Bernardo Trindade, President of Portugal IN, spoke of the implications that Brexit may have in the country and highlighted the importance of foreign investment in the national territory.
The United Kingdom and Portugal are historical economic partners; However, the country has seen its important trade link being threatened by the Brexit. In view of what was happening, António Costa’s government looked at the situation as a good opportunity to attract British investment into the national territory, through the creation of Portugal IN almost three years ago.
A few months before the official departure of the United Kingdom from the European Union, in an interview with ECO News, Bernardo Trindade, president of Portugal IN, told us about the success of the project, the entry of large companies in the country and, to complete, addressed the impact that Brexit can have on the European Union and, consequently, on Portugal.
Portugal IN programme attracted companies from the United Kingdom to our country, who intend to “escape” from Brexit. Three years after its creation, what is the outcome of this project?
This project’s balance has been very positive. In 2018, the United Kingdom was the main emitter of Foreign direct investment (FDI) in Portugal, ahead of markets such as China, Luxembourg and the Netherlands, with around 900 million in transactions and over 10 billion in accumulated.
In terms of numbers, from January 2017 to May 2019, we had 35 investment projects from the United Kingdom, representing 17% of total investment projects in Portugal. In an overall view, 2018 was a record year in terms of investment projects in Portugal, with 99 projects announced. Growth trajectory that has been maintained in the first half of 2019 and again with a record, 55 projects announced and creation of over four thousand jobs.
But our work does not end with attracting companies to Portugal. In these almost 3 years of existence, we have also sought to prepare the structures of the administration to ensure a faster and more effective response in the investment processes.
Our administration has had a huge evolution in its performance to cut bureaucracy, reduce costs, and serve the citizen. Our administration wanted to look abroad, making it more attentive and friendly to the investor, tourist or foreign resident has been where we have focused much of our work.
The British community living in Portugal, in the North and South of the country, is already consistent and also helps Portugal to be seen with very good eyes by British entrepreneurs.
Was it difficult to attract the companies’ attention? Or was Portugal already well-regarded by British businessmen?
Portugal has a secular history of economic relations with the United Kingdom, which makes it easier to attract companies from that country. The United Kingdom is the main market for tourists to Portugal and the main customer of our exports. In 2018, it once again led the countries’ ranking with which Portugal had the highest trade surplus. The British community living in Portugal, in the North and South of the country, is already consistent and helps Portugal to have a good reputation with the British entrepreneurs.
Can you give us examples of companies that set up in Portugal through this project?
The decision to set up a company in a country is a lengthy and complex process. It depends on countless factors, which have an associated economic or financial rationale, and on the various entities’ intervention, public and private, central and local, with responsibility in attracting investment. Portugal IN works with all these entities to check investment processes. It’s a joint effort. We can give the example of Cloudflare, one of the most valuable cybersecurity companies in the world, which, because of this joint effort, recently invested in Portugal.
What were the business sectors that most adhered to the government’s program?
The demand for Portugal has been transversal to the various sectors, but with more focus on business & financial services, software & IT, real estate, textiles and communications. These were the sectors with the most projects announced to date.
All foreign direct investment creates jobs, brings innovation, contributes to our exports and increases tax revenue – it has a key role to play in ensuring the economic prosperity of Portugal.
Do you believe that investment from the United Kingdom is an added value for the country?
Absolutely, from the UK or other countries. The country needs foreign investment in all sectors and from all geographies. The UK is the largest recipient of FDI in Europe and the 3rd largest in the world, after the US and Hong Kong. Aware of this, Portugal IN also works the geographies that have the greatest FDI impact in that country, such as China, Japan, the United States and India. All foreign direct investment creates jobs, brings innovation, contributes to our exports and increases tax revenue – it has a key role to play in ensuring the economic prosperity of Portugal.
With the end of Brexit, what are the plans for Portugal IN?
The Resolution of the Council of Ministers creating the Mission Structure foresees that it will end its mandate on December 31th, 2019, at the end of this year. The continuity of the project will be a political decision made by this new government, also depending on the outcome of the Brexit process. But with or without Brexit, with or without Portugal IN, it is important to remember that the British market should always deserve special attention, given its weight in our economy. The important thing is to ensure that the work we have developed over these almost three years continues, especially in preparing our management structures for investment and in positioning the country on the radar of foreigners as a privileged destination for investment.
Portugal is not at the forefront of the countries that will suffer the most if the United Kingdom leaves without an agreement.
In your view, will Brexit have major repercussions on the Portuguese economy?
The repercussions of Brexit on the Portuguese economy have already been widely analysed and disseminated through a Business Confederation of Portugal (CIP) study published at the end of last year. According to this study, the impact of Brexit on our economy will vary depending on whether we reach an agreement. A hard or soft Brexit. The exit deal, that we hope will soon be achieved, will minimise the effects of Brexit on our economy. But Portugal is not at the forefront of the countries that will suffer the most if the United Kingdom leaves without the European Union agreement. Instead, it has been at the forefront of the countries that have been best prepared for Brexit. It has been so, since the creation of this structure and the approval of a Contingency Plan, which includes a wide range of measures that will make it possible to minimise the negative effects of this exit.