2013 Portuguese attractiveness survey

Reforms boost Portugal’s investment opportunities

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Our survey finds that foreign investors are confident in Portugal attractiveness and its business environment. The main drivers are the quality of labor, cultural proximity and shared language with emerging economies.

Investors perceive the country as more attractive than Europe as a whole, with recent reform programs. The new labor law is perceived by 73% of the business leaders surveyed as having a positive impact. Activities like manufacturing, R&D, logistics and services are seen as the ones that will attract more investments in the coming years.

Key features of Portugal’s attractiveness:

1

Confidence in the future

58% of the business leaders interviewed, Portugal’s attractiveness will improve over the next 3 years. This is the second highest result in Europe and compares very favorably with the perception of the region as a whole, with an average score of 39%.

22% of investors confirm they will invest in the country in 2014, falling by 29% compared to last year. This result is probably affected by the depressive economic situation in Europe as a whole. Investment decisions are still postponed until clear signs of recovery in the region change this perception.

In a nearly unanimous reaction, 95% of investors already present in Portugal confirm that they are definitely or very likely maintaining their activities in the country in the next 10 years. This result is especially relevant when compared to other the European average of 84% and 63% for France.

2

Investors value access to Portuguese-speaking markets

For 43% of the investors, the cultural proximity and shared language with emerging markets, namely Angola, Brazil, and Mozambique, is the key attractiveness factor.

The quality of labor and business environment complete this top 3 of the attractiveness drivers for foreign investors.

Investment intentions indicate a perception that manufacturing and services activities can be successful in addressing both European and global markets from Portugal.

3

R&D, manufacturing and logistic operations are attractive activities

Foreign investors appreciate the quality of workforce and R&D activities developed in the country.

But there’s a gap between this good perception and investor’s plans to invest. Business leaders are not planning on investing in R&D in the short term which indicates, that Portugal still need to focus efforts in promoting his success stories.

4

Reforms impact attractiveness positively

Nearly 60% of the business leaders consider the government’s reforms program as having a positive impact on the attractiveness of the country. This result is even higher for the reform of labor law, with 73% of investors considering it very or moderately positive.

Even though the quality of labor ranks 2nd in the attractiveness factors of Portugal, investors signal that additional investments are required to continuously improve the qualifications of the workforce.

The reduction of the tax burden is also identified as a key item to improve competitiveness. It will be interesting to confirm this fact, in the next edition, whether a recently approved tax reform, as well as a long term plan to reduce corporate income taxes, is deemed as appropriately addressing the issue.