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Portugal

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Government of Portugal recognizes the importance of foreign investment and sees it as a driver of economic growth.  Portuguese law is based on a principle of non-discrimination, meaning foreign and domestic investors are subject to the same rules.  Foreign investment is not subject to any special registration or notification to any authority, with exceptions for a few specific activities.

The Portuguese Agency for Foreign Investment and Commerce (AICEP) is the lead for promotion of trade and investment.  AICEP is responsible for the attraction of foreign direct investment (FDI), global promotion of Portuguese brands, and export of goods and services.  It is the primary point of contact for investors with projects over EUR 25 million or companies with a consolidated turnover of more than EUR 75 million.  For foreign investments not meeting these thresholds, AICEP will make a preliminary analysis and direct the investor to assistance agencies such as the Institute of Support to Small- and Medium- Sized Enterprises and Innovation (IAPMEI), a public agency within the Ministry of Economy that provides technical support, or to AICEP Capital Global, which offers technology transfer, incubator programs, and venture capital support.  AICEP does not favor specific sectors for investment promotion. It does, however, provide a “Prominent Clusters” guide on its website where it advocates investment in Portuguese companies by sector: http://www.portugalglobal.pt/EN/SourceFromPortugal/prominent-clusters/Pages/prominent-clusters.aspx  .

The Portuguese government maintains regular contact with investors through the Confederation of Portuguese Business (CIP), the Portuguese Chamber of Commerce and Industry and AICEP.  More information can be found at these websites:

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no legal restrictions in Portugal on foreign investment.  To establish a new business, foreign investors must follow the same rules as domestic investors, including mandatory registration and compliance with regulatory obligations for specific activities.  There are no nationality requirements and no limitations on the repatriation of profits or dividends.

Shareholders not resident in Portugal must obtain a Portuguese taxpayer number for tax purposes.  EU residents may obtain this number directly with the tax administration (in person or by means of an appointed proxy); non-EU residents must appoint a Portuguese resident representative to handle matters with tax authorities.

There are national security limitations on both foreign and domestic investments with regard to certain economic activities.  Portuguese government approval is required in the following sectors: defense, water management, public telecommunications, railway, maritime transportation, and air transport.  Any economic activity that involves the exercise of public authority also requires government approval; private sector companies can operate in these areas only through a concession contract.

Portugal additionally limits foreign investment with respect to the production, transmission, and distribution of electricity, the manufacturing of gas, the pipeline transportation of fuels, wholesale services of electricity, retailing services of electricity and non-bottled gas, and services incidental to electricity and natural gas distribution.  Concessions in the electricity and gas sectors are assigned only to companies with headquarters and effective management in Portugal.

Portugal also limits foreign investment in the provision of executive search services, placement services of office support personnel, and publicly-funded social services.

Investors wishing to establish new credit institutions or finance companies, acquire a controlling interest in such financial firms, and/or establish a subsidiary must have authorization from the Bank of Portugal (for EU firms) or the Ministry of Finance (for non-EU firms).  Non-EU insurance companies seeking to establish an agency in Portugal must post a special deposit and financial guarantee and must have been authorized for such activity by the Ministry of Finance for at least five years.

Portugal enacted a national security investment review framework in 2014, giving the Council of Ministers authority to block specific foreign investment transactions.  Reviews can be triggered on national security grounds in strategic industries like energy, transportation and communication. Investment reviews can be conducted in cases where the purchaser acquiring control is an individual or entity not belonging to the European Union.  In such instances, the review process is overseen by the relevant Portuguese ministry according to the assets in question.

Other Investment Policy Reviews

The OECD presented in February 2019 its latest Economic Survey of Portugal, including an updated macro overview and a set of policy recommendations.  The report can be found at: http://www.oecd.org/economy/surveys/Portugal-2019-economic-survey-overview.pdf 

Business Facilitation

Since 2010, the Portuguese Government has prioritized policies to increase the country’s appeal as a destination for foreign investment.  In 2007, the Government established AICEP, a promotion agency for investment and foreign trade that also, through its subsidiary AICEP Global Parques, manages industrial parks and provides business location solutions for investors.

The government has developed effective warehouse and transport logistics, especially at the Sines Port terminal southwest of Lisbon, and telecommunications infrastructure has improved.  In March 2018, construction began on an 80-kilometer railway line between Evora and Elvas, which will improve commercial transportation between the Portuguese ports of Sines and Lisbon, and the Southwestern European Logistics Platform (PLSWE) in Badajoz, Spain, reducing freight transportation times to the rest of Europe.  On January 11, the Portuguese Government launched a EUR 22 billion infrastructure investment plan for 2019 to 2030, listing 72 projects across transportation, energy and water.

