Portugal is now in the limelight for foreign investors
Portugal is now one of Europe’s success stories. Fitting in a wider picture of a strong positive momentum of the country’s economy and outlook, companies are pouring in and the country is reaping the economic benefits of the added exposure.
Tech start-ups and digital development centres are being set up all over Portugal and hiring qualified local workers. Google has opened a support centre on the outskirts of Lisbon and creating 500 tech jobs for skilled workers, as well as BMW, Mercedes, Volkswagen, BNP Paribas, Natixis, Zalando, Bosch and Siemens, Euronext, among many others.
Expatriates working in this companies are finding a welcoming country with high-quality standards of life. Being a tolerant, open and safety society help it rank the 4th most peaceful in the world. Its privileged hours of daily sunlight, leisure offer, gastronomy, affordability, and healthcare system, contribute to make it the favourite European country for expats to live, and where they find the highest personal happiness. English is widely spoken in business, resulting in being easy to find multinational operations with Portuguese, Spanish, British and German people where English is used has the main language.
The UK investors also recognized this opportunity and are contributing to the momentum. The UK in 2018 climbed to the top position on Portugal source of foreign direct investment – ahead of China, Netherlands and Spain – with an investment flow of £711 million (€896 million), a growth of 18% vs. the previous year.
That’s why that in the loom of Brexit, the Portuguese Government is committed to maintain its ancient preferential status for Britain and its citizens, pillared from the world’s oldest active alliance, established in the Anglo-Portuguese treaty of 1373.
In April 2017, the Government of Portugal launched a temporary taskforce - Portugal IN, aimed at assisting UK businesses and citizens to integrate seamlessly in the country for operating their EU bases, in a joint work with the Portuguese Trade and Investment Agency, Turismo de Portugal and other public entities. A total of 22 British companies with 26 projects, invested in Portugal in the last two years allowing to create 1400 jobs.
The Portuguese commitment to the UK has been ratified in letter and spirt, with the Portuguese Parliament announcing a slew of measures to handle all Brexit scenarios, including Hard Brexit. The Portuguese Parliament has guaranteed to maintain all the existing rights and obligations for UK citizens residing in Portugal, subject to the guarantee of reciprocity by the UK Government regarding Portuguese nationals living in the UK.
Along the guidelines of the European Commission, Portugal will continue to consider as legal residents the UK citizens and their family members (even the non-European citizens) that fixed their residence in Portugal until the official exit date of UK, without further diligences or requirements of visas, at least until December 31st of 2020. UK citizens with residency under 5 years will be granted a Temporary Residence Card, and with the completion of 5 years will be issued a Permanente Residency card or the status of Long-Term Resident. Meanwhile, UK students currently studying in Portugal or applying to study in Portugal until 31st December 2020 will qualify as EU students until the end of their courses.
Regarding investment, Portugal IN task force foresees to work with British businesses and promote Portugal as an ideal destination for investors seeking to remain in the EU. The country offers exceptional guarantees to residents including a competitive tax environment, infrastructure, security, political and economic stability, a comprehensive health system, and access to highly qualified and innovative talent at a competitive labour cost, with the added benefits of staying in the EU and under the same time zone as the UK (GMT).
With Portugal and Britain economically interlocked, the Government of Portugal has developed a series of contingency plans for all Brexit scenarios, in order to minimise economic disruptions. Since 2017, the Government has been engaging with all major economic and trade sectors from Portugal that rely on the UK, with specific measures around technical and financial support developed, ready to be deployed to minimise the impact of Brexit on the economy. Measures developed include a line of credit of 50 million Euros to support the eventual economic impacts that some companies will face, particularly the small and medium companies. With measures to attract FDI, Portugal IN will also launch a dedicated desk where companies wishing to relocate or branch to Portugal will be provided a comprehensive support system.
With UK as the largest source of tourists to Portugal, the country also seeks to maintain a smooth and stable process for British visitors, with guarantees of visa exemption, dedicated passport control lanes, possible mutual recognition of driving licenses and access to the Portuguese health service. Along the same spirt, Portugal also recently launched #Brelcome campaign to reaffirm the country’s ongoing commitment to British citizens, with the slogan “Brelcome, Portugal will never leave you”. In one month, the campaign reached already more than 13 million people in the UK.
Looking at the big picture, investors are expressing a growing optimism on Portugal attractiveness with the majority confident it will continue to improve over the next 3 years, exceeding those of Germany, the UK or France, according to the most recent European survey by EY, a consultant company. This is a clear signal for investors to include the country in their shortlist for potential investment locations.
Bernardo Trindade is the President of the Executive Committee of Portugal IN
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