Portugal

Investing

FDI in figures

Foreign Direct Investment in Portugal is considered to be a priority. Its variation has been positive over the last few years and confirms the weight of the EU as its source.

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	2,327	3,965	7,371
FDI inward stock (millions USD)	n.c.	n.c.	85,520.0
Performance Index*, world ranking	76	71	86
Potential Index**, world ranking	42	45	n.c.
Number of Greenfield investments	71	28	44
FDI inwards (in % of GFCF)	5.9	10.0	17.2
FDI stock (in % of GDP)	n.c.	n.c.	43.9

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Portugal

Strong points: Since it joined the European Free Trade Association, Portugal has wanted to strengthen its position as a destination for Foreign Direct Investment. That is why, for years now, and especially at the level of the executive and official institutions, favorable conditions have been created for the setting up of international projects in Portugal, and other favorable conditions inherent to the country have been highlighted:
- its geographical situation as a bridge between 3 continents: Europe, Africa, America;
- its moderate climate;
- its socio-political stability and the non-existence of terrorism;
- the stability of its currency, the framework of the Euro Zone and the EU;
- its qualified manpower.
Consult the Ministry of the Economy website.
Weak points: A certain rigidity in labor law.
Government measures to motivate or restrict FDI: Government policies have followed the priority established by the Prime Minister, i.e. capturing foreign investment. In order to do this, tax facilities have been set up, effective logistics for warehousing and transport (especially the Sines terminal in the South-West of the country), improvements in telecommunications infrastructures, etc.
Action concentrating on capturing foreign investment and studying dossiers has been carried out by a team: the AICEP (Portuguese Agency for Investment and Foreign Trade), very close to the Prime Minister.
An awareness campaign among AICEP delegations abroad has been carried out to spread in their countries the idea of Portugal as a place for investment.
A relaxing of the labor law is under way to increase the flexibility of the workforce.
A special regime grants aid for large projects (over 25 million EUR).
Bilateral investment conventions signed by Portugal: Portugal has signed bilateral agreements with almost fifty countries (not including the EU).
To see the list of countries, click here.
To see the conventions, click here.

Administrative procedures relative to foreign investment

Freedom of establishment: Yes
Acquisition of holdings: Portuguese law allows a taking up of the capital or the acquisition of a Portuguese company up to 10% or more.
Obligation to declare: Foreign investors may carry out all types of activities in the same conditions as a local investor. Foreign investment in Portugal is, on principle, free of all administrative control. The only formality that the foreign investor must comply with is registration, for statistical reasons, within 30 days of the investment.
Finally, investment projects "presenting a particular interest for the Portuguese economy" (projects over 4.9 million euros, especially those creating jobs, allowing industrial reconversion, ensuring the development of a priority region, or introducing new technologies) are subject to a particular procedure managed by the Institute for Investment, Trade and Tourism in a restructured Portugal "AICEP".
The agency for the promotion of foreign investment in the country can provide information about the authorizations necessary for setting up.
Competent organization for the declaration: AICEP
Requests for specific authorizations: There are no restrictions on foreign investment in Portugal, but only an analysis of the legality of the project (applicable also to any project of national capital).
Consult the Guide for investors.