investing in portugal

2012 - Grant Thornton Consultores, Lda.

Investing in Portugal

Maria José MendesHead of Advisory servicesE [email protected]

Joaquim MendesHead of Tax servicesE [email protected]


Introduction

This document intents to give a brief introduction of Portugal as investment destination.

The main source of the information presented was AICEP Portugal Global - Trade & Investment Agency a government business entity, created in 2007, focused in encouraging the best foreign companies to invest in Portugal and contribute to the success of Portuguese companies abroad in their internationalization processes or export activities.

Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to solve complex issues for privately owned, publicly listed and public sector clients. Over 31,000 Grant Thornton people, across 100 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work.

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Grant Thornton in Portugal

Grant Thornton Portugal was established in 1998, resulting from a national company name, which started up in 1989.

We develop our works through the offices in Lisboa, Oporto and Funchal (Madeira Isle).

We provide a comprehensive range of assurance, tax, accounting and advisory services, providing our clients with practical assistance to create business opportunities and to overcome issues.

We are always acting to answer to specific needs of each clients, considering the characteristics of the several sectors where they are included.

To meet their requirements, we have specialised people to better understand and perform each assignment.


Advisory services

At Grant Thornton we offer solutions to both management teams and entrepreneurs related to the continual development andfinancial needs of their business.

As a leading consulting company in financial and business services to business entrepreneurs, our aim is to reach the mostdynamic market segments.

• strategic advice

• recover & reorganization

• valuations

• mergers & acquisitions

• due diligence

• corporate finance

• feasibility studies

• fund raising

• preparation of applications to public grants

• management control systems implementation

• advice on cross-border deals using experts based in the world's largest financial centres.


Tax services

The progressive globalization of worlwide economies, new media and technological developments have drastically changed the way business is done in Portugal and around the world. Challenges which constantly require new solutions.

At Grant Thornton we continuously work to overcome the challenges related to optimizing our tax function while also delivering personalized solutions to our clients.

• business tax planning and compliance

• indirect tax assistance

• international tax services

• employment taxes

• transfer pricing

• services for private clients

• expatriate planning

• services for private held business.

Outsourcing

bookkeeping

• tax compliance

• payroll services

• financial reporting.


Why Portugal?

To choose Portugal is to choose an exciting country, in the West Coast of Europe, to invest and buy high quality services and products. It is also the choice for a privileged, geographically strategic location, ideal for those seeking to supply the European market or expand their businesses to other parts of the world.

Portugal has great logistic and communication infrastructures with connections to major cities by air, land, sea, road or railway and our communications and telephone systems are known as one of the best and more advanced in the world.

The success of a project is also shaped by the quality of its human resources. In Portugal we have a highly skilled and talented workforce available with additional 100 thousand graduates joining the labor market briefly.

Portugal is an innovative country with a friendly economic environment and diversified regions. A wide range of services are available online to help you set up your company and tools available to advice you about the best location for your project.

And, of course, Portugal is not only a good country to invest but also a desirable place to live. You can find sunshine in most of the days helping you feel motivated and productive.


Portugal at a glance

Portugal, one of the world’s most ancient nations, is experiencing extensive and dynamic changes. From the fifteenth to the seventeenth century, Portuguese discoveries were responsible for important advances in technology, nautical sciences, cartography, astronomy and ship building. Five centuries later, Portugal is writing new pages of its history.

Our country is the homeland of companies that develop some of the finest technologies that are impacting our world. Some examples are the following:

• Portuguese technologies permit the owners of electric cars to be informed, by a text message, of the need to recharge their cars.

• solar roof tiles that absorb the sun rays that heat your house water.

• the production of the world's most efficient clean energy wind tower.

• software that allows you to purchase a ticket, by mobile phone, at the movie theater of your choice.

Portugal's profile also goes beyond innovation. It is also made of recognition that some of the best traditional products have our country as a birthplace. For example, Portuguese wine brands and olive oil brands are among the best in the world.

Portugal is also a safe country with great logistic infrastructures, advanced communication systems, and a friendly economic environment. These are some of the reasons why many world leading companies are choosing Portugal to invest. Danone is planning to install the biggest European center of drinkable yoghurt. Pescanova invested in the largest turbot production unit. Cisco is installing a “super” sales and support center and Nokia Siemens Networks inaugurated recently a new Global Networks Solutions Center. But please do note, these are just a few examples.

