According to the International Trade Administration, “Mainland Portugal, along with the autonomous island regions of the Azores and Madeira, offers American exporters a market of approximately 10.3 million people in a country roughly the size of the State of Indiana. As a member of the European Union (EU) and the euro zone, it is fully integrated with the EU, uses the euro currency, and follows directives from the European Commission in Brussels. As with all EU countries, Portugal’s borders and ports are completely open to the free flow of trade with other EU member countries.
Portugal has a politically stable environment with a democratically elected parliamentary government and is welcoming of foreign business and investment. Portugal emerged from an extended economic crisis and successfully completed its European Union-IMF bailout program in 2014. It continued an upward trajectory in 2017, registering a record 2.7% growth and witnessing important declines in unemployment which fell to 8%. The structural reforms implemented since 2011 have created an economic and regulatory climate that is favorable to foreign investment which remains a priority for the Government with a focus on tourism, renewable energy, high quality industrial components, technology services, and value-added agricultural products”.
Regarding the purchasing power, it is important to note that the purchasing capacity is concentrated in the large urban areas of the country (Lisbon, Porto) and in some northern regions, such as Minho. In these places, there is a middle class that consumes products made in Spain. Finally, and as an element to highlight, there is a certain idiomatic intelligibility, since most of the Portuguese have some notion of Spanish and, with exceptions, if you speak Spanish you can establish an almost fluent conversation.
It should be noted that it is forbidden to export cultural goods, endangered species and war materials such as weapons, ammunition and the like.
What attractions does Portugal offer for business investment? According to Exportar en Aragon “The economic head of the embassy pointed to the labor market reforms - "one of the most flexible in Europe" -, justice, a new fiscal policy and a new leasing law. «The engine of growth is in the performance of companies. The export has gone from 26% of GDP to more than 40%, which implies a mental and organizational change in companies. The investment has also rebounded; It had fallen loudly, but it is going up”.
According to the International Trade Administration, “The United States is Portugal’s largest trading partner outside the European Union. The total amount of U.S. goods sold into Portugal is likely higher than the statistics reflect, as census data does not account for U.S. products imported into other EU countries and subsequently transported into Portugal for sale. It is common throughout the European Union for goods to be shipped to one EU location – often to take advantage of lower value added tax rates – and then to be distributed by ground transport to neighboring member state markets”.
What strengths does Portugal present when choosing it as a country to export?
- An improvement in competitiveness thanks to deep structural reforms in sectors such as banking, pensions or the labor market. It has large companies with an international presence.
- It has good performance in some industrial and innovative sectors.
- Its economy is growing.
- The unemployment rate has been reduced.
- The country rating - investment grade BBB- is improving.
- It has modern infrastructure and high quality.
- It is a tourist destination.
- It has initiated a sector and geographic diversification of exports.
- It has research and innovation capacity.
- It has lower labor costs and implemented reforms that improve the country's competitiveness.