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<NREC>Portugaltoc
Portugal: Table of Contents <A>=Portugal P O R T U G A L C O U N T R Y C O M M E R C I A L G U I D E FY'99 July,
1998 TABLE OF CONTENTS I. EXECUTIVE SUMMARY II. ECONOMIC TRENDS AND OUTLOOK MAJOR
TRENDS AND OUTLOOK PRINCIPAL
GROWTH SECTORS GOVERNMENT
ROLE IN THE ECONOMY BALANCE
OF PAYMENTS SITUATION INFRASTRUCTURE
SITUATION III. POLITICAL ENVIRONMENT NATURE
OF POLITICAL RELATIONSHIP WITH THE UNITED STATES MAJOR
POLITICAL ISSUES AFFECTING BUSINESS CLIMATE BRIEF
SYNOPSIS OF POLITICAL SYSTEM IV. MARKETING U.S. PRODUCTS AND SERVICES DISTRIBUTION
AND SALES CHANNELS USE
OF AGENTS/DISTRIBUTORS; FINDING A PARTNER FRANCHISING DIRECT
MARKETING JOINT‑VENTURES/LICENSING STEPS
TO ESTABLISH AN OFFICE SELLING
FACTORS/TECHNIQUES ADVERTISING
AND TRADE PROMOTION PRICING
PRODUCT SALES
SERVICE/CUSTOMER SUPPORT SELLING
TO THE GOVERNMENT PROTECTING
YOUR PRODUCT FROM IPR INFRINGEMENT NEED
FOR A LOCAL ATTORNEY V. LEADING SECTORS FOR U.S. EXPORTS AND
INVESTMENT BEST
PROSPECTS FOR NON AGRICULTURAL GOODS AND SERVICES BEST
PROSPECTS FOR AGRICULTURAL PRODUCTS SIGNIFICANT
INVESTMENT OPPORTUNITIES VI. TRADE REGULATIONS AND STANDARDS TRADE
BARRIERS CUSTOMS
VALUATION IMPORT
LICENSES EXPORT
CONTROLS IMPORT/EXPORT
DOCUMENTATION TEMPORARY
ENTRY LABELING
MARKING REQUIREMENTS PROHIBITED
IMPORTS STANDARDS
(E.G. ISO 9000 USAGE) FREE
TRADE ZONES/WAREHOUSES SPECIAL
IMPORT PROVISIONS VII.
INVESTMENT CLIMATE OPENNESS
TO FOREIGN INVESTMENT CONVERSION
AND TRANSFER POLICIES EXPROPRIATION
AND COMPENSATION DISPUTE
SETTLEMENT PERFORMANCE
REQUIREMENTS/INCENTIVES RIGHT
TO PRIVATE OWNERSHIP AND ESTABLISHMENT PROTECTION
OF PROPERTY RIGHTS TRANSPARENCY
OF THE REGULATORY SYSTEM EFFICIENT
CAPITAL MARKETS AND PORTFOLIO INVESTMENT POLITICAL
VIOLENCE CORRUPTION LABOR FOREIGN
TRADE ZONES/FREE PORTS BILATERAL
INVESTMENT ARRANGEMENTS OPIC
AND OTHER INVESTMENT INSURANCE PROGRAMS CAPITAL
OUTFLOW POLICY MAJOR
FOREIGN INVESTORS VIII.
TRADE AND PROJECT FINANCING BRIEF
DESCRIPTION OF BANKING SYSTEM GENERAL
FINANCING AVAILABILITY EXPORT
FINANCE/METHODS OF PAYMENT PROJECT
FINANCING LIST
OF COMMERCIAL BANKS IX. BUSINESS TRAVEL BUSINESS
CUSTOMS HOLIDAYS BUSINESS
INFRASTRUCTURE X. ECONOMIC AND TRADE STATISTICS APPENDIX
A. COUNTRY DATA APPENDIX
B. DOMESTIC ECONOMY APPENDIX
C. TRADE APPENDIX
D. INVESTMENT STATISTICS FOREIGN
DIRECT INVESTMENT INDUSTRY
SECTOR DESTINATION PORTUGUESE
DIRECT FOREIGN INVESTMENT ABROAD XI. U.S. AND COUNTRY CONTACTS APPENDIX E.
