Navigating Soft Landing: What to Know from CO:next’s Event
CO:next organized a free event in Lisbon on November 14. It happened at Avila Spaces and gathered a highly-knowledgable panel: Olha Mozzhakova from Intellias, Ingmar Zanger from SIXT, and Pedro Henriques, BRIDGE IN’s Founder and CEO. Svitlana Yefimova moderated the event.
The motto for the discussion circled soft landing in IT and how (and why) Portugal is an exciting country for big and small businesses. Besides defining what opening a company abroad means, the discussion went through the main challenges in the process, the importance of choosing between local or global partners, and what employee relocation is all about.
But it didn’t stop there.
What You’ll Learn:
Navigating Soft Landing: The Main Challenges and Break-throughs
The Supreme Importance of Working with a Local Partner
The “Musts” When Soft Landing a Company in a New Country
The “Mustn’ts” When Soft Landing a Company in a New Country
Where to Soft Land Your Business: Portugal Vs. Poland, Romania, and Ireland
Why Choosing Portugal to Soft Land Your Business
Soft Landing in IT: The Key Points to Take Home
Svitlana, Pedro, Ingmar, and Olha at the Soft Landing event in Lisbon | Image source: CO:next
Navigating Soft Landing: The Main Challenges and Break-throughs
The discussion’s key points were clear. The goal was to talk about:
Adapting culture and skills
Defining “soft landing” in IT tech
Balancing innovation and technology
Collaborative ecosystem engagement
Embracing change through transparency
All eyes were on the panel as the first questions from Svitlana started flying. She opened the conversation using the experience she gathered in Spain. Despite the similarities to Portugal, Svitlana immediately told the room there were critical differences in opening a company in each country – as no experience is the same.
She also mentioned the importance of being physically in the chosen country to kick off operations. Though remote working is a major benefit in her eyes, nothing replaces human presence in the beginning. But there was (way) more to discuss.
The Supreme Importance of Working with a Local Partner
A crucial point surfaced from the start of the conversation: the importance of working with a specialized partner. So, depending on the country chosen to expand a business, everyone agreed it was critical to work with someone (an entity) who helped navigate the whole process – while soothing it.
For instance, if a business expands in Portugal, it should partner with a company like BRIDGE IN.
The critical point discussed was how much knowledge these entities can provide and how much they can help since the beginning – from scouting pre-approved company names to going through all the bureaucracy of opening a local office and hiring employees (while remaining legal and compliant).
And that’s because, as discussed, each country has extremely specific laws and processes. Trying to navigate those alone can be a huge mistake – not to mention the time lost in the process.
The “Musts” When Soft Landing a Company in a New Country
The discussion remained around the “to-do’s” when expanding a business abroad.
One interesting advice was the need to do things at a certain pace. Rushing processes can ruin the main goal, as it happens when simultaneously launching a business in multiple countries. Doing one expansion at a time is best for higher success rates. Still, the truth is, as Olha Mozzhakova (Country Head of Intellias Spain) said, Intellias successfully expanded to multiple countries at once.
Then, it’s time to decide how to run operations.
Scouting places and getting around the cities is essential to deciding where to open an office. Only then can you worry about your team – the people you’re hiring. Besides attractive salaries, you must focus on unrefutable benefits packages, as that’ll attract and retain top talent – besides aiming for higher tax efficiency.
When asked about the best practices when soft landing in a new country, Ingmar (Managing Director of SIXT’s Tech Hub in Portugal) answered that searching for new talent is the main priority.
He continued saying SIXT’s main challenge when opening in Portugal was the need for someone to be physically present in the country. He added they needed a German (where SIXT is from) “to help build the culture from the start.”
Svitlana presenting the Soft Landing event | Image source: CO:next
He stated that “success depends a lot on how complicated your internal processes are.” – and that KPIs and management processes are also essential parts of overall success. “But to make local contracts, you need someone local as well. It all depends on your objectives.”
Pedro Henriques counterpointed.
“For Portugal, specifically, most Portuguese appreciate working in international companies. Hiring someone locally to manage isn’t necessarily as true as for other countries. They generally appreciate communication within an international environment.”
Then, he contributed with a specific example.
