Portugal has largely recovered from the impact of the coronavirus pandemic. The inflation pressures felt in 2022 and 2023 are fading mostly due to the end of supply chain disruptions caused by the pandemic and the European Central Bank’s monetary policy. However, the ECB’s interest rate increases and the cooling off of demand in European markets are leading to a decline in economic growth throughout Europe.
After growing 6.7% in 2022, the Portuguese economy is projected to increase by 2.1% in 2023 and 1,2% in 2024. Exports of goods and services reached 56,293 million euros by the end of June 2023, a decline of 3,4% compared to the same period in 2022.
In 2023, investment in tourism, real estate, renewable energy, and other longer-term projects remained strong in Portugal. Despite the present difficulties, local and international investors continue to be confident in the longer-term prospects in tourism, energy, and real estate.
It is expected that the «Recovery and Resilience Plan» (Plano de Resiliência e Recuperação, PRR), supported by the European Union, will improve the performance of Portugal’s economy in the near future. The government plans to invest in 85 infrastructure projects, with €22.200 million in the transportation sector, mainly in upgrading or building new railroads and subway infrastructure, €13,060 million in renewable energy, and €7,418 million in environment-related investments. In 2023, new public funds totaling 400 million euros were established, mostly to invest in start-ups.
Portugal’s commitment to energy transition and technological developments is attracting international and local investors in solar and wind power projects. Investors are waiting for the government to open up public tenders to develop offshore wind power projects on the coast of Portugal.
In a world of many uncertainties, with wars raging in Ukraine and the Middle East, Portugal remains a safe harbour for international investors. According to the Institute for Economics & Peace’s “Global Peace Index 2023”, Portugal is one of the safest countries in the world, ranking 7th in the most peaceful countries in the World and 4th in Europe.
This guide reviews the main aspects to be considered by foreign investors looking at Portugal as a place to invest, such as how to set up a business, government incentives, employment rules, taxation, intellectual property protection, real estate, and the judicial system.
For more information, go to www.macedovitorino.com/en/Why-Portugal