Portugal has unique characteristics that put it off the radar of French investors – O Jornal Económico
France plays an important role in the Portuguese economy, because it is traditionally one of the biggest investors and because it has strengthened its position as a commercial partner. To Jornal Económico (JE), the president of Aicep Portugal Global – Agency for Investment and Foreign Trade of Portugal, Luís Castro Henriques, says that Portugal benefits from unique conditions to attract French investment, such as talent, “the business environment friendly and as good infrastructures, namely technological ones”.
How has it evolved the french investment in Portugal?
France is traditionally one of the biggest foreign investors in Portugal. According to data published by Banco de Portugal, in the period 2016-2020, net direct investment by France in Portugal showed an average positive variation of 646% (1,953 million euros in 2020, which means an increase to more than double of the amount achieved in the previous year).
The first half of 2021, when compared to the same period of the previous year, registered a recovery in both flows. In terms of stock, direct investment by France in Portugal [IDE] amounted to 11,868 million euros at the end of 2020, representing 7.9% of the total FDI captured by Portugal and placing France in the TOP 5 of foreign investors. In the same year, France accounted for 2.6% of Portugal’s total direct investment abroad [IDPE], with a total of 1,349 million euros.
By the end of June 2021, the FDI stock represented 8.3% of the total, totaling more than 12.8 billion euros, while the FDI stock already exceeded 1.4 billion euros and represented almost 3 % of the total IDPE, in the same period.
It is important to highlight the fact that French investment in Portugal is highly diversified and is currently very focused on companies in sectors such as information technology, agri-food and, increasingly, services – restaurants, real estate, business services, including start-ups that choose Portugal as their installation destination and which at the moment are more than 30.
And how have they evolved as Portuguese exports to France?
France is one of Portugal’s main trading partners. In 2014, it rose to second place in the ranking of main goods customers, a place it has maintained for the last five years.
Also in the last five years, Portuguese exports of goods to France recorded an average growth of 3.7%. In 2020, the impact of the pandemic was felt, registering a drop of 6% compared to the previous year, at a time when the bilateral economic relationship was growing and sustaining.
However, as Portuguese companies and the economy are reacting and I would highlight the fact that Portuguese exports to France between January and August of this year have already surpassed the values of 2019, having gone from 5,148 million euros to 5,462 million euros, that is, 6.1% more. Among the large Portuguese export markets, it is an excellent evolution, only surpassed by Spain (10.6% more). We are talking about important values, that is, 314 million euros more in 2021 compared to 2019, while 802 million euros rose between 2020 and 2021. It is the second biggest contribution to the global increase in Portuguese exports. All these elements consolidate France as a major client of Portugal.
The growing interest in the French market is also well reflected in the evolution of the number of Portuguese companies that export to France. In 2020, 5,381 companies exported, which meant a growth of around 6% compared to the previous year.
Factors such as the geographical and cultural proximity between the two countries, accessibility – both by road and by air – as well as the recognition of Portugal among French economic agents as a country that “manufactures well” and that “produces quality” are proof of its solidity. of the existing ties between the companies of the two countries.
France continues to be the country with which Portugal has a more favorable balance of trade in goods and services, having registered a positive balance of 4,584 million euros in 2020.
What is the importance of French companies or companies owned by French entities in the development of the Portuguese economy?
Portugal has unique characteristics that have placed the country on the radar of French investors.
The quality of talent (technical qualifications and knowledge of foreign languages), the friendly business environment and the country’s good infrastructure, including technological ones, as well as measures to promote economic activity and support foreign investment, carried out in the last few years, have given rise to a growing interest of French companies and groups, large and small, and from various areas, including aeronautics, energy, transport and communications, information technologies, digital, components for the automotive industry, agrifood, distribution, among others .
It is estimated that around 750 companies with French capital will be attracted to Portugal.
In addition to the aspects already verified, it is worth mentioning the growing promotion of investments carried out by French companies led / founded by Portuguese or Portuguese descendants.
Does the Portuguese economy have a competitive business environment to attract foreign capital at an industrial and service level?
Fostering an attractive business environment is essential to stimulate new investments, including foreign direct investment, in order to increase the preference and growth of the Portuguese economy.
Portugal has been making an effort globally that has translated into an improvement in the business environment for companies.
For example, even in the pandemic year of 2020, Portugal entered the top 10 of the most attractive countries for FDI, according to the EY Attractiveness Survey Portugal 2021, which assesses the perception of foreign investors regarding the country’s attractiveness as a foreign investment destination . In the World Bank’s “Ease of doing business” ranking, Portugal is ranked 39th among 190 economies in terms of the ease of doing business, maintaining the same place it had in 2019 [estava em 34º, em 2018].