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 2024, FDI flows to Portugal stood at USD 7.2 billion in 2023, down from the USD 9.7 billion recorded one year earlier. At the end of the same period, the total stock of FDI stood at USD 195.3 billion. In 2023, Portugal had 10,705 foreign affiliates (+2.9 % vs. 2022), representing 2.1 % of non-financial companies. They employed 682,000 people and generated EUR 154 billion in turnover and EUR 38 billion in GVA, accounting for 18.5 % of employment, 29.0 % of turnover, and 27.8 % of GVA in the non-financial sector (+6.7 %, +5.2 %, and +11.3 % vs. 2022, respectively – data INE). Figures from the Portuguese Trade & Investment Agency show that the majority of investments are directed to the services sector, followed by manufacturing and energy. The main investing countries are Spain (20.2%), the Netherlands (19.3%), Luxembourg (17.7%), France (7.5%), and the UK (7%). Overall, 87% of the total FDI stock was held by EU countries at the end of 2023 (Bank of Portugal). 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 the OECD shows that in the first semester of 2024, FDI inflows to Portugal totalled USD 4.1 billion, compared to USD 1.8 billion in the same period one year earlier.
The governmental agency AICEP, which provides tax breaks and incentives for exports and investment, attracted EUR 420 million (USD 437.22 million) in investments in 2024, up from EUR 41 million in 2023. New projects included investments from U.S. semiconductor packaging firm Amkor Technology, German engineering giant Bosch, and powertrain producer Horse, a Renault-Geely joint venture manufacturing gearboxes and mechanical components in Portugal.
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 offers a diverse economy and benefits from its EU member status, but bureaucratic and judicial burdens can discourage FDI. The country imposes no legal restrictions on foreign investment, except in sensitive sectors. Foreign investors follow the same rules as domestic ones, including registration and regulatory compliance. There are no nationality requirements or limits on profit repatriation. The Council of Ministers can block investments that threaten national security, with reviews possible in sensitive sectors, including defence, water management, public telecommunications, railways, maritime transportation, and air transport, especially if the buyer is from outside the EU. The Portuguese government provides investment incentives customized to industry, investment size, and sustainability, including grants, tax credits, loan access, and reduced land costs. AICEP actively attracts global investors and negotiates terms for major projects on a case-by-case basis. Portugal signed investment agreements with more than 100 countries and ranks 43rd among the 180 economies on the 2024 Corruption Perception Index and 29th out of 184 countries on the latest Index of Economic Freedom.
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 | 2022, in % |
---|---|
Spain | 20.8 |
Netherlands | 20.0 |
Luxembourg | 16.7 |
France | 7.9 |
United Kingdom | 7.0 |
Germany | 3.7 |
Brazil | 2.4 |
Main Invested Sectors | 2022, in % |
---|---|
Financial and insurance activities | 20.7 |
Professional, scientific and technical activities | 19.1 |
Real estate | 8.7 |
Manufacturing | 7.0 |
Wholesale and retail trade | 7.0 |
Information and communication | 3.0 |
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: March 2025