Do we need our own company in Portugal to hire there?
No. With Fronted as your Employer of Record, your employee is employed by our own Portuguese company on a local contract, and you direct their day-to-day work. We handle payroll, social security, tax withholding and reporting, and you have one dedicated contact the whole way.
Hiring someone as a contractor instead carries a risk: Portuguese law presumes employment when the relationship works like a job, and then employee rights and employer obligations apply.