. As a result, the loan-to-deposit ratio narrowed further to 74.9%, reflecting a cautious lending approach amid strong deposit inflows.

The sector’s liquidity position remains robust, supported by high-quality liquid assets and reduced reliance on ECB funding. Although the exact liquidity coverage ratio (LCR) for Q1 2025 has not been disclosed, indicators suggest continued compliance with regulatory thresholds and ample short-term funding capacity.

Asset quality has improved significantly. The gross non-performing loan (NPL) ratio declined to 2.3%, while the net NPL ratio stood at 1.3%, underscoring the effectiveness of risk management and loan recovery strategies. Profitability metrics also strengthened: return on equity (ROE) reached 15.5%, and return on assets (ROA) rose to 0.9%, more than doubling the levels recorded in early 2021.

Capital adequacy remains solid. The total capital ratio was estimated at 18.1%, and the Common Equity Tier 1 (CET1) ratio stood at 13.4%, reflecting strong capitalization across the sector. The leverage ratio held steady at 7.2%, well above the Basel III minimum requirement of 3%. Operational efficiency also improved, with the cost-to-income ratio falling to 48.3%, driven by digital transformation and disciplined cost management.
These indicators confirm that Portuguese banks have emerged from the post-crisis period with stronger balance sheets, improved profitability, and enhanced operational resilience—positioning the sector for continued stability and competitiveness within the European financial landscape.

Foreign Exchange Controls

Portugal does not impose exchange controls. Residents and nonresidents are free to hold deposits in any currency with Portuguese banks, and there are no restrictions on foreign exchange supply. However, there are no official guarantees against inconvertibility.

Reporting requirements apply to banks and financial institutions. Under Banco de Portugal Instruction No. 4/2024, entities must report external economic and financial transactions—such as cross-border investments, loans, and derivatives—when the total annual value equals or exceeds €250,000. These reports are submitted annually, typically between March and April.

Transfers of less than €10,000–€12,500 in foreign banknotes, gold, travelers’ checks, or bearer securities are generally exempt from customs declaration. Amounts above this threshold must be declared to the Portuguese customs authority when leaving the country.

Portugal continues to strengthen its anti-money laundering framework in line with EU directives and global standards. Transactions exceeding €10,000 involving cash, art, real estate, or other high-value assets require full client identification and documentation. Suspicious transactions must be reported to the competent authorities, and enhanced due diligence applies to professionals such as notaries, lawyers, and dealers in luxury goods.

For additional information, visit the U.S. Department of State Investment Climate Statements.

U.S. Banks and Local Correspondent Banks

• Citibank (Citigroup) Located in Lisbon, Citibank operates a representative office focused on corporate and institutional banking. It does not offer retail banking services locally.
• J.P. Morgan Chase Also based in Lisbon, J.P. Morgan provides investment banking and financial advisory services. Its operations are geared toward large corporate clients and cross-border transactions.
• Bank of America (via Merrill Lynch) Merrill Lynch, now part of Bank of America, maintains a Global Wealth Management office in Lisbon. Services include asset management and private banking for high-net-worth clients.
• American Express While not a traditional bank, American Express operates through a partnership with Millennium BCP in Portugal, offering credit card services and support for U.S. cardholders