Overview

In 2005 it took 11 procedures and 78 days to start a business in Portugal—slower than in the Democratic Republic of Congo. An entrepreneur needed 20 forms and documents, more than in any other European Union country, and the cost came to almost €2,000. The planning for reform began as soon as new Prime Minister Jose Socrates took office in March 2005. And in 4 months, a one-stop shop for creating a company was fully operational. Portugal is now one of the easiest countries to start a business, requiring only 7 procedures, 7 days, and €600.

This case study follows the steps to reform, noting how Portugal learned from past mistakes and worked with opponents to its 2006 reform.

Main Findings

• Starting a business in Portugal now only requires 7 procedures, 7 days, and €600.
• More than 70% of Portugal’s entrepreneurs now use the new system, known as On the Spot Firm.
• The European Commission recognizes Portugal’s reform with a “Red Tape Reduction” prize in December 2006.