As one of the safest and most business-friendly countries in the world, Portugal offers the best conditions for a business relocation, business expansion or start-up. Low wage and non-wage costs, affordable energy costs, investment protection and political stability make Portugal the preferred choice in the EU.

Portugal defies the global economic headwind: the currently difficult economic situation affects Portugal noticeably less than most other EU countries. Economic performance, investments and foreign trade are increasing more strongly than expected. Portugal is proving to be safe and politically stable in these troubled times.

Key economic indicators continue to point towards an upswing. Portugal recovered quickly from the slump caused by the corona pandemic. Despite high commodity prices and international supply chain problems, the country is on a stable growth path. Portugal has only minor economic links with Ukraine and Russia and therefore feels the direct consequences of the war less than other countries.

Thanks to these circumstances, real GDP growth in Portugal in 2021 was around 4.9 % compared to the previous year. EU Commissioner for Economic Affairs Paolo Gentiloni stated that the revival of tourism will contribute to the gross domestic product (GDP) in Portugal growing by as much as 5.8 % in 2022, which is stronger than ever before.

Portugal has an internationally competitive and transparent tax framework and offers many tax incentives for foreign companies, such as tax cuts for small and medium-sized enterprises in agriculture, manufacturing and trade. Businesses that focus on renewable energy or promote globalisation receive 10-20 per cent tax credits. Similarly, Portugal also offers companies, among other things, a 20 per cent tax deduction for investments of up to €5 million, which can reduce the tax rate to as low as 5.5 per cent, compared to the normal rate of 24 per cent.

These tax incentives are part of a broader commitment by the Portuguese government to attract international investors to the Portuguese economy and to create a business-friendly environment for foreign companies. According to a report by Ernst and Young, the majority of international investors have confidence in Portugal, even more than in France, the UK and Germany.

In order to create additional attractive financial incentives for business and corporate migration, Portugal provides extensive subsidies for companies that are based in Portugal or that are establishing themselves in the country. For example, grants of more than €41.8 billion are available through Portugal's Recovery and Resilience Plan for the period 2021-2027, among others:

*) all data refer to current funding programmes
Source: EU Commission 2021

These state subsidies are intended to strengthen and expand the competitiveness of the Portuguese economy, but also to further improve the country's infrastructure in order to create and maintain optimal conditions for Portugal as a business location.

Portugal also offers a secure long-term environment due to its geostrategic location and excellent conditions for trade with Asia, Africa and North and South America due to its traditional maritime orientation.

You and your company can also benefit directly from the attractive combination of tax advantages and high subsidies; we would be happy to help you with this!