Furthermore, Portugal is not only a good country to invest but also a most desirable place to live. A place to visit and enjoy. You can find here a safe, environmentally responsible, with privileged nature, rich leisure and culture and with high quality healthcare facilities. Portugal is blessed by abundant sunlight and warm temperatures that, certainly, makes you feel motivated and productive.


Portugal at a glanceEconomic profile

Portugal is a founding member of the European Union and the euro zone. According to the World Bank, the Portuguese economy is the 45th largest in the world and over the past 40 years one of the OECD economies with highest GDP growth rate.

Having joined the EU in 1986, the country went through a period of strong reforms and investments, mainly in infrastructures, that contributed to a rapid acceleration in Gross Domestic Product. According to OECD, between 1970 and 2003, GDP per capita measured in Parity Purchasing Power (PPP) has grown from 50% to about 70% of the same indicator.

The structure of Portuguese economy is based on the services industry. In 2008, this sector accounted for 73.6% of gross value-added (GVA) and employed 59.3% of the working population. Agriculture, forestry and fisheries generated 2.4% of gross value-added against 24% in 1960 and created 11.5% of the available jobs. Industry, construction, energy and water generated 24% of GVA and accounted for 29.3% of the jobs created.

Over the past years, Portuguese economy has made a significant change in manufacturing moving from high dependence on textiles, footwear and others to new sectors involving larger incorporation of technology: motor vehicles and components, electronics, pharmaceuticals and new technologies. Since 2007, Portugal has increased its exports and is exporting more technology and innovative products such as pharmaceutical products.


Portugal at a glanceUnique & Strategic Location

Portugal has a unique and strategic location. Portuguese market is far larger than it may initially appear. It has 10.6 million people in the mainland and in Madeira and Azores islands, but it is also a gateway to a market of about 250 million people in the Portuguese speaking countries. And furthermore, there are 4 million more Portuguese and their descendents living abroad settled mainly in France, Germany, Switzerland, Luxembourg, US, Canada, Venezuela and Brazil.

Portuguese is the 5th most widely spoken language in the world shared by the CPLP (Portuguese Speaking Countries Community) countries like Brazil (one of the BRIC countries), Angola (one of the fastest growing economies), Mozambique, Cape Verde, São Tomé and Principe, Guinea-Bissau and East Timor.

Portugal is also an excellent entry point, or first test-market, for a foreign firm looking to get into the European Union.

Portugal’s unique location, in the West Coast of Europe, is very close to time zones of so distant countries like Russia and the US facilitating business whether you go West or East.

Key facts about Portugal's location:

� Nearest European country to the American continent time zones

� 3 hours from Brazilian, Argentine and Russian time zones

� Same time zone as UK and Ireland


Portugal at a glanceGreat communication & logistic infrastructures

Our country is very well known for being among those with some of the most advanced communication systems. Portugal ranks 7th in fastest broadband speed and 9th in terms of price according to ITIF Broadband Rankings.

Broadband Internet is spreading very fast across the country - at a rate of 24.5% - with the help of optic fibre. Portugal is ranked in the Top 20 countries with more use of optic fibre technologies.

When it comes to making businesses move, we have what it takes. By air, sea or land we have the speed you need to make your products flow worldwide. Portugal has 3 international airports in the mainland and 4 in the Azores and Madeira Islands with regular daily flights to all major world cities. There are also regular daily cargo flights from Portugal to the major hubs in Europe and Asia.

By sea, we have 9 main sea ports in the mainland, all receiving international traffic. The Port of Sines receives 38% of all cargo ships arriving to and departing from Portugal and is also one of the largest deep waters port in Europe, with virtually no operational restrictions. The second main sea port, in the mainland, is Leixões with 20% of all international traffic followed by Lisbon port with 11%. These 3 ports have regular cargo lines, linking Portugal to the North, Central and South America, Asia, Africa, Europe and Middle East and dedicated train lines to expedite goods.

