Why Portugal is Becoming a Leading IT Outsourcing Destination

IT outsourcing in Portugal has gained significant momentum with its cost-effective and high-quality software development solutions. The growing pool of skilled professionals, competitive service rates, and a strong digital infrastructure make Portugal ideal for outsourcing IT projects. The country’s strategic location, favorable business climate, and government support further enhance its appeal, attracting global tech companies and startups alike. As Portugal continues to strengthen its position as a European tech hub, businesses worldwide are leveraging its IT outsourcing potential to drive innovation and efficiency.

Portugal as an Economy

Portugal’s economy is primarily service-based, with manufacturing playing a significant role and agriculture contributing a smaller share. As a developed nation with an advanced economy, it boasts the world’s 14th largest gold reserves and the 8th largest proven lithium reserves. Exports accounted for 49% of the GDP in 2022.¹
Following a pandemic-induced recession, the economy rebounded in 2021, with GDP exceeding pre-pandemic levels by early 2022. This recovery was driven by strong domestic demand and a resurgence in tourism, supported by one of the world’s highest vaccination rates.²

The economy of Portugal at a glance

	Gross Domestic Product
Annual GDP		USD 287 Billion (2023)
GDP Per Capita		USD 27,275 (2023)
Income Category		High Income (2023)
	People
Population		10.4 Million (2024)
Literacy Rate		97% (2021)
EF English Proficiency Index		Very High Proficiency (2024)
	IT Sector
IT Services Market Size		USD 3 Billion (2025)
IT Outsourcing Market Size		USD 1.2 Billion (2025)
Registered Software Companies		10,000+
	Business Environment
Ease of Doing Business		Score: 76.5 | Rank: 39 (2023)
Political Stability Indicator		Percentile Rank: 70.6 (2023)
Corruption Perceptions Index		Score: 61/100 | Rank: 34/180 (2023)

The Software Development and IT Landscape in Portugal

Portugal’s IT industry has witnessed steady growth in recent years, positioning the country as a leading European hub for technology. Global giants like Google, Bosch, and Amazon have set up offices in Portugal. According to IBISWorld, the Software Development Market in Portugal is expected to reach €1.5 billion by 2023. This growth has made Portugal a favored destination for software development companies and businesses looking to outsource their IT projects in Portugal.

Portugal, located in Southern Europe, has emerged as an attractive destination for international businesses seeking to establish offices. According to the 2023 Technology and Innovation Report, Portugal ranks 33rd globally for its technology and innovation landscape. The country offers significant growth opportunities for IT companies of all sizes and specializations. Its innovation strategy supports diverse investment possibilities and a broad spectrum of IT services, positioning the country as an appealing choice for businesses in the sector.

Portugal’s IT sector offers a strong platform for hiring dedicated developers, with benefits including a convenient European time zone, a growing pool of diverse talent, high English proficiency, cost-effective rates with world-class quality, and government support through tax incentives and funding. These factors make IT outsourcing in Portugal an efficient and reliable choice.

Top Software Development and IT Employers in Portugal

Below is a list of prominent companies employing IT professionals in Portugal. While major global players like Amazon, Tata Consultancy Services, Globant, EPAM Systems, Visma, Atlassian, SoftServe, Verizon, have operations in the country, their local employee count is relatively modest. Therefore, we have filtered and sorted the list based on the number of employees the following companies have in Portugal.

ASSOFT – Portuguese Software Association

ASSOFT – Portuguese Software Association was established in 1991 as a business association, formed by several companies in the area of software, hardware, and communications. ASSOFT’s main statutory objectives are the promotion, defense and dissemination of the legality, quality and integrity of the software services in Portugal, as well as the hardware and communications systems associated with it and the collective management of copyright and related rights in relation to the software products created and produced by its members and users.

Reputed Institutions in Portugal Known to be the Top Sources of IT Graduates

The following is a list of the top universities in Portugal, ranked based on their research performance in Computer Science by EduRank. The rankings were determined using a graph of 3.41 million citations received by 212,000 academic papers produced by 29 universities in Portugal. Publication ratings were adjusted for release dates and incorporated into final scores. The rankings do not differentiate between undergraduate and graduate programs, nor do they account for current majors offered. We have sorted the list in terms of the number of alumni in IT and engineering roles. Please note that the alumni in engineering roles may include other engineering domains other than computer science or software engineering since we have taken the filtered count from their LinkedIn pages. Degree information is available on each university’s page, but it is recommended to verify details on the respective university’s website.

Conclusion

Portugal’s IT sector is thriving and gaining global recognition, driven by key trends shaping its future. The rise of startups, bolstered by strong government support, is another critical factor. Portugal’s favorable business environment, coupled with special grants for IT research and development, is fueling the growth of new companies. Additionally, Portugal offers a vast pool of talented and skilled developers, making it an attractive outsourcing destination. Businesses benefit from the flexibility to hire diverse professionals, whether assembling full teams or engaging freelance IT specialists.

If you’re looking to outsource in Portugal and tap into its thriving IT sector, let us help you connect with the best companies through Enosis Outsourcing. Contact us today to learn more and explore the opportunities Portugal has to offer!

References

[1] Economy of Portugal ↩

[2] Portugal: Policies for a Strong Economy ↩

[3] Software Development in Portugal – Market Size, Industry Analysis, Trends and Forecasts (2024-2029) ↩