In recent years, FDI has contributed to job creation, innovation, and stronger global integration. Portugal has reduced market entry barriers and aligned its policies with international standards, making it easier for businesses to establish themselves. Still, many investors face challenges that slow down investment and reduce long-term economic benefits.

One of the biggest obstacles is Portugal’s complex licensing and permitting system. Administrative inefficiencies cause unnecessary delays, making it harder for companies to navigate the process smoothly. Additionally, judicial and bureaucratic delays create uncertainty, particularly in business-related legal proceedings. The taxation system, while offering incentives, remains complicated, with frequent regulatory changes that make compliance difficult. Certain sectors, like transport and professional services, also face stricter regulations than in other countries, limiting opportunities for foreign investors. Moreover, barriers to hiring international talent restrict companies from bringing in skilled professionals, further slowing business growth.

Eliminating these barriers could significantly boost FDI. Studies suggest that reducing regulatory restrictions could lead to a notable increase in cross-border mergers and acquisitions, as well as greenfield investments. While Portugal has successfully aligned with EU regulations, further liberalization—particularly in service industries and digital trade—could unlock billions in investment potential.

To make Portugal a truly investor-friendly destination, reforms should focus on streamlining business licensing and permits, improving judicial efficiency, simplifying taxation, and liberalizing key industries. Additionally, improving visa and work permit processes would allow companies to attract top global talent, increasing Portugal’s economic competitiveness.

Portugal has made great strides in attracting FDI, but sustaining and accelerating this growth requires continued regulatory improvements. Addressing these challenges will enhance investor confidence and position Portugal as a global leader in business expansion, ultimately leading to more jobs, technological advancements, and long-term economic prosperity.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes