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DISCOVER BUSINESS OPPORTUNITIES IN PORTUGAL BUSINESS SWEDEN 2015 Lisbon PORTUGAL; A SMALL COUNTRY WITH GLOBAL PRESENCE AND EXPECTED POSITIVE GROWTH EXECUTIVE SUMMARY Portugal consists of 10,6 million inhabitants and a BNP per capita of 18,300 EUR. The BNP growth rate was 0,4% in 2014. The public debt is expected to decrease with 4% as the unemployment rate, which already finds itself down at 13,7%. Textiles, shoes and leather contributes to the Portuguese export industry. Currently, Portugal is one of the largest textile exporters in Europe due to advanced, highly qualitative production and innovative textile materials. Several leading global companies within telecommunications, pharmaceuticals, porcelain and glass are headquartered in Portugal. Recently, Portugal was ranked as one of the top 10 countries worldwide for ICT outsourcing thanks to highly developed infrastructure, focus on engineering and IT education, language skills and the low labour costs. Portugal also benefits from strong connections with its old colonies in Sub-Saharan Africa and South America. BUSINESS SWEDEN IN PORTUGAL Business Sweden Lisbon enable business for Swedish Industry in Portugal and facilitate entrance towards the Portuguese speaking markets in Africa. More cost efficient solutions are needed in many sectors, where Sweden offer cutting edge solutions. Swedish Industry present in Portugal need a partner as Business Sweden to support their business growth in Portugal and towards markets such as Angola and Mozambique. Our prioritized sectors, ICT and Health Care and Life Science show potential for Swedish companies. Within these, we have a strong commitment towards our industry to support their business development in Portugal. Portuguese is the 6th most spoken language worldwide – do as many others: use Portugal as your door to enter the world! Jennifer Ekström Trade Commissioner Portugal BUSINESS SWEDEN 13 AUGUST, 2015 2 GETTING CLOSER TO THE BENEFITS OF DOING BUSINESS IN PORTUGAL Ease of doing business Portugal ranked 12 out of 30 EU members Strategic location on the global map with access to big markets Portugal opens the door to a market with nearly 750 million Portuguese speaking consumers, in Europe, South America, Africa and Asia Getting around and staying connected with highly developed infrastructure Easy logistical access with modern railways, roads and ports Impressing information and communication technology platform Flexible labour market to secure excellence Academically skilled work force with high proficiency in English and other languages Lower salary levels Tax incentives to boost corporate activities Government incentive to stimulate market with lower corporate income tax from 25% to 23% in 2014 with forecast of decreasing to 17%-19% in 2016 SOURCE: WTO 2015, AICEP 2015 (PORTUGUESE TRADE AND INVEST AGENCY), BUSINESS SWEDEN 14 MAY, 2013 3 POSITIVE OUTLOOK IN TIMES OF RECOVERY PORTUGAL HEADING TOWARDS BETTER TIMES FOR GROWTH DEVELOPMENT OF PORTUGUESE GDP (BILLION EUR) In 2014 the Portuguese Government announced the end of the Economic and Financial Assistance Programme PAEF. The Portuguese economy has been able to make progresses by reducing public debt, increase private consumption and increase employment rate. Portugal has over the last decades increased activity within the service sector which now counts as the most important characteristic in the Portuguese economy and contributed with 76,6% of GVA and employed 67,7% of the population. Coming from a more traditional industry, the market now focus on new sectors and technological development which is and will make an impact in its economy. Sectors such as automotive and components, electronics, energy, pharmaceuticals and IT have gained great importance to the market growth. 190 185 180 175 170 165 160 2011 2012 2013 2014 2015E 2016E SOURCE: AICEP 2015 (PORTUGUESE TRADE AND INVEST AGENCY) BUSINESS SWEDEN 13 AUGUST, 2015 4 PREDICTION OF INCREASED EXPORT IN 2015-2017 WILL BOOST THE ECONOMY IN PORTUGAL DEVELOPMENT OF PORTUGAL'S EXPORT, (BILLION USD) PRODUCTS REPRESENTING PORTUGAL'S EXPORT IN 2014 70 Machinery and tools 60 Vehicles and transport material Oil products 50 Base metals 40 Plastics and rubber Agricultural products 30 Clothing Chemical products 20 Food 10 Minerals and mineral products Pulp and paper 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Textiles, footwear, leather products Wood and cork SOURCE: WORLDBANK 2015, EUROMONITOR, EUROPEAN COMMISSION 2015 BUSINESS SWEDEN 13 AUGUST, 2015 5 A SMALL COUNTRY WITH LONG PRODUCTION TRADITION AND INCREASED EXPORTS Textiles Shoes Wine, port wine and olive oil Cork Pulp and paper Wood and furniture Glass and ceramics Plastic and moulding Fruit Automotive components Pulp and paper Cork Wine Tourism Fruit TEXTILE PRODUCTION REPRESENTS 9% OF PORTUGAL'S TOTAL EXPORTS SOURCE: AICEP 2015 (PORTUGUESE TRADE AND INVEST AGENCY) BUSINESS SWEDEN 13 AUGUST, 2015 6 SCANDINAVIAN COMPANIES THAT MOVED PRODUCTION