Political statute
Portugal is a sovereign republic, a unitary, democratic state governed by the rule of law, which respects the principle of municipal autonomy and the democratic decentralization of public administration. The archipelagos of the Azores and Madeira are autonomous regions with their own political and administrative statutes and governing bodies.
The central government system, often described as semi-presidential, is based on three political bodies: the President of the Republic, the Assembly of the Republic, and the Government. In addition to these, the courts are also sovereign bodies, whose formation, composition, and jurisdiction are defined in the Constitution.
The various political parties are represented by the Socialist Party, the Communist Party, the Left Bloc, the People's Party, and the Social Democratic Party. The PSD, in a center-right coalition with the PP, forms the current government following the elections of March 17th.
Recent economic trends
Over the past five years, the Portuguese economy has experienced remarkable growth, with real GDP growth of 3,6% between 1996 and 2000 (1,1% above the European average). In 2001, however, the country's economic growth slowed, largely due to a weaker international economy and a reduction in domestic demand, particularly private consumption, which suffered from declining consumer confidence.
The altered composition of growth has led to an acceleration of inflation, similar to what has occurred in other Eurozone countries. This increase has been significantly influenced by the sharp rise in prices of some food products and by high labor costs, which are above those recorded in the Eurozone as a whole.
Economic structure
As in other countries, the changes since joining the EU reflect a decline in the importance of the agricultural and industrial sectors in favor of the service and construction sectors, which, due mainly to the intensified investment effort in infrastructure for EXPO 98, strongly boosted economic activity.
Within the tertiary sector, the financial and commercial subsectors are perhaps the ones that have developed the most in recent years, as a result of the market liberalization processes that are taking place.
Currently, the modernization of the Portuguese agricultural sector has been launched, which includes the introduction of new cultivation technologies, as well as the restructuring of the industrial sector, both projects thanks to EU aid.
Commercial legislation and foreign investments
As a result of EU regulations, Portugal enjoys freedom of establishment and equal treatment for non-resident investors compared to residents. Foreign companies can be established as Portuguese companies or as branches of foreign companies, with virtually no significant differences in their tax treatment.
Within Portuguese law, the most common types of companies are limited liability companies (sociedades por cuotas) and public limited companies (sociedades anónimas), with the former being the most frequent in Portugal. The law requires a minimum of two and five shareholders, and €5.000 and €50.000 of share capital, respectively, for limited liability companies.
Portuguese legislation does not establish any sectors closed to foreign investment. However, all investments must be registered with ICEP (Investimentos, Comércio e Turismo de Portugal), both by the companies receiving the investment and by the non-residents making the investment.
Recently, a Decree Law has been published that determines the terms, conditions and procedures for granting conditional and temporary contractual tax benefits, intended for investment projects in Portugal that offer the investor the possibility of obtaining various types of tax incentives from the Portuguese State.
Foreign trade
Portugal's main exports are clothing and footwear, machinery, chemicals, sugar, leather, and paper products. Analyzing the geographical distribution of exports, Spain remained Portugal's second-largest customer throughout the year, with a market share of 18,1% during the January-July period. Germany ranked first with 19%, followed by France in third place with 12,8%, and the United Kingdom in fourth place with 10,2%.
Portugal primarily imports machinery, vehicles, agri-food products, chemicals, textiles, and clothing. Among the country's main suppliers, Spain remains the leading supplier with a market share of 25,6% in January-July. It is followed by Germany with 14% and France with 10,2%.
Any questions about this news?
Talk to Coexia, the AI of the foreign trade
International business service providers
Barcelona Free Trade Zone
Public entity for economic revitalization, operates as an engine of industrial development in the Barcelona area.read more...
VUI - One-Stop Shop
The One-Stop Shop for Internationalization (VUI) is a space for information and advice.read more...
Asturex
Asturex, Foreign Promotion Company of the Principality of Asturias, SA is a capital company.read more...
PROEXCA
PROEXCA is a public company attached to the Ministry of Economy, Knowledge and Employment.read more...
Chamber of Madrid
The International Business Department of the Madrid Chamber of Commerce supports companies.read more...
Chamber of Spain
The Spanish Chamber of Commerce is a public law corporation and advisory body.read more...