U.S. AND COUNTRY CONTACTS XII. MARKET RESEARCH AND TRADE EVENTS APPENDIX
F. MARKET RESEARCH LIST
OF AVAILABLE INDUSTRY SUBSECTOR ANALYSIS (ISA) LIST
OF UPCOMING INDUSTRY SUBSECTOR ANALYSIS (ISAS) APPENDIX
G. TRADE EVENT SCHEDULE INTERNATIONAL
COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S.
DEPARTMENT OF STATE, 1998. ALL RIGHTS
RESERVED OUTSIDE OF THE
UNITED STATES <NREC>Portugal01
Portugal: Executive Summary <A>=Portugal I. EXECUTIVE SUMMARY This
Country Commercial Guide (CCG) presents a comprehensive look at Portugal's
commercial environment using economic, political and market analysis. The CCGs
were established by recommendation of the Trade Promotion Coordination
Committee (TPCC), a multi‑agency task force, to consolidate various
reporting documents prepared for the U.S. business community. Country
Commercial Guides are prepared annually at U.S. Embassies through the combined
efforts of several U.S. government agencies. Portugal
offers an emerging market within the framework of the European Union.
Portugal's emerging market status means new opportunities and high growth
rates. European Union membership and participation in the first tier of the
monetary union mean stability and continued growth due to EU infrastructure
funds. Together they offer U.S. exporters an opportunity to do business with a
country that Business Week called a "European Tiger" and to export to
an expanding corner of Europe‑‑our largest bilateral trade partner. Since
Portugal joined the EU in 1986 its economy has gradually come alive. Portugal
has made tremendous strides in the last dozen years. A recent article in USA
Today, profiling Lisbon, stated that 500 years ago, leading up to Vasco da
Gama's discovery of the trade route to India, Portugal was at the center of
world discovery and innovation. And then it took a well‑deserved rest‑‑for
500 years! Well, this may be a little exaggerated, but ever since Portugal's
wake up call the country has been on the move. Portugal
is a great story these days. From a politically and economically isolated
nation decade ago, it has managed to transform itself into a leader at the
center of the European and world stage. Just in the past two years it has
hosted high‑level international meetings (OSCE and NATO), won a non‑permanent
seat on the UN Security Council, and opened a world exposition. The Portuguese
economy is thriving, with record highs in its stock market, low unemployment,
and a founding membership in the European Monetary Union of which its leaders
are justifiably proud. After years at the periphery of the Iberian Peninsula,
Portugal is finally fulfilling its geo‑strategic and economic potential
as the gateway to a unified Europe ‑ especially Southern Europe and
Africa. Since
Portugal's entry into the European Community in 1986, the country has undergone
a tremendous transformation. Portugal has successfully parlayed a dozen years
of well‑managed EU infrastructure funds into strong economic growth, low
inflation and substantial new foreign investment in productive capacity.
Portugal has increased its standard of living closer to that of its EU
partners. GDP per capita on a purchasing power parity basis rose to over 70% of
the EU average in 1997 from just over half of the EU average in 1986. Imports
and exports have expanded rapidly and growth during 1997 is expected to be in
the 7‑8% range for both. Exports have mushroomed over the past decade as
Portugal has benefited from the EU open market and the takeoff in imports
underscores strong Portuguese demand for foreign goods. The increasing
influence of both imports and exports show the rapid integration of Portugal
into the global economy. In
agriculture, soybeans are the number one export to Portugal in value terms (USD
83 million in 1997) followed by corn (USD 69 million). Grain exports to
Portugal (and the EU) are subject to high tariffs, but the U.S. has access to a
special Portuguese 500,000 MT corn quota for non‑EU suppliers. Policy
problems related to the clearance process for new bio‑engineered corn
varieties seeded in the U.S. have led to a temporary suspension of corn imports
during 1998. Other products that continue to have high market potential in
Portugal are cotton, hides and skins (including finished leather). Larger
than it Seems For
U.S. firms, Portugal's emergence as a full partner in Europe has meant a stable
location open to foreign investment and an increasingly attractive market for
exports. Portugal today should be viewed for what it is ‑‑ an
independent European market of 10 million which is somewhat under‑served
by U.S. suppliers since many of these firms have yet to discover the country.