Established in 2012, Portugal’s “Golden Visa” program gives fast-track residence permits to foreign investors meeting certain conditions, including making a capital transfer of at least EUR 1 million, creating at least 10 jobs in Portugal, or acquisition of real estate worth at least EUR 500 million.  Since 2012, Portugal has issued 7,208 golden visas to investors. Visa programs such as Portugal’s “Golden Visa” initiative have recently come under scrutiny in the European Union.

Other measures implemented to help attract foreign investment include the easing of some labor regulations to increase workplace flexibility and the creation of a special EU-funded program, Portugal 2020, for projects above EUR 25 million.  Finally, to combat the perception of a cumbersome regulatory climate, the Government has created a “Cutting Red Tape” website detailing measures taken since 2005 to reduce bureaucracy, and the Empresa na Hora (“Business in an Hour”) program that facilitates company incorporation by citizens and non-citizens in less than 60 minutes.  More information is available at http://www.empresanahora.pt/ENH/sections/EN_homepage   and http://www.cuttingredtape.mj.pt/uk/asp/default.asp  .

Portuguese citizens can alternatively register a business online through the “Citizen’s Portal” available at: https://bde.portaldocidadao.pt/evo/landingpage.aspx  .  Companies must also register with the Directorate General for Economic Activity (DGAE), the Tax Authority (AT), and with the Social Security administration.  The government’s service standard for online business registration is a two to three day turnaround but the online registration process can take as little as one day.

Portugal defines an enterprise as micro-, small-, and medium-sized based on its headcount, annual turnover, or the size of its balance sheet.  To qualify as a micro-enterprise, a company must have less than 10 employees and no more than EUR 2 million in revenues or EUR 2 million in assets.  Small enterprises must have less than 50 employees and no more than EUR 10 million in revenues or EUR 10 million in assets. Medium-sized enterprises must have less than 250 employees and no more than EUR 50 million in revenues or EUR 43 million in assets.  The Small- and Medium-Sized Enterprise (SME) Support Institute (IAPMEI) offers financing, training, and other services for SMEs based in Portugal: http://www.iapmei.pt/  .

More information on laws, procedures, registration requirements, and investment incentives for foreign investors in Portugal is available on AICEP’s website: http://www.portugalglobal.pt/  
EN/InvestInPortugal/investorsguide2/
howtosetupacompany/Paginas/ForeignInvestment.aspx
 
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Outward Investment

The Portuguese government does not restrict domestic investors from investing abroad.  On the contrary, it promotes outward investment through AICEP’s Customer Managers, Export Stores and its External Commercial Network that, in cooperation with the diplomatic and consular network, are operating in about 80 markets.  AICEP provides support and advisory services on the best way of approaching foreign markets, identifying international business opportunities of Portuguese companies, particularly SMEs. See more at: http://www.portugalglobal.pt/PT/sobre-nos/
Paginas/sobre-nos.aspx#sthash.aifdjkOs.dpuf
 
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13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S.  FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2017 €194.6 2017 $217.57 www.worldbank.org/en/country  

www.ine.pt  

http://ec.europa.eu/eurostat/   

Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S.  FDI in partner country ($M USD, stock positions) 2018 €2,098 2017 $2,060 www.bportugal.pt  

BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  

Host country’s FDI in the United States ($M USD, stock positions) 2018 €1,263 2017 $1,066 www.bportugal.pt  BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Total inbound stock of FDI as % host GDP N/A N/A 2017 70.8% UNCTAD data available at

https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

* Source for Host Country Data: Bank of Portugal (www.bportugal.pt  )


Table 3: Sources and Destination of FDI

Direct Investment From/in Counterpart Economy Data 2017
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $143,637 100% Total Outward $60,976 100%
Netherlands $33,470 23% Netherlands $17,216 28%
Spain $30,915 22% Spain $14,613 24%
Luxembourg $27,771 19% Angola $4,651 8%
United Kingdom $11,830 8% Brazil $3,006 5%
France $8,021 6% United Kingdom $2,768 5%
“0” reflects amounts rounded to +/- USD 500,000.


Table 4: Sources of Portfolio Investment

Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries $168,268 100% All Countries $43,251 100% All Countries $125,017 100%
Spain $25,973 15% Luxembourg $16,975 39% Spain $21,764 17%
Luxembourg $19,574 12% Ireland $6,045 14% Italy $17,677 14%
Italy $17,855 11% United States $4,702 11% France $13,220 11%
France $14,883 9% Spain $4,209 10% Germany $9,578 8%
United States $13,238 8% France $1,663 4% Netherlands $9,004 7%
Investment Climate Statements
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