Oecd Reviews of Foreign Direct Investment: Portugal

Foreign direct investment in Portugal has soared since the mid-1980s. Today, foreign enterprises constitute an important source of employment and exports in Portugal. The Portuguese government has taken a number of important steps to open its economy to foreign direct investment by removing a wide range of sectoral restrictions, replacing a cumbersome prior notification system, and offering incentives to promote investment from abroad. However, a number of restrictions remain on investment from outside the European Union, creating more opportunities to open the economy to private investors and increase competition in the Portuguese market. This study examines the role of FDI in Portugal's economy and the progressive liberalisation undertaken by the Portuguese government in its direct investment regime. It recommends additional steps that might be taken to further open the economy to direct investment and integrate Portugal more fully into the European and global economy.