As only the 33/34th largest market for the direct export of U.S. goods and
services Portugal does not frequently rank on top of the lists of new markets
to explore. But Portugal does have a number of things going for it that argue
for U.S. firms to pay closer attention: significant indirect U.S. imports;
strong trade links as the preeminent supplier to Lusophone Africa; and the
prospect for continued growth stemming in part from ongoing EU investment. Statistics
would have one believe that the U.S. is primarily involved in selling heavy
equipment, machinery and agricultural commodities to Portugal. But this is only
part of the story. The U.S. offers a strong market presence in high technology
including computers, software and telecommunications. The U.S. accounts for
more than 50% of the computer equipment in Portugal and probably close to 70%
of software. In addition to these items best prospects for non‑agricultural
exports include telecommunications equipment, medical equipment, scientific and
laboratory instruments, pollution control equipment, and franchising. Due to
transportation, distribution and taxes, many of these goods are shipped to
Portugal indirectly from the U.S. arriving from distribution centers or
suppliers located in other EU countries. Actual U.S. exports and market share
are probably double the official figures of USD 1 billion and 4%, respectively. Portugal
is also the preeminent supplier of goods and services to the Lusophone African
countries of Angola, Mozambique and Cape Verde. For example, Portugal accounts
for more than 50% of Angola's imports. Many of Portugal's key distributors and
firms have offices in Africa or travel there on a regular basis. It is not
uncommon for 10% of the total market for products in Portugal to actually be
accounted for by the reexport of goods to Africa. EU,
Infrastructure and Investment Scratch
the surface of almost any major project in Portugal and you turn up the
presence of EU funds. Much of Portugal's strong growth and investment can be
attributed to Portugal's membership in the European Union. EU co‑funding
has been used for a variety of infrastructure, development and training
projects. While the funds offer a key boost to continued growth, they also mean
that U.S. firms need to deal through their U.S. subsidiaries in Europe or
through EU partners to bid on the many EU‑funded projects. Although these
projects are not officially tied to any one country, in practice, contracts are
awarded only to EU firms and their subcontractors. Over
the period 1997 ‑ 2000, the government will invest some USD 20 billion in
regional development projects in virtually every sector of the economy. Portugal will fund two‑thirds of the
investment, the EU one‑third. EU‑backed
investment will have an impact on a number of major infrastructure projects,
including: expressway and railway construction and expansion; the Porto metro;
the renovation of the existing bridge over the Tagus River in Lisbon and
construction of a second bridge; construction of a nationwide natural gas
pipeline; construction of the Alqueva Dam and related irrigation works; and
complete renovation and development of a new section of Lisbon as the site for
EXPO 98, Lisbon's World Exposition. EU
funds remain instrumental in attracting private direct investment to
Portugal. In 1993, Portugal and the EU
agreed on a USD 7 billion package of subsidies and grants to encourage foreign
investment in industrial development during the period 1994 ‑ 1999. EU‑backed
incentives, often totaling 25‑40% or more of total project costs, have
been used effectively as a decisive factor in plant location decisions. These
funds were key in attracting the huge Ford/Volkswagen minivan manufacturing
plant and in retaining and expanding such high tech facilities as the Texas
Instruments/Samsung CPU plant. In addition to the financial incentives, international
comparisons show that Portuguese labor costs in manufacturing are among the
lowest of all industrialized countries. Strong
and Stable The
political leadership, regardless of whether it is the center right or left,
supports broadly similar policies on most issues. The government has been able
to guide Portugal with a steady hand due in part to its successful campaign to
be in the first tier of countries entering the European Economic and Monetary
Union (EMU). In
1997, Portugal had a deficit/GDP ratio of 2.4%, debt/GDP ratio of 62.5%,
inflation of 2.2%, a stable escudo within the European Monetary System for the
past three years, and long‑term interest rates below 6%. This more than met the criteria for joining
the European single currency set out in the 1992 Treaty on European Union. Accordingly, on May 2, 1998, European Union
(EU) leaders approved Portugal's membership in the group of eleven EU member
states that will irrevocably fix exchange rates and adopt a single currency,
the Euro, on January 1, 1999. Declining
inflation and long‑term interest rates and rising confidence in Portugal
resulted in investment‑ and private consumption‑led real economic
growth of 4% in 1997 that continues in the 4 ‑ 4.5% range in 1998. Portugal's external accounts remained broadly
in balance and financial markets were buoyant in 1997 and 1998, with bond
yields falling sharply to match their German equivalents and the stock market
expanding rapidly. Unemployment declined to 5.9% in the first quarter of 1998.
Labor regime rigidities such as high severance and social costs continue to
hamper even greater employment growth. Government bureaucracy remains
burdensome and commercial legal channels are still very slow. Country
Commercial Guides are available for U.S. exporters from the National Trade Data
Ban's CD‑ROM or via the Internet. Please contact Stat‑USA at 1‑800‑Stat‑USA
for more information. Country Commercial Guides can be accessed via the World
Wide Web at http://www.stat‑usa.gov; http://www.state.gov/; and
http://mac.doc.gov. they can also be ordered in hard copy or on diskette from
the National Technical Information Service (NTIS) at 1‑800‑553‑NTIS.
U.S. exporters seeking general export information/assistance and country‑specific
commercial information should contact the U.S. Department of Commerce, Trade
Information Center by phone at 1‑800‑USA‑TRADE. For
more information on Portugal and on other European markets, visit the Showcase
Europe home page at www.sce.doc.gov. INTERNATIONAL
COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S.
DEPARTMENT OF STATE, 1998. ALL RIGHTS
RESERVED OUTSIDE OF THE
UNITED STATES <NREC>Portugal02
Portugal: Economic Trends and Outlook <A>=Portugal II.
ECONOMIC TRENDS AND OUTLOOK Summary: In 1997, Portugal had a deficit/GDP ratio of
2.4%, debt/GDP ratio of 62.5%, inflation of 2.2%, a stable escudo within the
European Monetary System for the past three years, and long‑term interest
rates below 6%. This more than met the
criteria for joining the European single currency set out in the 1992 Treaty on
European Union. Accordingly, on May 2,
1998, European Union (EU) leaders approved Portugal's membership in the group
of eleven EU member states that will irrevocably fix exchange rates and adopt a
single currency, the Euro, on January 1, 1999.
Declining inflation and long‑term interest rates and rising
confidence in Portugal resulted in investment‑ and private consumption‑led
real economic growth of 4% in 1997 that continues in the 4 ‑ 4.5% range
in 1998. Portugal's external accounts
remained broadly in balance and financial markets were buoyant in 1997 and
1998, with bond yields falling sharply to match their German equivalents and
the stock market expanding rapidly. Unemployment declined to 5.9% in the first
quarter of 1998. GDP per capita on a
purchasing power parity basis rose to over 70% of the EU average in 1997 from
52.9% of the EC average in 1985. Economic
Growth: Falling inflation and interest rates in Portugal over the past two
years yielded steady economic growth beginning in the second half of 1996. The Portuguese economy grew 3.6% in real
terms in 1996, 4% in 1997 and is expected to grow 4 ‑ 4.5% in 1998 and
1999. Domestic demand rose by 5.1% in
1997 while net external demand declined by 1.4%. Gross
fixed capital formation expanded by 12.9% in real terms in 1997 (versus 7.7% in
1996). Heavy investment in public
infrastructure (public investment up 12.9%) and construction of family housing
(mortgage credit up 26.4%) dominated investment activity. Lower interest rates reduced the cost of
capital and eased firms' interest burdens and liquidity constraints. Between December 1995 and December 1997,
mortgage interest rates (loans of 5 years or more) declined by 4.4 percentage
points, permitting larger average loans without higher associated debt service. Private
consumption grew 3% in 1997, as increasing real incomes and employment boosted
consumer confidence. Sharply lower
nominal interest rates improved families' liquidity and triggered a sharp
(29.6%) increase in non‑residential consumer credit. Imports of home durable goods jumped by 9.7%
and vehicle purchases increased by 7.4%. Goods
and services exports slowed to 8.2% in real terms in 1997 (versus 9.6% in
1996), while imports of goods and services expanded 10.3% (versus 7.8% in
1996). Portugal's terms of trade
improved marginally in 1997 (0.7% for exports and 0.3% for imports). Export demand directed to Portuguese products
continued to expand rapidly in 1997 and Portuguese exporters continued to
increase their market shares in real terms.
The latter owed much to the increase in productive capacity of the
manufacturing sector, notably exports from the two year‑old AutoEuropa
(Ford/VW) plant. In 1997, AutoEuropa
produced 131,400 multipurpose vans and generated sales of $2.27 billion (2.2%
of GDP). The plant exported 98.3% production to major European markets
(Germany, UK, France). Capacity
utilization in manufacturing rose to 81% in 1997, with higher than average
rates in the automobile sector (84%) and other equipment goods sector
(85%). Higher demand spurred an increase
in productive capacity, with the industrial production index increasing by 5.3%
in 1997 (1.6% in 1996) and the intermediate goods index increasing by 7.6% in
1997 (0% in 1996). The government
believes supply‑side expansion typical of Portugal's stage of development
and business cycle mitigated the "overheating effects" of strong
demand growth through mid‑1998. For
1998, the lagged effect of interest rate reductions will continue to be
felt. Continued job creation, real wage
increases, rising external demand directed at Portuguese exports, completion of
major public infrastructure projects and the expansionary impact of the 1998
Lisbon World Exposition will boost real growth by 4 ‑ 4.5%. Gross fixed capital formation is expected to
grow by 7.5 ‑ 9.5%, private consumption by 3 ‑ 3.75%, and exports
of goods and services by 9 ‑ 10%.
Historically high demand for home construction, continued highway and railroad
building (funded by a 7.4% increase in EU co‑funded public investment in
the 1998 budget), and completion of EXPO '98 real estate development ensure
continued strong expansion of public investment in 1998. Continued recovery of key EU markets (France
and Germany) imply further increase in Portuguese exporters' market share. Tourist revenues stemming from EXPO '98
should boost economic activity and reduce the current account deficit in 1998. Imports of goods and services will rise 8 ‑
10%, in line with continued economic growth.
Economic growth on the upper end of the 4 ‑ 4.5% range would be
clearly above the trend growth of the economy, however, and could begin to
generate "overheating effects" later in 1998 or early next year. Similarly, employment should fall by another
0.5 percentage points to about 5.5%, nearer Portugal's natural rate of
unemployment, implying some wage pressures toward the end of this year or early
next. Inflation: Average consumer price inflation declined to
2.2% in 1997 and 2.1% in March 1998.
Based on the EU's harmonized index, Portuguese 12‑month average
inflation rate fell to 1.7% in February 1998 versus 1.6% for the EU‑15
and 1.1% for the average of the three EU members with the lowest inflation
(Ireland, France, and Austria).
Disinflation continued to depend on a stable exchange rate and wage
moderation. Portuguese financial
authorities supported a cautious but steady decline in interest rates and a
stable parity of the Portuguese Escudo against the German Mark in the second
half of 1997 and the first half of 1998.
