Foreign affiliates showed greater resilience than domestic companies in 2020

According to Statistics Portugal (INE), foreign affiliates recorded a lower drop in activity than national companies in 2020.

On average, foreign affiliates in Portugal produce more, invest more and pay their workers better and, in 2020, were able to show more resilience to the economic impact of the pandemic crisis compared to national companies. The gross value added (GVA) of foreign affiliates shrank by 7.3% last year whereas Portuguese companies saw a drop of 11.5%.

“The GVA of foreign affiliates in Portugal decreased by 7.3% in 2020 (+13.8% in 2019), corresponding in nominal terms to a total of €24 billion. The GVA of national companies decreased by 11.5% (+3.6% in 2019),” Statistics Portugal (INE) revealed this Thursday. Most of the foreign affiliates (73.5%) are held by entities headquartered in European Union countries.

Last year, there were 9 101 foreign affiliates in the national territory (+1.6% compared to 2019), corresponding to 2.0% of the total of non-financial companies.

The average monthly remuneration per person employed by foreign affiliates was 39.9% higher than those observed in the national companies, reaching €1 414, in 2020.

According to INE, the foreign affiliates employed around 571 thousand individuals and on average, each one hired 63 workers in 2020, value significantly higher than that of national companies (6 persons).

Although in GVA they have resisted better, foreign affiliates have performed worse than national companies in terms of international trade. “Exports of goods from foreign affiliates decreased more sharply than those of national companies in 2020, compared to the previous year (-12.8% compared to -8.5%),” INE explained.