In this page: FDI in Figures | What to consider if you invest in Portugal | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
According to UNCTAD's World Investment Report 2022, FDI flows to Portugal stood at USD 8 billion in 2021, marking a 3.4% increase over the previous year but still well below the pre-COVID level (USD 12.3 billion). In the same year, the total stock of FDI stood at USD 175.5 billion. According to EY's 2022 Attractiveness Survey, Portugal secured 200 FDI projects in 2021, ranking on the eighth position among the most attractive European economies for investment (3.4% of total FDI projects in Europe). The estimated number of jobs created by these projects is 28,000. Data by OECD show that the majority of investments are directed to the financial and insurance services (21%), professional, scientific and technical activities (18.1%), real estate (8.7% - as Lisbon has become a key destination for FDI in real estate), manufacturing (8.2%), and the wholesale and retail (6.9%) sectors. The main investing countries are Spain (21.2%), the Netherlands (20.3%), Luxembourg (17.3%), France (8.1%), and the UK (6.1%). Portugal’s metalworking, auto component, and machinery industries predominate the recent FDI trends, accounting for about 30% of inflows (government figures). The latest data available from OECD shows that in the first semester of 2022 FDI inflows to Portugal totalled USD 6.1 billion, compared to USD 2.5 billion in the same period one year earlier.
FDI is considered a priority by the Portuguese government. The country has recently launched the development of renewable energies, speciﬁcally solar energy (Portugal has the second largest solar power station in the world) and wave power (obtained from wave movements). These sectors could provide new opportunities to foreign investors, so as the IT and tourism sectors. Portugal also created "free zones" to strengthen technology-driven investments. Citizenship by Investment (ARI) via Portugal's Golden Visa programme oﬀers a fast track for non-EU investors to gain citizenship. The government also launched the “Startup Visa” programme, a hosting program for foreign investors who wish to develop new projects in the Iberic country. Portugal oﬀers a diversiﬁed economy and beneﬁts from its EU member status, but bureaucratic and judicial burdens can discourage FDI. Government approval is required only in certain sensitive sectors, including defence, water management, public telecommunications, railways, maritime transportation, and air transport. The country should benefit from around EUR 16.6 billion in EU to 2026, to support its Recovery and Resilience Plan. Portugal ranks 31st out of 82 countries in the Economist Business Environment ranking.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||7,683||9,615||9,099|
|FDI Stock (million USD)||176,301||177,801||177,329|
|Number of Greenfield Investments*||115||168||278|
|Value of Greenfield Investments (million USD)||4,030||7,591||5,535|
Source: UNCTAD, Latest data available.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
|Main Investing Countries||2019, in %|
|Main Invested Sectors||2019, in %|
|Financial and insurance activities||23.2|
|Professional, scientific and technical activities||17.5|
|Wholesale and retail trade||8.8|
|Information and communication||4.6|
Source: OECD Statistics, Latest data available.
Portugal was one of the countries which was the most strongly hit by the economic crisis of the late 2000s. Thanks to a policy of rigor and the implementation of reforms of the banking sector, of pensions and of the labour market, the country has since regained an interesting economic competitiveness and has begun a deep diversification of its exports (both sectoral and geographical). Its economy has stabilised, with a GDP growth of 4% in 2022 (IMF forecasts) based on its main strengths:
The main weaknesses of Portugal's economy include:
To improve the business climate, the Government has created the "Simplex" website, an information repository containing all measures taken to reduce bureaucracy, and the 'Empresa na Hora' initiative (a company in one hour), which allows companies to incorporate in less than an hour.
|Country Comparison For the Protection of Investors||Portugal||OECD||United States||Germany|
|Index of Transaction Transparency*||6.0||6.5||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||5.3||9.0||5.0|
|Index of Shareholders’ Power***||7.0||7.3||9.0||5.0|
Source: The World Bank - Doing Business, Latest data available.
Portugal enacted a national security investment review framework in 2014, giving the Council of Ministers authority to block specific foreign investment transactions that would compromise national security.
Portuguese government approval is required in the following sectors: defense, water management, public telecommunications, railways, maritime transportation, and air transport, as well as any economic activity that involves the exercise of public authority.
Investors wishing to establish new credit institutions or finance companies, acquire a controlling interest in such financial firms, and/or establish a subsidiary must have authorization from the Bank of Portugal (for EU firms) or the Ministry of Finance (for non-EU firms). Non-EU insurance companies seeking to establish an agency in Portugal must post a special deposit and financial guarantee and must have been authorized for such activity by the Ministry of Finance for at least five years.
For further information, consult the website of the Institute for support for SMEs (IAPMEI) and that of AICEP Portugal Global - Trade & Investment Agency.
Under the Tax regime for investment promotion (Regime Fiscal de Apoio Ao Investimento - RFAI), companies that invest in certain regions can benefit from a deduction against corporate income tax otherwise payable (capped at 50% of the CIT due) of 25% (for qualified investments lower than EUR 15 million) or 10% (for the part of qualified investments exceeding that limit) of the qualified investment.
For further information, consult the website Portal dos Incentivos.
Portugal has one foreign trade zone (FTZ)/free port in the Autonomous Region of Madeira, with companies being able to enjoy import- and export-related benefits, financial and tax incentives. For additional information on Madeira’s tax regime, please visit the website of the International Business Centre of Madeira.
Other sectors attracting substantial foreign investment are:
For further information, consult the "Prominent Clusters" page on the AICEP portal.
The sectors which have been officially designated as top priorities to be developed are:
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Latest Update: September 2023