FROM PORTUGAL TO ASIA OR EASTERN EUROPE NOW RETURN TO PORTUGAL BECAUSE OF ITS QUALITY, CLOSENESS AND PRICE COMPETITIVENESS ANA PAOLA DINIS, HEAD OF INTERNATIONAL DEPARTMENT THE ASSOCIATION OF TEXTILES IN PORTUGAL (ATP 2014) BUSINESS SWEDEN 13 AUGUST, 2015 7 PORTUGAL WAS RANKED THE WORLD’S 35TH MOST ATTRACTIVE DESTINATION FOR FDI IN 2013 THE FLOW OF FOREIGN DIRECT INVESTMENTS KEY FACTORS IN PORTUGAL'S ATTRACTIVENESS FOR FDI Billion USD 12 2004 production decreased while public deficit increased affecting the FDI 10 8 The Portuguese governments stabilisation efforts after crisis 2007-2010 Crisis hit hard and forced Portugal into strong recovery program foremost 2007 until 2011 Privatisation of state-owned companies Being ranked 25th (out of 189) in classification Doing Business 2015 by the World Bank Offering a diversified economy and benefits from its EU membership A popular Real Estate destination in 2014 6 LARGEST SECTORS OF FDI INFLOW Trade 4 Manufacturing Positive outlook and commitment to recovery program affects FDI positively 2 0 Financial intermediation Information & Telecommunication Electricity, gas and water supply 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Construction SOURCE: OECD FOREIGN DIRECT INVESTMENT STATISTICS 2014 BUSINESS SWEDEN 13 AUGUST, 2015 8 PORTUGAL IS THE FIRST STEP AND DOOR OPENER TOWARDS THE WORLD EU GDP: $18.45 tn Population: 507.4 mn Brazil GDP: $2.35 tn Population: 202.7 mn Angola GDP: $131.4 bn Population: 24.3 mn Mozambique GDP: $16.39 bn Population: 26.4 mn BRAZIL, ANGOLA AND MOZAMBIQUE ARE AMONG THE FASTEST GROWING ECONOMIES IN THE WORLD AT THE MOMENT SOURCE: WORLDBANK 2014 BUSINESS SWEDEN 13 AUGUST, 2015 9 MORE THAN 100 SWEDISH COMPANIES HAVE LOCAL ESTABLISHMENT IN PORTUGAL EXAMPLES OF SWEDISH COMPANIES DOING BUSINESS IN PORTUGAL Large sized companies Small and medium sized companies Local production activities ABB Aura Light H&M Alfa Laval Bahnhof Hästens Astra Zeneca Bluefish Pharmaceuticals IKEA Atlas Copco Infracontrol Filippa K Diaverum Seamless Nudie Jeans Ericsson H&M Trustly Acne IKEA Oriflame Sectra Securitas SKF SSAB Systemair Volvo Cars TODAY MANY LARGE SWEDISH COMPANIES ARE PRESENT ON THE PORTUGUESE SPEAKING MARKETS IN AFRICA SOURCE. BUSINESS SWEDEN BUSINESS SWEDEN 13 AUGUST, 2015 10 SWEDISH SUBSIDIARIES USE PORTUGAL AS A GATEWAY FOR BUSINESS TO SUB-SAHARA AND LATIN AMERICA BUSINESS SWEDEN PRESENCE IN LISBON IS FUNDAMENTAL TO SUPPORT THEIR INTERNATIONALIZATION SOURCE: INTERVIEWS WITH EMBASSY OF SWEDEN IN LISBON, MOZAMBIQUE AND THE MENTIONED SWEDISH COMPANIES BUSINESS SWEDEN 13 AUGUST, 2015 11 BUSINESS SWEDEN PORTUGAL IS ACTIVE IN SUPPORTING SWEDISH COMPANIES IN ALL SECTORS Other business areas Wood ICT Healthcare & Life Science Creative Industries Safety & Security Packaging Construction Utilities Chemicals Industrial Equipment & Vehicles Energy & Environmental Technology Transport Systems Food SOURCE: BUSINESS SWEDEN BUSINESS SWEDEN 13 AUGUST, 2015 12 THE MOST PROMISING SECTORS IN PORTUGAL The ICT market has an estimated turnover of 18.5 billion euros generating an added value of about 5.7 billion euros. The sector has over 14 thousand companies employing a total labor force of 79.000 people Production value of the sector forms 4% of total GDP in Portugal with 5 primary producer and 200 suppliers employing more than 40.000 workers Privatization of national freight transport CP and maintenance company EMEF, city metro transport company Carris will raise new sector investment opportunities ICT Automotive Transports Healthcare Public health care system is undergoing changes with focus to increase efficiency to cut costs. Plans to increase health tourism presents opportunities for investors Agriculture The sector represents 2 billion Euros of business volume and 16% of the total industry. Portugal aims to double and reach 2 billion EURO in exports of fruits and vegetables Investment of €220 million in wind energy projects to strengthen national renewable energy cluster in 20152016 Energy Real estate Portugal has become an attractive destination for real estate investors. In 2014 it became the 4th most popular destination for Chinese citizens. Attractive prospects in a friendly economy SOURCE. AICEP 2015 (PORTUGUESE TRADE & INVESTMENT AGENCY) BUSINESS SWEDEN 13 AUGUST, 2015 13 VISION FOR PORTUGAL WITH INCREASED EXPORTS TO PUSH ANNUAL GDP GROWTH BY 2020 Reach annual growth rate above 2% Increase employment level with 75% A selection of Portugal’s governmental vision 2020 targets Investment of 3,3% of total GDP in R&D and innovation Have a 31 percent share of renewables in energy generation Exports shall reach 52% of total GDP, and industry should account for 20% of GDP Double and reach 2 billion EURO in exports of fruits and vegetables SOURCE: MINISTRY OF ECONOMY IN PORTUGAL 2015 BUSINESS SWEDEN 13 AUGUST, 2015 14 CONTACT US BUSINESS SWEDEN IN PORTUGAL Business Sweden Rua Vitor Cordon 37, 5E 1200-482 Lisbon - Portugal T +351 214 249 780 F +351 214 171 304 [email protected] www.business-sweden.se/portugal