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EY Attractiveness Survey: Portugal attracts record foreign direct investment (FDI)

Portugal attracted 248 FDI projects last year, 24% more than in 2021. Germany, the USA, France, the UK, and Spain are at the forefront of investment.

EY Attractiveness Survey: Portugal attracts record foreign direct investment (FDI)
EY · 14 Sep 2023

Software & IT Services, Business Services, Sales & Marketing attract the most investment, according to the EY Attractiveness Survey Portugal, which assesses foreign investors' perception of the country's attractiveness as an FDI destination.

In the EY European Attractiveness Survey 2023, which annually assesses foreign investors' perceptions of Europe's attractiveness, Portugal climbed two places in the European ranking as an FDI destination, reaching 6th position. Attractiveness is defined in this survey as a combination of image, investor confidence, and the perception of a country or region's ability to offer the most competitive benefits for FDI.

Attracting FDI: talent, innovation and sustainability

Portugal attracted 248 Foreign Direct Investment (FDI) projects, a record number for the country, placing it among the 10 European countries with the highest growth rate of FDI projects, mainly from Germany, the USA, France, the UK Spain, and others. Portugal has thus risen to 6th place in the ranking of European countries with the most FDI projects announced, registering the third highest growth in the European Union (6.7% measured in terms of GDP).

Most of the FDI carried out was in the software and IT services sector - 99 projects - of which 76 represent companies setting up operations in Portugal for the first time, reinforcing the country's attractiveness for the digital economy. Also in line with previous years of the EY Attractiveness Survey, 59% of investors expect Portugal's attractiveness to improve over the next three years.

Portugal is on the investment radar of Germany, USA, France, UK, Spain, and others

According to the EY Attractiveness Survey Portugal, Germany has surpassed the United States in terms of the number of FDI projects targeting Portugal. With 36 projects, Germany is now the top investor in Portugal. Investments from Germany, the United States, and France were mostly directed towards the software and IT services sector (39 projects), with these three countries accounting for 39.4% of all projects in the sector.

Although the six countries that invest the most in Portugal have consolidated their position, new countries are also increasing their relevance. For example, the Netherlands and Denmark have grown from four and two projects to 14 and eight, respectively.

Portugal's importance in total European FDI projects has also been increasing. Between 2018 and 2022, Portugal's relative weight in total FDI projects in Europe rose from 1.2% to 4.2%.

In addition, the jobs created in Portugal represented 6.4% of the total employment created in Europe, which means that the Portuguese market has been attracting larger projects (when measured by the number of employees).

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