Cargo rail network in Portugal, includes 4 international railway lines, and is operated by CP. There are 2 main container terminals: one at Bobadelaand the other at Leixões. Bobadela terminal is located in the outskirts of Lisbon, with direct connection to the Lisbon harbor. Leixões terminal is located inside of the Leixões harbor. Railway network includes also a logistic chain, with rail-road-ports terminals spread throughout the country to enable the transportation of goods such as construction materials, timber, agro-industrial, coal, cars and vans, fuel, and chemicals.

� 7 international airports

� Daily flights to major cities around the world

� 9 main sea ports

� 4 international railway lines

� Advanced communication system


Portugal at a glanceOur human capital

Between 1976 and 2001, the number of students enrolled in Portuguese universities grew faster than in any other European Union country, increasing by an annual average of almost 6% compared no nearly 3% for the pre-enlargement EU (of 15 countries).

Portugal has now 35% of its 20 year-old youngsters enrolled in higher education levels. To achieve this goal, public policies are investing to qualify the current workforce, stimulating the upgrade of their qualifications to the highest levels. Public policies and incentives are also encouraging companies to hire PhD graduates.

Various steps have been taken to upgrade the academic and professional experience of the Portuguese workforce over the years. Consequently, Portugal has increased the age of obligatory schooling and developed a program of international cooperation between top-level international schools and Portuguese universities.

Scientific work has also been boosted. Portuguese institutions now produce more than 7,000 scientific papers* a year compared with only a couple of hundred in 1981. In 2001. Portugal joined the restricted group of “countries of excellence” that contribute to the top 1% of the world’s most highly cited scientific publications.

Portugal has today a strong pool of workforce with high level of education in a wide range of fields, especially in Business and Administration, with high motivation and adaptability. Although we have a highly qualified and motivated workforce, our wages continue to be competitive when compared to various other EU countries.

The Portuguese workforce is particularly "language skilled". Forty-two per cent of the population can hold a conversation in, at least, one foreign language and 23% can do it in at least 2 languages. The most widely spoken language in the country is English followed by French and Spanish.

� Growing number of students enrolled in Portuguese universities

� Measures in place to keep upgrading qualifications of Portuguese workforce

� High skilled and motivated workforce with competitive wages

� Language skilled workforce

* 2009 data


Portugal at a glanceFriendly Economic Environment

If "time is money" you are immediately saving money by opening a company in Portugal. Due to the On the Spot Companies innovative system the incorporation of a new company takes on average, only 46 minutes. Far less then the average time required in the OECD countries. The procedures to set up a company, in Portugal, are not only fast, but also getting less and less expensive. The cost of set up procedures have been reduced to a quarter of the previous level.

Cut red tape (reduction of bureaucracy) as been a great concern in our country. Portugal is committed to a program to reduce red tape. Considerable work has already been achieved to ease the burden of bureaucracy for companies and citizens. We are happy to refer that we are an award winning country in red tape cutting and IMF has recognized the usefulness of Simplex program in this effort. Portugal occupies the first place in the ranking of availability and sophistication of public services online in Europe, according to the European Commission.

To build an even friendly economic environment, we have developed the PIN system to expedite the approval of investment projects that have received the “national interest” status.

� it takes just 46 minutes to set up a company

� doing business in Portugal is easy and increasingly less expensive

� PIN system expedites national interest projects


Prominent SectorsPortuguese automotive world

If you are a sports car fan or if you are among those who prefer to feel nature around you, while driving, you may have already heard names such as Sciroco or EOS. Sharan or Alhambra may also sound familiar if you like to have “everyone on board”. Though these names are “stars” in the automotive world you may not know that they are manufactured in Volkswagen AutoEuropa the flagship of the automotive sector in Portugal and also, consistently, one of the Top 5 best Volkswagen plants around the world. Manufacturing approximately 100.000 cars per year, overseas customers – namely from Germany and the US - account for 98% of total production.

Volkswagen AutoEuropa has, of course, great impact in the Portuguese economy delivering 2% of the total GDP, but the automotive sector in Portugal has 40 years of tradition, and goes beyond this example of excellence. With an annual turnover of around 4.8 billion euros, and delivering about 170.000 passenger cars, light and heavy commercial vehicles, per year, the auto sector – including car and component production - is a center pillar of the Portuguese economy. It represents 4% of the total GDP, mobilizes a workforce of about 40.000 people and is one of the main exporting Portuguese sectors.