“The biggest company we helped soft land has 150 employees, 1 local HR, and no local manager. It was interesting. The company has smoother operations without someone local. So, it’s all about higher efficiency fighting bureaucratic thinking.”
But there are some things to avoid along the way.
The “Mustn’ts” When Soft Landing a Company in a New Country
Many businesses look at big, widely-known companies as potential partners. They see them as the perfect way of soft landing a company in a new, unknown country. However, that may not be the best scenario if your company isn’t as big either.
If your business already works globally, selling and partnering with multiple countries, it might make sense to work with global partners. But the same doesn’t happen with smaller businesses, like startups, intending to expand abroad – especially if you need special help with the “little things.”
Topics such as legal counseling, tax advice, and compliance procedures should be confirmed with local partners.
So, see it as it is: contact a local professional if you run a small business and have already chosen your expanding country. That’ll be the only entity able to help you navigate soft landing more easily – without the fuss global partners create, from whom you don’t need most of the services.
When asked about her experience working with global and local partners, Olha Mozzhakova said hiring someone local is crucial when dealing with labor law and payroll. “Set up a good community, have meetings and group chats.”
All in all, you should always weigh your options wisely.
Where to Soft Land Your Business: Portugal Vs. Poland, Romania, and Ireland
The conversation isn’t new, but significant changes happened in recent years.
According to Business Name Generator, a website for startups that caught Forbes’ attention, only Portugal makes the list of the 10 best countries in the world to start a business – Poland, Romania, and Ireland didn’t make that selection.
But, as the whole panel agreed, we can’t ignore Poland’s talent pool size or the lower labor costs in Romania. In fact, Pedro actually stated that some clients returned from countries like Romania, opting for Portugal instead, as they found they weren’t that cheap anyway. And it’s a fact that Portugal stands out most of the time, as common factors show:
It has more professionals with higher education degrees
Yet to discover fresh talent as companies are scouting in other countries
Friendly environment for startup creation
Favorable tax system
Affordable salaries
Portuguese workers are well-versed in English
You can find 2 to 3 of those characteristics in Poland, Romania, and Ireland. But it isn’t easy to meet them all as it happens in Portugal.
However, as Svetlana mentioned at some point, the decision between Portugal and Poland isn’t new. “So start looking at talent retention. Those countries allow freelancer options. It’s interesting to look at retention when Portugal reaches it.” However, it can quickly lead to employee misclassification, resulting in huge company fines.
Why Choosing Portugal to Soft Land Your Business
Much of the discussion flew around Portugal, as its thriving startup ecosystem remains super attractive.
However, one of the points Pedro mentioned had to do with the country’s bureaucracy. Though it happens in other countries, he spoke about the need to lower barriers to new (international) business entries. For that to happen, Pedro stated the importance of making bureaucracy more predictive – also because different countries require different processes, especially when comparing EU to non-EU businesses (which can get much tougher to implement).
But it’s not all bad. Everyone agreed on Portugal’s significant benefits as the main reasons for choosing the country to soft-land a business:
The talented, high-skilled professionals (here’s why you need Portuguese on your team)
Lower labor costs when compared to other countries
Acceleration in salaries, with progression margins
Global benchmarks are always one year behind
No currency risks for European businesses
Close proximity to European markets
The ideal timezone, including for fostering American relationships
Portugal is indeed a very attractive country to expand to.
Soft Landing in IT: The Key Points to Take Home
According to CO:next, these were the most important themes discussed at the event:
Local partnerships matter: Engage a local partner to streamline the process of establishing your office. Their expertise can be decisive in overcoming challenges efficiently.
Community is key: It's not just about opening a new office but relocating people. Foster a supportive community to ensure a smooth transition.
Tap into local talent: Portuguese professionals are receptive to international opportunities. Proactive and assertive hiring, coupled with competitive offers, can set you apart in their eyes.
Strategic planning is non-negotiable: Pay meticulous attention to planning and implementation. Regular team meetings are crucial for course correction and finding solutions.
Balance perfection and realism: Strive for perfection while keeping expectations grounded. Lessons learned are part of the journey.
Remember to ask for help whenever you need it. You don’t need to master everything. Reaching out to professionals can ease the process and increase success rates.
