Portugal captured 65 foreign IT investments in 2021 and 80% are innovation or service centers – Business
In the last years Portugal has assumed itself as a privileged destination for investments in competence, service or international innovation centers, which supports activities in the most diverse sectors. After slowing down by the pandemic, the pace of investments accelerated again and, as the EY Attractiveness Surveyin 2021 Portugal was the 8th European country to achieve (more new foreign direct investment projects). The place selected when representing a two-sided upgrade.
In this period, Portugal managed to capture 200 international projects30% more than in 2020, with an impact that extends “to the vast majority of sectors of the Portuguese economy”, as explained Miguel Cardoso Pinto, Leader of EY-Parthenon. In this universe, technology services lead. Next are manufacturing and logistics. It is also worth noting that, in Europe, foreign direct investment grew by 5% between 2020 and 2021.
Returning to Portugal, and in terms of technology, over the past year, 65 new foreign investments were announced in the areas of software and IT servicesmainly from the USA, France, Germany and the UK, which will give rise to at least 14,700 new jobsby EY’s accounts.
The Lisbon region is the destination of the vast majority of these investments (71%), which are distributed in a way, among projects of companies that already arrive in Portugal and reinforce the bet on the local market, “what proves Portugal’s attractiveness, both for new players and incumbents”, highlights Miguel Cardoso Pinto.
The data collected by EY, in the study revealed this Wednesday, can also see that activities with greater representation in the context of this sector are R&D – competence centers, technological hubs or centers of excellence, for example, and Business Services. Two typologies represent 80% of the total number of projects announced and are intended to create at least 11,400 new jobs.
With regard specifically to the Business Services area, these represent 15% of foreign investment projects in Portugal last year, out of a total of 30 projects, which must represent 8,000 new jobs, 80% related to software or IT services.
As Ana de Carvalho, deputy director of AICEP, emphasizes, “Portugal has been increasingly a preferred destination for [para este tipo de estruturas]with a particular focus on Shared Services and Information Technology operations”.
Taking the 2020 data as a reference, a person in charge points out that in recent years, an annual growth rate of this type of operations has been around 15%, and it is estimated that Portugal already hosts more than 190 international operations. Together, they will represent more than two employment services and a set of services, representing 7 people, with 7 people providing IT software services.
Half of FDI spending in 2021 comes from IT projects
A theme that is often associated with resources is the real value for these investments/create in the type of absorption, generation and knowledge capacity.
Ana de Carvalho highlights that the international centers that exist in Portugal “are, for the most part, of high added value – 85% of employees have higher education – new solutions and products from software, data analytics, cloud, Artificial Intelligence, Mobility, Cybersecurity, Blockchain, Digital Transformation and others”. Among the largest, in terms of number of associated employees, stands out AICEP, intelligence centers by Altice, Bosch, Capgemini Engineering Critical TechWorks, BNP Pariba Group, Cisco, Microsoft, Natixis, Nokia, Vestas, Vestas, Vestas, Vestas.
Opening the lens again, to all FDI projects that Portugal managed to capture in 2021, EY estimates that the 200 announced will generate at least 28,600 jobs (three more than in 2020) and a capital expenditure of more than 8,000 millions of euros. O IT sector will be responsible for more than one of these jobs and for almost half of the total of announced IDE projects. It also revealed that, in the 200 foreign investment projects that Portugal raised in 2021, 21% were R&D projects and, of these, 42 (67%) are linked to the areas of software and IT services.
Investment in Portugal is on the agenda but the tax burden is discouraging
For the coming years, expectations are equally encouraging. “What we have been noticing is that Portugal has been positioning itself better and better in several investment rankings”, admits Miguel Cardoso Pinto. This year, therefore, the expectation is that foreign investment will continue to grow, although the geopolitical situation does not yet allow for a forecast for 2022. “Still, as IT areas continue to be in high demand and we haven’t noticed, so far, any drop in investment intentions”, concludes the official.
The consultant’s study even shows that, among the foreign companies consulted, 62% have plans to invest or increase investments in Portugal in the next 12 months and three-fifths will become attractive for investment that Portugal will become an even more attractive destination in the coming years attractive in Europe.
Explaining the preference for Portugal are the arguments that are already known.
“Portugal provides a balanced return on investment, with a competitive cost for engineering, technical skills or inferior quality specialists, in a favorable location, with reduced geostrategic and security risks”, such as the location of Ricardo Nunes, CFO Siemens Portugal.
The German company was one of the first to make this type of investment in Portugal and is also one of the companies that has increased and diversified this investment the most, for centers in different areas.
The challenges also exist and the evolution of the market in recent years has highlighted some, in the area of IT talent, for example. “It is undeniable that with the new of remote work, it becomes more difficult to guarantee the maintenance of deadlines compared to other tax paradigms with a lower burden”, recognizes Carlos NevesHead of Portugal Global Delivery Center at Fujitsu.
But it is also no less true that Portugal has conditions and arguments to talented foreign qualified and this is already happening on a significant scale, trends that you can get to know better in the other special articles, which will be released throughout this Wednesday.