The automotive industry in Portugal hosts 5 car manufacturers, namely, Volkswagen AutoEuropa, PSA, Mitsubishi, ISUZU and Salvador Caetano and about 200 automotive supplier companies. CaetanoBus, a Salvador Caetano group company, is, for instance, a world leader in bus manufacturing for airports and is expected to deliver in the near future the first full-electric bus.

Portuguese technical skills in this field, the highly competitive set up and running costs and our great logistic infrastructures have been a driving force in this sector. Specially, for the automotive components which has grown 200% over the past 15 years. Most of its total production is sent to international markets such has Spain, Germany, France and the UK. Portuguese companies are supplying carmakers with batteries, glass, plastic moulds, interiors, tires, metal works, cables and harnesses, car seats and electronics.

Furthermore, Portugal’s commitment in the development of a sustainable automotive sector goes even beyond developing high quality vehicles and components. As a pioneer in the development and adoption of new energy models for sustainable mobility, Portugal is also implementing the MOBI.E program.


Prominent SectorsPortuguese ICT

Back in the XVI century, Portugal played an important role in the navigation technologies field giving the world the astrolabe. Five centuries later, the country delivers another extraordinary and usefull navigating tool. A Portuguese company created the world’s first GPS navigation system with aerial photographs. Ndrive is just an example of a growing number of Portuguese companies that are demonstrating their capabilities in the High Tech world and giving a strong contribution to the business growth in the sector. Portuguese ICT market has an estimated turnover of 18.5 billion euros and generates an added value of about 5.7 billion euros. The sector has over 14 thousand companies employing a total labor force of 79 thousand people.

From financial services, to software, hardware and telecommunications, Portuguese companies have achieved a high level of excellence and international recognition with state-of-the-art products and services. Portugal's multifunctional 24/7 ATM machines make life easier for those accessing financial or public services. It is also the homeland of Via Verde, an innovative electronic system that allows to pay highway tolls and car parks or even pay gas at petrol stations without having to leave your car. Via Verde processes 500 thousand transactions per day.

Critical Software, Altitude Software, Edigma, Vision-Box, Ydreams, Siscog or Fiber Sensing - just to name a few – are some examples of this new Portuguese technological wave that is impacting major brands like Airbus or the European Space Agency. The optic fiber sensors that equip the Airbus A380 are made in Portugal as well as the biometric system that equips the Helsinki airport border control. By air or by ground, Portuguese technology is making your life easier day after day. If you are one of the 3 million passengers that use the London Underground, or the train in the Netherlands, Norway, Denmark or Finland, you are using Portuguese technology on your way to work or back home.

Also, in the transportation field, if you are planning to buy an electric car in a near future, and your vehicle sends you a text message remembering that you just have enough energy for 40 Km’s it’s Portuguese technology at work.

You may also find Portuguese technology in other day life situations. Major brands like Microsoft, Toshiba, Intel, Lockheed, Motorola, Siemens, NASA or major banks around the world have tested already the Portuguese expertise and innovative products in the ICT field transforming our country into a technological "shop" and a field to keep on innovating.


Prominent SectorsPlastic Mould Industry

The production of Plastic Moulds Industry is a high technological added sector and it is highly developed in Portugal playing an international leading role with overseas customers accounting for 80 per cent of total sales. The country is among the world’s largest mould makers, particularly when it comes to moulds for plastics.

Portuguese companies are among the first to understand that the current international market is in need of, not just plain moulds, but of complete, integrated solutions. They offer to their customers a complete service and new, innovative products, from conception and design to manufacture. Companies are fully equipped to cut the most demanding precision moulds to the highest standards, mostly tools involving multiple cavities, inserts and interchangeable parts. Portuguese firms are also pioneers in using technology that enables, for example, the injection of products with moving parts from a single mould, the use of in-mould labeling and decoration and the moulding of products combining different materials, such as hard and rubberized plastic, from a single tool.

Portuguese mould making industry had an estimated total output value of 350 million euros in 2010. Portugal exports most of its production to international markets such as Germany, France, Spain, Poland, United Kingdom and the US. In 2010, exports accounted for 318 million euro.

