Invest in Portugal: Right Choice & Right Time

Today, Portugal is an attractive destination for invest­ment, offering unique competitive advantages.

Portugal has been changing in recent years. The country implemented around 500 measures and structural reforms (like those in the labour mar­ket, which increased flexibility; the streamlining of bureaucracy and licensing; changes to the judicial system, to speed up justice and make it more cred­ible to investors; and the reform of corporate income tax that came into effect in 2014, creating one of Europe’s most favourable corporate tax regimes by 2018), and has been correcting structural imbal­ances, like the external and public accounts.

Our competitiveness has been improving, as shown in the last World Economic Forum Competitiveness report, in which Portugal rose 15 positions – standing now as the 36th most competitive coun­try in the world (out of 144), and our economic out­look is a lot more favourable.

Our offer is very attractive: competitive talent availability, customer service mind-set, strategic location, high quality ICT infra-structure, competi­tive grants and incentives (reinforced with the new Portugal 2020) and other intangible aspects such as hospitality, easy integration of foreigners and the image of being a pleasant and safe country to live in. These are some of our competitive and distinc­tive attractiveness factors.

Portugal is on track to create one of the world’s most competitive and business friendly environments. We invite all companies wishing to set up opera­tions abroad, to do it here, in Portugal. Portugal is the right choice at the right time to invest.

Correction of Structural Imbalances and Structural Reforms

External and Fiscal Balances

Portugal already records an external balance surplus and has been reducing the fiscal deficit.

  • Improving from an external deficit (current and capital account) of 10.9% in 2008 to a positive balance of more than 2% of GDP.
  • The budget deficit is expected to be under 3% of GDP in 2015.

EEstimate.

Sources: Portuguese Government, INE, Bank of Portugal, European Commission, AICEP.

Structural Reforms – to Improve Competitiveness

Labour Market

Portugal converged to the OECD average, regarding flexibility of the labour market. Strong measures to enhance labour flexibility:

  • More working days.
  • “Hours bank” system during production peaks can be negotiated directly with the workers.
  • Compensation for dismissal has decreased.
  • Reduction of overtime work costs.

LEICA

“(…) With their outstanding expertise in precision engineering, our Portuguese colleagues have made a considerable contribution to Leica Camera’s success story.” Andreas Kaufmann, Chairman of the Supervisory Board, Leica AG.

Corporate Income Tax Reform

Participation Exemption Regime

Dividends paid by Portuguese subsidiaries to non-resident parent companies located worldwide tax havens excluded), as well as capital gains obtained from the disposal of their shares are fully tax exempt, provided a 5% shareholding is held for 24 months.

Improved Competitiveness, Business Environment and Economic Outlook

Portugal has been improving its competitiveness. Portugal raised 15 places, becoming the 36th most competitive country worldwide1, according to the World Economic Forum’s competitiveness ranking2. Evolution of Portugal’s position in the competitive ranking of the World Economic Forum (WEF), 2010-2014:

  1. Portugal is the 14th most competitive country within the EU-28, ahead of countries such as Italy, Czech Republic and Poland.
  2. In 2014, out of 144 countries. (Source: World Economic Forum.)

Better Competitive Advantages

Better Technology - Portugal is a Top Country in providing technological services.

  • Telecom

Percentage of fiber connections in total broadband: 18.1% in Dec 2013 (above OECD average 16.7%). Ranks 7th among EU-28 countries. Portugal ranks #8 among EU-28 countries in number of high-speed fixed-broadband subscriptions per inhabitant.

  • E-Government

According to United Nations “e-Government survey 2014”, Portugal ranks #37 among 193 countries in e-Government Development Index.

  • Better Infrastructures

Portugal is the 12th country in the world with better infrastructures. Quality of Roads - 2nd among the best in the world. Portugal ranks 6th, in motorway network density, well above the OECD average. Quality of Port Infrastructure - 23rd among the best in the world1. Deep-sea port of Sines: Post-Panamax Vessels; the port of Sines was the world’s fastest growing container port in 2013 (+68%). Quality of Air Transport - 20th among the best in the world1. The Porto Airport was distinguished as the 3rd Best European Airport in 2013. Quality of Railroad Infrastructure - 23rd among the best in the world. Recently launched, the Atlantic Corridor is a rail freight line between Portugal–Spain–France. Extension to Germany is expected to be operational by November 2016.

Better Support Incentives & Grants

aicep Portugal Global is your one-stop-shop. Close to you, to take you further. AICEP is one of the Top 10 Investment Promotion Agencies that best responds to requests from investors. (Source: World Bank.)

  • Pre-Investment - Promoting a direct negotiation with companies, through which a tailored approach to incentives may be applied in order to define a global package that fully satisfies the investor’s needs.
  • Incentives Negotiation - Single point of contact in all phases: pre-investment, incentives negotiation, settling in and after care.
  • Setting in - Government business entity, flexible, free of charges and streamlined services.
  • After Care - Dynamic approach focused on the client or investor.

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