- Overview of the economy:
Portugal’s economy is a market economy with the 38th rank at the moment. Its GDP is estimated at USD229 billion.
Since joining EU in 1986, together with Spain, Portugal has embarked on a period of dramatic reforms in terms of infrastructure investment, economic growth and had more favorable conditions for development thanks to the services sector. Compared to 1970, Portugal’s gross domestic product (GDP) rose by 50-70% in 2003. Over the past two decades, Portugal has successfully privatized many of its former state-owned companies, implemented open policies in areas of the economy, including finance and telecommunications.
Portugal’s economy has grown steadily for almost two decades but its growth was at a low rate in the period of 2004-2007: 1.2%. Its budget deficit was 5% of GDP, exceeding the threshold as regulated by Maastricht Treaty. Portugal’s GDP only reached 86.8% of the European average. Compared with other Western European countries, Portugal is currently a least developed economy. Its industry is not complete with relatively old technical equipment. Its agriculture is also outdated. Its poor education system is a big obstacle for people to absorb high technologies. Portugal mainly receives investments from Asia and Central Europe. In 2008, Portugal’s GDP growth was only 0.9%, due to the impact of the financial crisis from United States and thereby spreading to other countries around the world.
– Key sectors:
The main industrial sectors are: recycled oil, petrochemical, cement, automotive and shipbuilding, electricity and electronics, machinery, paper, textile fibers, clothing, fur, furniture, pottery, food. The manufacturing sector accounts for 33% of exports. Portugal is the fifth country in the world in terms of producing wolfram and eighth in terms of wine production.
The services sector is growing rapidly, generating 66% of GDP and providing employment for 52% of the working population. The most significant growth rate is in commercial sector, due to the introduction of modern facilities for transportation, distribution and telecommunications. Financial service also brings many benefits due to the efficient privatization and contribution. Tourism is developed, generating about 5% of GDP.
The climate and the terrain of Portugal are favorable for the development of agricultural industries (development of vineyards for wine production, olive planting and cork manufacturing, etc…) and tourism service (resorts, golf courses, tours …)
Competitive capacity issues, low economic growth prospect and high public debt are driving the economy to face the crisis of the bond market. The government is implementing tightening measures to reduce the budget deficit from 9.4% of GDP in 2009 to 4.6% of GDP in 2011. However, investors are more concerned about the capacity of their nation in achieving these goals and solving debts. By not choosing economic stimulus measures, the government has been currently focusing on boosting exports and implementing labor market reforms to enhance GDP growth and improve competitive capacity issues of the economy
- Administrative procedures:
The following is a detailed summary of the legal documents that the enterprises must follow to establish and register new businesses as well as confirm legal procedures.
Before confirming the official name for the businesses, it’s needed to find and register a business name in the database available at RNPC with costs of over 31EUR within 48h, excluding Saturdays, Sundays and holidays.
RNPC is the body that certifies and approves company names, provided by the Portuguese authorities. If the company decides to use one of the names in RNPC library. The companies must obtain a RNPC certificate of approval and obtain a RNPC card for use. The certificate is valid within 90 days and can be renewed only once.
– Fee for company name acceptance is EUR 70.
– Confirmation of approved company name is EUR 56.
– Identity card (for collectives) is EUR 14.
– An additional fee is EUR 31.
Temporary taxpayers may be concurrently granted the business certificate.
– Companies must register their address (300-360 EUR).
– Register with the locality the business is performed (Free of charge).
– Report to labor management agencies (Free of charge).
– Apply for business insurance (Charge as regulated)
Leading companies in Portugal:
- Altri SGPS S.A.
Altri SGP SA is listed in PSI-20 (group of big companies holding highest capital of Portugal market, Portuguese Stock Index). Altri SGP’s business lines are mainly production of wood, paper and energy cooperation.
AutoEuropa is a company of Volkswagen Group, established in 1991 with 50% of Volkswagen’s equity and 50% of Ford’s equity. Its revenues account for 2% of GDP and 10% of its export output.
- BP – British Petroleum Company
Cabovisão is a telecommunications corporation that specializes in providing cable TV services, internet broadband access and telephone.
Cimpor (Cimentos de Portugal) is a cement producer. It is the largest cement corporation in Portugal and ranks 10th in the world. The company is present in 13 countries: Portugal, Spain, Morocco, Tunisia, Brazil, Turquia, Cabo Verde, China, Mozambique, Greece, Peru, South Africa and India.