Portuguese moulding expertise is mostly used in the automotive industry. Almost all major carmakers like BMW, Mercedes, Volvo, Renault, Honda, Peugeot, Citroen, Volkswagen or Opel incorporate Portuguese moulds in their car models. Some cars incorporate more then 36 moulds manufactured in Portugal from bumpers, to spoilers, instrument panels or glove compartments, etc. Hence, it doesn’t come as a surprise that in 2008 about 72% of total Portuguese Moulding Industry output was absorbed by the automotive industry.

The Portuguese Plastic Mould Sector has, undoubtedly, a very high international reputation due to its technological innovation, quality, competitive prices and delivery time frames. Moreover, the expertise goes far beyond the automotive sector. Some products of daily use, like mobile phones, or suitcases, are made with Portuguese moulds. Some Nokia mobile phones or Samsonite suitcases are a few examples.

This sector is now targeting fields like aeronautics, electronics, energy and environment, healthcare and packaging, consequently, expanding its activity.


Prominent SectorsPortuguese world-class wines

It’s rewarding to know that Portugal plays a role in your moments of joy, happiness and of achievement. Whenever you celebrate and do a toast, with a glass of wine in your hand, there is a strong possibility that you’re toasting with a Portuguese wine. No matter if it is a Port, Rosé, Green, Red or White. It is a wine of guaranteed high quality.

Over the past 15 years, Portugal has become very competitive in producing world-class wines and an award winning country in this field. Not surprisingly, day after day, there are Portuguese wines winning prestigious awards around the world. Two Portuguese brands are among the world's Top 100 strongest wine brands. This helps to explain the success of Portuguese wines in International markets that accounted for a turnover of 650 million euro in 2011. Of course, Port wine plays an important role here accounting for 301 million euro.

Portugal is ranked 5th in Europe as a wine producing country. Vineyards can be found throughout the country, covering a total area of approximately 258 000 acres. The wine sector accounts for 50% of the total agricultural turnover, with approximately 13 thousand companies and employing 28% of the agricultural workforce.

Portugal's unique diversity of landscape, soil and climate conditions, together with its expertise and knowledge of grape varieties, combine to create superb wines. The wines produced in Portugal vary across regions and grape varieties creating a wide range of genuine Portuguese varieties.

To maintain the quality and authenticity of the wine, Portugal is divided into several demarcated regions, which are distinct from one another, not only in their grape varieties, but also their terroir (climate, relief and soil). The first delimitation of an area was established in 1756, under the name "Região Demarcada do Douro". These regions produce wines for different markets and price levels.


Prominent SectorsRenewable Energy

According to DBK the renewable energy production market generated, in Portugal, a total revenue of 680 million euro in 2008 representing a growth of almost 33%, when compared to 2007. And if one were to include the revenue of the sector as a whole "including equipment production", the revenue would be considerably higher. The DBK study emphasizes the extraordinary growth of this sector, over the last years, and the high potential still ahead.

Portugal currently has a total production capacity of 8151MW in renewable energies and plans to upgrade this capacity to over 11000 MW within two years, according to the National Energy Strategy program. Though these objectives may be considered "bold", they have been reviewed and upgraded. Eight new dams will be built and many others will be upgraded. Portugal is transforming clean energies into opportunities.

New projects may flourish, as experts indentify new possibilities. Experts say that Portugal has a 2500MW generation capacity in offshore wind-energy waiting to be exploited and there are already projects to target this source. Floating wind farms are currently been tested.

With the support of a public program, a large number of investments are also being made by individuals in their homes, installing micro-generation solar panels that will also allow the house owners to heat sanitary waters and to sell to the state electric company the excess of energy created consequently reducing dependency on fossil fuels such as gas. Portugal is, indeed, blessed by sunlight. The total annual sun exposure, in the mainland, varies from 1800 to 3000 hours. This abundant and delightful sunlight has also inspired the construction of many photovoltaic plants in the country and among them is the Moura photovoltaic power plant – considered one of the world’s largest photovoltaic power plants - with an installed capacity of 46,1 MW.

This commitment with clean energies is boosting investments in R&D and developing a new and innovative industry. Two Portuguese Universities, along with some of the finest companies in the ceramic industry, are developing the “Solar Tiles Project” which aims to produce electricity from solar energy utilising "simple" roof solar tiles "instead of the traditional solar panels".

The Portuguese expertise in the clean energy field extends also to wind towers manufacturing, turbines assembling, photovoltaic and wave energy solutions. The world's most efficient wind tower is manufactured in Portugal and exported overseas. Portuguese photovoltaic solutions are being installed in foreign markets and increasing excellence levels in this field. Portugal has the most automated solar panels factory and also one of the world’s largest solar panels factory.


Prominent SectorsRenewable Energy

Key facts:

� world’s most automated solar panels factory and one of the world’s largest solar panels factory are based in Portugal.

� roof solar tiles are being developed

� Portuguese company CaetanoBus is developing a full-electric bus

� Portugal is the home of one the world’s largest solar energy plants

� Portugal exported more energy than imported due to hydro and wind power.

� energy sector will create 121 thousand jobs until 2020.


Prominent SectorsShared Services Centers

Portugal has 450 companies working in the Shared Services Center sector generating a turnover of 1.3 billion euro witch represents about 1% of total GDP. Among these companies are well known leading brands like Cisco that has already 3 Shared Services Centers based in Portugal. After Hercules and Liberty, the company has just started a new SSC in the country. The same goes to Nokia Siemens Networks that has just inaugurated its second Global Network Solutions Center. Why? “We see Lisbon as a wonderful location to invest” said Jim Blum, Cisco’s Inside Sales Director in a Portuguese Newspaper. This statement helps to explain why a growing number of companies are choosing Portugal to invest in SSC, why the industry is showing a two digit growth over the last 4 years and is expecting to keep this track on the coming years. Portugal has a great location, installed expertise, advanced communication systems and low installation and running costs, namely, very competitive labor costs, when compared with other countries competing in this sector.

Portugal has a skilled and talented workforce and a high number of graduates, specially, in study fields like Business and Administration which enables a SCC, installed in Portugal, to have a wide range of competencies. Also, Portuguese people are known for their second language skills. A considerable percentage of Portuguese are able to hold a conversation in a language other than their mother tongue. At least 42% can hold a conversation in one foreign language and 23% can do it in, at least, two languages.

Widely known is the fact that Portugal has one of the best and more advanced communications and telephone systems in the world helping to turn the work flow in a SCC very fluid. Internet costs in Portugal are considered to be low and the band width very high.

Due to the above mentioned, Portuguese added value assets, it is not surprising why many SSC's are already based in our country. The Phone House, Adidas, Cisco, 3C, Solvay, IBM BTO, Nokia Siemens, Microsoft, Santander, Fujitsu Services, Reditus, HP, Netjets, SAP, PT Pro – just to name a few - are some examples of companies that already discovered our country’s strong arguments to host Shared Services Centers.

The Portuguese Shared Services Centre Market is growing and the new centers recently established in Portugal prove that we remain competitive. According to the latest IBM-PLI SSC Monitor, Portugal represents 2% of the SSC market and is included in the third wave location trend.


Prominent SectorsCork world

When it comes to cork the first thing that comes to mind is Portuguese wines and bottles buffered with cork stoppers. It’s natural. Great products come to mind very easily and get greater when together. What you probably don’t know is that cork not only plays a role in your moments of pleasure, but as well in your comfort. It may surprise you that Airbus is replacing most plastic and rubber parts in aircrafts fuselage by Portuguese cork to increase safety conditions of the equipment and comfort of passengers and crew. The usage of cork in aircraft building is just one of the innovative applications of this environment friendly industry where “nothing is wasted, everything is transformed”.

Due to its characteristics, cork is much more then “just” a stopper. Cork is resistant, light, flexible, compressible and is an outstanding thermal and acoustic insulator. With this profile cork has a wide range of uses and may come into your life very easily. It is transformed into floor panels, decorative home or office applications, shoe soles, works of art, fashion articles, complements or accessories. Surprise yourself: cork can turn into a beautiful wedding dress, or into applications for highly demanding industries like automotive, space, aeronautical or military industries. When the European Space Agency launches the first European mission to Mars, in 2018, the Portuguese cork will be present in the spacecraft to be used.

