Portugal Sees Strong Growth in Foreign Direct Investment

Foreign investment into Portugal has soared over recent years – effectively doubling in the space of 16 years.

According to a study released by the Bank of Portugal (BoP), foreign direct investment (FDI) represented 69% of Portugal’s gross domestic product (GDP) at the end of 2024.

That’s up from just 32% in 2008 and once again underlines the nation’s popularity among foreign investors.

FDI is the acquisition of physical capital or investment in shares in a nation’s industry from outside its borders.

Growth of FDI can boost economies, create more jobs and enhance key infrastructure.

The BoP report explained: “At the end of 2024, the stock of foreign direct investment in Portugal represented 69% of GDP, which corresponds to an increase of 37 percentage points on the amount posted in 2008 (at the start of the Great Financial Crisis) when it represented 32% of GDP. In other words, it has doubled in 16 years.”

Set in wider context, the report added that across the 27 OECD (Organisation for Economic Co-operation and Development) countries, the average stock of FDI rose from 25% to 53% of GDP between 2008 and 2024.

Within the European Union, it increased from 36% to 64%.

Portugal’s figure of 69% not only surpasses both benchmarks but positions it among the continent’s top-performing economies.

The report adds: “In effect, between 2008 and 2024, the weight of FDI on the Portuguese economy was 15% above the average of the other OECD countries.”

The increase has been credited to a combination of structural reforms, EU-backed resilience funding, and a dynamic entrepreneurial ecosystem, which has created fertile ground for sustainable growth in Portugal.

Key sectors such as renewable energy, real estate, media and international events, hospitality, technology, and healthcare are seeing strong inflows, while the country’s prime location makes it a natural hub between Europe, Africa, and the Americas.

Although the Bank of Portugal notes that the country saw a temporary outflow of €400 million in FDI during the first half of 2024, the long-term trajectory remains robust.

This short-term correction is widely viewed by analysts as a normal fluctuation in an otherwise healthy investment climate.

Investor confidence in Portugal is currently at an all-time high, with 84% of entrepreneurs surveyed by international business consultants Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK.

The EY report also revealed 77% of global executives expect Portugal’s investment attractiveness to improve over the next three years, surpassing expectations for the broader Eurozone, which are just 67% and 59% for the UK.

The recent ranking of Portugal as the second most attractive country for FDI potential in Western Europe in the Greenfield FDI Performance Index only reinforces this positive momentum.

It highlights the country’s compelling value proposition: political stability, investor-friendly regulation, favourable tax regimes, and an enviable quality of life that continues to draw both corporations and high-net-worth individuals.

Paul Stannard, Chairman and Founder of Portugal Pathways and the Portugal Investment Owners Club, said: “Investors and entrepreneurs are drawn to Portugal for its visa offerings, tax incentives, and high quality of life.

“Portugal has created a unique environment for like-minded people to be able to create sustainable investments in key sectors of the country’s economic strength, allowing value creators as well as highly qualified talent to prosper through a combination of tax incentives, quality of life, and investment.

“It’s no surprise that a recent report from EY on Portugal’s competitiveness found that investor confidence was at an all-time high compared with the Eurozone and the UK.”

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About Portugal Pathways

Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on luxury property, wealth management, and tax optimisation, including post-NHR tax regime planning, as well as private healthcare, IFICI tax incentive applications, money transfers and bespoke relocation solutions to enhance life and investments in Portugal.

About Portugal Investment Owners Club

The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.

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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.

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