Categories: Taxation

Despite the difficulties, Portugal remains attractive

"The Portuguese&comma; Europe and entrepreneurs need to know that we have a solid financial system that we can trust for our economies and to frame investment in the Country"&period;&NewLine;Reassurance&comma; and more reassurance&comma; is the aim of Socialist Prime Minister Antonio Costa&comma; after the political upheavals the country has experienced since the legislative elections of October 2015&period; These saw the outgoing right-wing coalition come out on top&comma; but be ousted from power by an unprecedented alliance between the Socialist Party and radical left-wing formations&period;&NewLine;On March 16, Antonio Costa obtained final parliamentary approval for the budget, which he claims will enable him to tackle Portugal's "structural bottlenecks". Brussels remains suspicious, however, and has asked him to make a further 1 billion euros in savings;&NewLine;Lisbon returns to investment&NewLine;In the meantime&comma; Lisbon is gradually returning to foreign investment&period; "Investors are looking to us again&ThinSpace;&colon; we exited the international rescue package on schedule&comma; we have embarked on fundamental reforms to rebalance the accounts&comma; and we have become more competitive." explains Miguel Frasquilho, head of the Government Development Agency&period;&NewLine;The Chinese are beginning to make their presence felt&comma; by taking advantage of the wave of privatizations called for by the EU&sol;IMF&period; rescue program. In particular, they have acquired 23&comma;1 &percnt; of the capital of EDP-Electricité de Portugal&comma; 85 &percnt; of the insurer Fidelidade&comma; and of the electricity distribution network REN&period;&NewLine;France wants to continue investing&period;&NewLine;They are also by far the biggest beneficiaries of the 2,853 "golden visas"&comma; which, since 2013, have granted residence permits in Portugal - and thus free access to the markets of the 26 Schengen countries - to non-EU foreigners&comma; provided they buy a property worth at least €500,000 and keep it for five years&period;&NewLine;France is "the other investor country linked to Portugal's privatization program&comma; with Vinci&comma; in airports&comma; and Altice&comma; which has acquired the telephone operator&comma; Portugal Telecom&period; Now Portugal's second-largest customer and third-largest supplier&comma; France is keen to pursue its investments&period;&NewLine;"The training&comma; professional competence&comma; linguistic skills of the Portuguese are real assets in attracting investors&period; It's reassuring to know that we can count on a serious management team". points out Benoît Gaillochet&comma; CEO of Ardian&comma; an investment company&comma; which has just acquired 50&percnt; of Ascendi&comma; concessionaire of five freeways in the north of the country&comma; for 300 million euros&period;&NewLine;Analysts&comma; are cautious&period; "Current fiscal policy could lead to an increase in the tax burden to cover deficits in the event of slippage&comma; notes economist Nuno Garoupa, who heads a research institute&period; This could counteract the desire to simplify bureaucracy&another brake on investment"&period;&NewLine;Another observation&ThinSpace;&colon; Portugal is fashionable&comma; and attractive for real estate and tourism investment - hence the fear of a speculative "bubble"&period; In 2015&comma; the balance of trade in the sector generated a surplus of 3 billion euros&ThinSpace;&colon; a windfall for a country in crisis.&NewLine;<a href="http&colon;//www&period;la-croix&period;com/economie/monde/malgre-les-difficultes-le-portugal-reste-attractif-2016-04-21-1200754904" target="&lowbar;blank">source</a>&NewLine;

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