Cork has also chemical or pharmaceutical uses. Even the cork dust is used to produce energy. Not surprisingly leading brands like Moet&Chandon, Rolls Royce, Boeing, Airbus, NASA and Ford prefer Portuguese cork.

Cork is an important economic asset for our country. The Economist magazine has once compared cork to African diamonds and Middle East oil with the added-value that cork is truly clean and renewable. No doubt it is precious.

Portugal is the world leader in cork production, with an average annual output of 157000 tons, and holds 60% of worldwide exports representing an annual turnover of about 850 million euro. Cork stoppers represent, of course, the bigger share of this total with about 590 million euro followed by building materials with about 177 million euro. France, Spain and the US are the main foreign markets for Portuguese cork.

Cork industry is highly developed in Portugal. There are approximately 800 companies operating in the industry, mainly in the north of the country, mobilizing a work force of 12 thousand people. These companies operate in cork activities such as preparation, manufacture, agglomeration and granulation.


Prominent SectorsGrowing aeronautical cluster

You know that in the aviation business security and demand are the most important assets of a company. That starts from the very beginning of aircraft building and goes on during the life of an aircraft with high quality maintenance. Well, you can find it all in Portugal. Major aircraft manufacturers already did. Airbus relies on Portuguese expertise in very sensitive issues like sensors. Airbus A380 is built with optic fiber sensors manufactured in Portugal. You also know how comfort can be decisive on passenger’s opinion about an airline. Airbus is relying on Portuguese cork to take care of that issue and keep customers happy. Cork has an outstanding thermal and acoustic isolation capacity and Portugal is a leading supplier.

From electric switchboards to Airbus 340 to helicopter tails or even structural components for Airbus A320, A330 and A340 and Embraer145, 170 and 190 airliners and also components for fighters, a wide range of aircraft components are manufactured in Portugal. Others can begin to be manufactured like moulds where our country is internationally recognized.

Portuguese expertise in aeronautical industry includes also high tech management systems. You know, or you can guess, how expensive aircraft parts can be but also how essential they are to keep an aircraft in good shape. The best commitment would be to have those parts “just in time”. That’s why management systems are being developed in Portugal to suite this need collecting information on aircraft components status in order to anticipate when it will need intervention allowing a better fleet planning.

With all this expertise available it’s not surprising that the third largest aircraft manufacturer, Embraer, is coming to Portugal to install a 148 million euro project in Évora. It will be the base of an aeronautical cluster that is emerging in our country. A key project may turn out to be the KC-390 program to build a military transport aircraft that may involve about 16 Portuguese suppliers. It will be the kick-off on a new stage in the industry in Portugal that is, already, internationally recognized in the aircraft maintenance field by having top-level standards and full-service expertise. Not only in airliners but also in military aircrafts. Major airlines and worldwide Air Forces trust their million euro jets to Portuguese maintenance.

Portugal also manufactures high tech or value for money light aircrafts for your pleasure or business.


Prominent SectorsPortuguese biotechnology industry

Over 40 companies, most of which created between 2001 and 2006, are attracting international attentions over the biotechnology industry in Portugal. With a strong focus on R&D, and millions of euros invested, these companies work – in some cases – in different areas of activity and are developing, among others, pharmaceutical products that help to improve your quality of life. Most frequent area of activity, in the Biotechnology industry in Portugal, is Healthcare & Medical followed by Agro-food and Environmental Biotechnology. Knowing this, projects in Healthcare & Medical areas arise naturally.

Zebinix may sound a strange name, but it is the first medicine, totally developed in Portugal, to help heal cases of epilepsy, and approved by FDA (US Food and Drug Administration). This new product is the result of 15 years of research, by BIAL over the central nervous system and cardiovascular system.

