In this article, I will try to explain in the motivation often held by foreign entrepreneurs who to want to invest in Portugal, including those from Germany. Entrepreneurs from all over the world have invested in Portugal as a production location for their goods in recent years.

The first, and most important, reason is the economic and geopolitical stability that Portugal offers to those who invest here. This is followed by public safety and low crime rates in the country.

The second factor is the institutional support of the Portuguese State, which offers certain tax advantages to help the companies that settle here create high skilled jobs. This is followed by legal support and staff training, in which the Portuguese State also assists these companies with its specialized agencies such as the Portuguese Investment and Foreign Trade Agency (AICEP).

In third place is the large number of highly qualified professionals graduating from Portuguese universities, which are also among the best in Europe and the world. This is often not appreciated by Portuguese entrepreneurs and the business community in the same way as it is by international entrepreneurs. You can see this in the cases of large German companies in Portugal such as SAP, Bosch, Daimler, BMW, VW, Audi, and many others such as Rocket Internet, owner of the Zalando portal. There are numerous more examples, as indicated by the German-Portuguese Chamber of Commerce, which speaks of more than 650 German companies that have already invested in Portugal.

As a fourth reason, the high quality of Portuguese engineering and education is often noted. Portugal is at the forefront of Europe, with the Instituto Técnico Superior de Lisboa being among the top 17 best in Europe and the University of Porto School of Engineering being the first in Portugal to have all courses accredited by the European Network for the Accreditation of Engineering Education (ENAEE). The quality of Portuguese engineers has already been emphasized several times by German companies - above all by Bosch.

Another factor highlighted by several German entrepreneurs who have their production in Portugal is the motivational factor. In the factories of these companies, financial incentives for productivity have created an environment of employee satisfaction that puts the performance of these companies at the forefront compared to others in the same groups or areas. This is largely due to the intelligent management of these companies and the high qualification of their employees.
The sixth factor is the human capacity for creativity and development in the research of new products for the benefit of companies in close collaboration with Portuguese universities, as demonstrated by the excellent example of Bosch with the University of Minho in recent decades.

The final factor I’ll mention today is the full integration of Portugal into the European Union. The Portuguese adapt easily to new ways of working and their culture is, and always has been, linked to European identity. But the linguistic ability of most Portuguese to speak one or two languages in addition to their mother tongue is and remains the most important factor in the attractiveness of the Portuguese labor market for the settlement of foreign capital in Portugal.

However, there something that is also discussed a lot when it comes to investment in Portugal, and that we in Portugal should seriously consider. The labor laws practiced and regulated by law in Portugal are still a factor that significantly reduces the willingness for international business to invest in Portugal.

These investors are accustomed to agreeing flexible employment contracts in the interests of their employees to hire the best talent for the best jobs. With our labor laws, they often feel misunderstood and severely limited in their management flexibility, and we should seriously work on this in Portugal so that even more companies such as Bosch, Siemens, Microsoft, Google, and Cisco’s invest in Portugal.


by Paulo Lopes - Casaiberia Mediação Imobiliária, Lda

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes