Portugal

 

parque das nacoes, Lisboa
parque das nacoes lisbon

At the end of the 9th century, a small minor county based in the area of  Portus Cale was established under King Afonso III , and by the 10th century the Counts were known as the Magnus Dux Portucalensium (Grand Duke of the Portuguese). (Portucale, Portugale, Portugalia) The Kingdom of Asturias was later divided so that northern “Portugal” became part of the Kingdom of León. As a vassal of the Kingdom of León, Portugal grew in power and territory and occasionally gained de facto independence during weak Leonese reigns. In 1071 Garcia II of Galicia was declared king of Portugal and in 1095, Portugal broke away from the Kingdom of Galicia.

At the end of the 9th century, a small minor county based in the area of  Portus Cale was established under King Afonso III , and by the 10th century the Counts were known as the Magnus Dux Portucalensium (Grand Duke of the Portuguese). (PortucalePortugalePortugalia) The Kingdom of Asturias was later divided so that northern “Portugal” became part of the Kingdom of León. As a vassal of the Kingdom of León, Portugal grew in power and territory and occasionally gained de facto independence during weak Leonese reigns. In 1071 Garcia II of Galicia was declared king of Portugal and in 1095, Portugal broke away from the Kingdom of Galicia.

Portugal: Snapshot of  a Country Investors cannot afford to ignore.

Portugal is a market representing 10 million consumers. During recent years the country went through an austerity process. This process resulted in improved efficiencies in many sectors. Portugal is a member of the European Union, enjoying free access to the markets of the remaining 26 countries. Portugal as an open policy towards foreign direct investment and has put in place physical incentives both for companies and individuals.

The OECD Economic Survey of Portugal forecasts GDP growth for 2019 and 2020 of 2.1% and 1.9% respectively. The institution recognizes that the country’s economic recovery is now well established, In fact, the  GDP is now  back to pre- austerity levels. Recently the unemployment rate (now bellow 7%) has been reduced and a new growth trend is in place for investment and domestic consumption, tighter with a strengthened export sector. In fact the Portuguese economy experienced from 2009 to 2017 a rise of 60% in export volumes.

The country has a strong manufacturing basis with internationally competitive companies in areas such as pharmaceuticals, automotive, engineering, metalomechnics, ceramics, shoes and textile just to name the leading sectors. There is equally an emerging technology services sector operating in international markets (IT Integrators)

Portugal has an investor friendly business environment, noticed improvements in its educational system and has a dynamic University sector, with Universities now well ranked among the leading European institutions.  The country has pool of high qualified professional in sectors such as the Engineering sector in the health Domain.

Recently the country has noticed a trend towards new industries such as biochemical, agribusiness and the reinforcement of the service sectors such as hospitality and tourism. Lisbon and Oporto the 2 leading cities have become centers for international conventions, the most well-known one is the Web-Summit, which now takes place in Lisbon. That has attracted attention to Portugal as a possible destination for IT professionals and to European start-ups as a potential location

Portugal is a member of the Euro area and investors can benefit from the stability of the EUR and from the mechanisms to ensure the soundness of the financial and banking system. The policy makers are now working to reducing the country’s vulnerabilities to build resilience to future crises This means continuing the process of fiscal consolidation and reducing of the Public Debt.

The country is well linked with Europe with very good port infrastructures in Sines, Lisbon and Porto. Portugal is connected to the main centers by a modern web of highways among the best in Europe. Several low-cost airlines have hubs in the major cities Lisbon and Oporto connecting the country to the most dynamic cities worldwide. The country has also a modern IT and Telecoms infrastructure. The country is also among the leading investor in renewable energies

One of the major impact of the crises was to for domestic companies to look for  new export markets, especially in the emerging markets and to lead the companies to search new internationalization strategies which led to them being open to joint-ventures with international companies. Equally the companies had to place emphasis in value addition strategies and investments in quality, design and communication contributed to the growth of the export sector and to the attraction of new customer s in international service markets. The country has through a privatization process and most of the Telecoms and Utilities are now managed by the private sector and contributing to improved productivity levels

One of the key drivers of the country recovery has been the real estate sector with a strong influx from investment from overseas in the sector originating from areas such as France, UK, China, Angola and middle-east.

Due to linguistic and cultural proximity, Portuguese companies have historically established important business networks and economic ties with the Portuguese Speaking countries: Brazil, Angola, Mozambique, Cape Verde, among others.

In 2019, in the latest World Bank Ease of doing business index which ranks countries against each other based on how the regulatory environment is conducive to business operations and protections of property rights. Portugal is ranked 34 among 190 economies in the ease of doing business, according to annual. The index for Portugal averaged 31.91 from 2008 until 2018, reaching an all time high of 48 in 2009 and a record low of 23 in 2014.

The country’s good performance in global competitiveness and its economic recovery is due to the important structural reforms that have taken place in the last couple of decades in key areas such as skills, investment, export orientation, labor market, financial intermediation, and public finances.

In conclusion Portugal is a small open economy with a dynamic and advanced business environment open for foreign investors and liked to the large European and international markets by a modern infrastructure. Its secure environment couple with fiscal benefits and good prospects for return in many dynamic  such as real estate, tourism, Agribusiness or IT start-ups make it a investment location that informed investors cannot afford to ignore.