Other fields of research are also been targeted by Portuguese expertise like oncology and liver diseases. Biotecnol has a series of antibodies in preclinical development directed at subtypes of breast cancer and kidney and also two products targeted at non-solid tumors. Biotecnol is also developing, in partnership, a medicine to treat certain liver diseases such as acute hepatitis and liver transplants. Other example comes from Alfama. The company is developing a new therapeutic approach based on the controlled administration of carbon monoxide. This new approach may be used in the prevention or treatment of almost any disease that involves inflammation, vasoconstriction or cell death, and also in some infectious diseases. In addition, Alfama is also focused in areas such as acute hepatitis and multiple sclerosis. These are just a few projects involving Portuguese companies. Many others are ongoing such as the cryopreservation of stem cells from umbilical cord blood that can be used in the future treatment of a number of diseases during the life time of the newborns and of its relatives.


Prominent SectorsPortuguese biotechnology industry

Portugal proudly underlines these achievements in its Biotechnology industry as a result of private massive investments in R&D and the support of public policies that are creating a more conductive environment to the development of the sector. Our country has Research and Development Centers of excellence, highly qualified human resources and the infrastructures needed to create this favorable environment.

Biocant Park is one of these favorable conditions. This first Portuguese Biotechnology park, was launched in 2005, and is now hosting 15 companies linked to research in the Biotechnology field. Biocant Park has just inaugurated a second building and its expansion plans considers 3 other buildings, in a near future, to host other projects in this sector bringing along additional 150 highly qualified researchers. Portugal has, indeed, a strong pool of qualified work force that Biocant Ventures stimulates to go forward with new projects assuming the role of business angels by financing the initial stages of projects until they become companies.

Portuguese scientists are highly qualified, with solid academic background, and are internationally recognized because of their academic work at foreign universities and also because of their achievements in the biotechnology field. For example, Portuguese scientists are leading the production of a hybrid technology that combines the engineering of materials with biotechnology to produce human tissue in laboratory. Again, please do note, this is just an example of Portuguese expertise in this field.


Prominent SectorsTourism and leisure

Tourism and leisure is one of the most important sectors in Portuguese economy representing 9,2% of GDP and 8,2% of the employment.

The commitment with the development of tourism and leisure sector has driven the government to defines a strategy and action plan for the sector, based on quality, competitiveness and sustainability of its supply – PENT (National Strategic Plan for Tourism).

This plan is based on 11 strategic areas:

� Products, Destinations and Poles: structure and development of proposals for consumption, in the view of the customer, supported on the natural vocation of each destination

�Areas of Tourist Interest: a multidisciplinary and multi entity to improve the urban quality, environmental and landscape planning

� Distinctive and Innovative Content: Portuguese traditional content development, associated with the History, Culture, Literature or Music, which allow the existence of distinctive and innovative experiences

� Projection International Events: promotion of cultural, entertainment, sports or leisure initiatives that enhances the customer value proposition and brand image

� Air Accessibility : increasing air accessibility approaching Portugal to the great emitting centers of tourist flows

� Brands, Distribution and Promotion: marketing activity addressed to target segments for origin market, based on the communication of a differentiated value proposition

� Quality Program: implementation of a system for touristic quality in line with the demanding international quality standards

� Excellence in Human Capital: provide the country with expertise and trained human resources

� Knowledge and Innovation: the incorporation of knowledge and innovation in productive activity

� Effectiveness of State-Business Relationship: launch of a culture of supporting the investor and investment

� Business Modernization: strengthening the competitiveness of companies


Prominent SectorsTourism and leisure

Portugal is amongst the best places to travel either for holidays or business

� European Consumers Choice voted Oporto as best touristic destination in 2012

� Portugal ranked in 15th for world's best performance for business tourism segment in 2010 (source ICCA – International Congress and Conventions Association)

� Lisbon has been nominated for the World Travel Awards (WTA), the "Oscars" of the tourism sector in the categories "Best Destination World," "Best World Cruise Destination" and "Best World Cruise Port"

� British travel magazine Lonely Planet ranked Lisbon on Top 10 cities for holidays with children

� Twice voted the world’s best golfing destination, Portugal has more than 70 golf courses, 10 of which in the top 100 of Continental Europe

� Portugal has 850km of Atlantic beaches, with sunshine all year round.


Grant Thornton Consultores, Lda.

Edifício Amadeu Sousa CardosoAlameda António Sérgio, n.º22 – 11ºMiraflores1495-132 AlgésT. 00 351 21 413 46 30F. 00 351 21 413 46 39E. [email protected]. www.grantthornton.pt

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