After a decline in foreign direct investments (FDI) in 2009-2010, FDI flows recovered when investors reacted positively to the government's fiscal consolidation efforts.
The FDI is considered a priority by the Portuguese government. The country has recently embarked on the development of renewable energies, specifically solar energy (the country has the second largest solar power station in the world) and wave energy (obtained from wave movements), sectors that could provide new opportunities to foreign investors. Portugal offers a diversified economy and benefits from its membership to the European Union; however, the bureaucratic and legal burdens can be a hindrance to FDI.
|Index of Transaction Transparency*||6.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||7.0||9.0||5.0|
|Index of Investor Protection****||6.0||6.1||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||11,150||8,995||3,114|
|FDI Stock (million USD)||111,829||119,779||128,488|
|Performance Index*, Ranking on 181 Economies||68||-||-|
|Potential Index**, Ranking on 177 Economies||57||-||-|
|Number of Greenfield Investments***||38||26||45|
|FDI Inwards (in % of GFCF****)||26.1||26.4||8.8|
|FDI Stock (in % of GDP)||47.0||56.5||58.4|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
Initiatives have been taken to improve business climate such as "Cutting Red Tape" website, a repository of information for all measures taken since 2005 to reduce bureaucracy; or the "Empresa na Hora" (Business in an Hour), which allows for the incorporation of companies in less than one hour.
There are no restrictions on foreign investment in Portugal, but only an analysis of the legality of the project (applicable also to any project of national capital).
Consult the Guide for investors.
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Last Updates: January 2015