- Confina – The largest media company in Portugal. Confina owns many subsidiaries, many newspapers, magazines, TV channels such as Correio da Manhã, Record, Meia Hora, Flash!…
- CTT – Portugal Post Company, is known as a corporation specialized in providing telephone, mail and telegraph services.
- EDP – Energias de Portugal (formerly known as Electricidade de Portugal) is the leading energy company in the Ibérica Peninsula, listed in PSI-20 group. Currently, the group has been present in Portugal, Spain, France, USA, UK, Italy, Belgium, Finland and Brazil.
- Galp Energia – Portugal’s oil and Gas Company, which holds nearly 33% of ENI and nearly 33% of Amorim Energy. It is currently Portugal’s largest energy company, accounting for 50% of the domestic market. Recently, the company has expanded its market to Brazil (in partnership with Petrobras and Parte) and Angola (in partnership with Sonangol).
- Pestana is a Portuguese group specializing in tourism with a chain of hotels named PH & R – Pestana Hotel and Resort. Pestana Group has more than 38 hotels, 6 international standard resorts, 3 golf courses, 2 ecotourism sites with nearly 6,500 rooms. Currently, Pestana has been present in Portugal, Brazil, Argentina and Mozambique, South Africa, Cabo Verde…
- Impresa is a Portuguese television corporation consisting of 6 television channels, 7 magazines, 25 newspapers, 14 online newspapers and many other television programs.
- Jerónimo Martins is a corporation specialized in food distribution and supply and industry. It hasbeen currently present in Portugal and Finland.
- Lactogal is a Portuguese company specialized in the production of dairy products.The company was founded in 1996 and is now the leading dairy company in Portugal, accounting for over 60% of total Portuguese dairy consumption.
- A Majora – Mário J. Oliveira & Irmão is a company specialized in producing toys for children and for all ages. The company was founded in 1939, based in Porto, and now has a museum displaying their products.
- Mota-Engil is a leading Portuguese corporation in the fields of construction, real estate, environment and transportation services. Mota-Engil has been present in 17 countries, is in the top 100 of European construction corporations and listed in PSI-20 group.
- Novabase is a leading Portuguese software development and outsourcing company, established in 1989. The company is granted NP EN ISO 9001 certificate by the Portuguese Quality Management Association.
- Pingo Doce is Portugal’s largest supermarket and hypermarket chain with over 370 stores.
- Porto Editora is the largest book publishing company in Portugal, founded in Porto in 1944.
- Portucel Soporcel Group is a leading manufacturer of paper and paper products. The Group owns a large woods supplying types of wood to produce paper and is well-known worldwide for its Navigator products.
- Repso YPF SA is a joint-venture oil and gas corporation with Argentina, established in 1999. It is one of 10 largest oil and gas corporations in the world, with a market share in the Americas and present in more than 30 countries.
- Founded in 1991, Semapa operates in the fields of paper and pulp, cement, development of renewable energy sources.
- Soares da Costa is a construction and Engineering Corporation, founded in 1918 and currently one of the largest construction corporations in Portugal.
- Sogrape Vinhos SA is a wine company established in 1942 by Mr. Fernando Van Zeller Guedes. The company pioneered the expansion of its production and export of Portuguese wines and is best known for its Sanderman brand.
- TAP (Portuguese national airline) is the largest airline in Portugal, established on March 14th, 1945. The airline operates flights to Europe, North America, Latin America and Africa. For the consecutive five years, it has been voted the best airline in Europe.
Some famous banks of Portugal:
- Bank of Portugal (Central Bank of Portugal)
- Sannpaolo Imi Bank (International Bank)
- Espírito Santo (Bank of the Holy Spirit)
- BAI Europe Bank
- BPI bank (Portuguese Investment)
- Investment Bank
- Santander Totta Bank
- Industrial and Commercial Bank of Portugal
- Portuguese Commercial Bank
- Portugal Finance Bank
- Global Investment Bank
- Corporate Bank of Portugal
Some credit funds in Portugal:
- Agricultural Credit Fund of Portugal
- Economic Credit Fund of Trade Association
- Socio-Economic Credit Fund
- Porto Economic Credit Fund