Why do foreigners invest in Portugal?
Why do foreigners invest in Portugal? And how much do they pay for Made in Portugal or by Portuguese trademarks? The answer to these questions largely depends on the country we want to build and the jobs we can create.
Portugal has had an admirable trajectory in attracting foreign investment. In 2021, AICEP broke the record of supported investment (2.7 billion euros) – for the third time in four years – and appropriate production and global impact brands chosen our country to invest and reinvest. Google, Microsoft, Cisco, Repsol, PSA / Stellantis, large corporations in the renewable energy industries and the electric car industry (eg BorgWarner) are such examples. Portugal, entered, in 2020, for the first time, for the 10 best Does classification promoted by the EY consultant of the EU economies that most attract foreign direct investment (FDI) projects.
Alongside this phenomenon, exports of goods – other than services – in November 2021 already surpassed the value of the same period of 2019 (pre-pandemic), surpassing, for the first time, 30% of GDP .
The central answer to the questions raised lies in two fundamental elements, in which we have been working, and which go beyond geographic determinants and natural resources: the quality of institutions and human resources. Those who look at us from the outside – and want to invest – think about profitability and efficient processes, in an institutional context (of public administrations and business environment) that must be stable and predictable, that does not consume resources in an uncompetitive way and that allows for good integration operations headquartered in the national territory in global value chains. Corporate taxation must be seen in this context, and cannot be separated from consequent and continued public policies to support investment, which encourage exports and the creation of transformed (and better paid) jobs.
Finally, talent. The most important structural reform we carried out between the end of the 20th century and the beginning of the 20th century, a profound change in the know-how, in the qualifications of the younger generations, from mathematics to English, the reinforcement of the external exclusion of our higher education institutions and scientific research, together with a huge effort in professional training and clustering of intra and inter-industry innovation processes. This is how one perceives a point of sectors where SMEs predominate – with emphasis on footwear, textiles and clothing, natural stone, moulds, metalworking or agri-food.
The external image of Portugal has been reinforced, with a perception of a country with certain accounts, with stable public policies to support investment, with functioning public services and accessories even in moments of enormous stress. And there is no doubt that this has to reach the average salary of the Portuguese, in a context in which foreign investors and exporting companies pay better, on average, for work.
In the near future, if we are not able to maintain stability, albeit always evolving, of institutions and public policies, we may see an interruption in the path of valuing the Portuguese offer and making Portugal more attractive as a destination for FDI. And, worse, not responding to the expectations of a generation that must have the opportunity to find in Portugal the future it yearns for.
Secretary of State for Internationalization