Nominal private sector wage settlements averaged 3.5% in 1997 versus
4.4% in 1996. Government, labor, and
management failed to reach agreement on a collective bargaining reference wage
increase for 1998 under the "Strategic Social Pact" signed in
December 1996, but wage settlements averaged 3.1% in the first quarter of 1998. External
Accounts: Portugal's current account deficit in relation to GDP rose from 1.4%
in 1996 to about 2% in 1997 and is expected to be in the range of 1.5 ‑
2% in 1998 on a national accounts (accrual) basis. Surpluses on services (especially tourism)
and unilateral transfers (from the EU and emigrants) offset the large
merchandise trade deficit and continuing deficit on investment income. The merchandise trade deficit rose to $9.55
billion (9.3% of GDP) as rapidly expanding private investment boosted imports
of heavy equipment and machinery. Tourism revenues rose to the equivalent of
2.3% of GDP in 1997, EU transfers remained at 3% of GDP and emigrants'
remittances remained at 3.4% of GDP. The basic balance strengthened in 1997 as
foreign direct investment rose to $1.7 billion (1.7% of GDP). Foreign portfolio investment surged to $7 billion
(6.8% of GDP). Gold (at book value) and
other official reserves stood at $18.5 billion at end‑March 1998, while
Portugal's direct public external debt stood at $14.6 billion at end‑February
1998. When residents' portfolio
investment in long‑term foreign bonds and money market instruments is
included, Portugal's net external position remains strongly positive (12% of
GDP). Budget
Consolidation/Privatization: The general government budget deficit declined to
2.4% and public debt to 62.5% of GDP in 1997.
The budget deficit is expected to remain at 2.5% of GDP in 1998 and
decline to 1.5% of GDP by the year 2000.
The key budget challenge remains to control current expenditures and
strengthen current revenues without raising tax rates (mainly through more
efficient tax administration and further crackdowns on evasion and fraud). The government believes Portugal's
"social deficit"(education and health needs) precludes more severe
current cutbacks. It looks to revenue
enhancement to maintain current budget balance and make room for continued
public investment amounting to at least 4% of GDP per year. The
government continues to privatize state‑owned firms and use the proceeds
to reduce public debt. In 1997, the
government generated receipts of PTE 868 billion ($4.9 billion) and it applied
three‑quarters of this to debt reduction.
In June 1997, the government sold 29.6% (first tranche) of the state‑owned
electric utility EDP through a public offering/direct sale that raised PTE 391
billion ($2.2 billion). In September,
the government sold an additional 26% (third tranche) of Portugal Telecom
through a public offering/direct sale that raised PTE 363 billion ($2
billion). The government also sold 35%
of its shares in the highway management firm BRISA ($554 million) and 90% of
its stake in the chemical firm QUIMIGAL ($45 million). In 1998, the government plans to sell up to
20% (second tranche) of EDP and lower its debt/GDP ratio to 60% or less. Financial
Markets: In line with the increasing likelihood that Portugal would join the
European single currency in January 1999, nominal yields on 10‑year
Portuguese bonds fell from 6.97% in December 1996 to 5.68% in December
1997. Following formal confirmation on
May 2, 1998, that Portugal will join the Euro zone, long‑term interest
rates dipped below 5%, virtually converging with their German equivalents.
Short‑term central bank rates dropped to 4% and commercial bank lending
and deposit rates declined to 10% and 5%, respectively. The Lisbon Stock
Exchange (BVL) boomed in line with stronger economic growth, a stable
investment climate and continued success of Portugal's privatization
program. Led by the telecommunications,
financial services, and insurance sectors, the BVL‑30 index rose 79% in
1997 (52% in $ terms) and by 41% in the first five months of 1998 (43% in $
terms). Total market capitalization
(stocks and bonds) rose to some $104 billion (more than 100% of estimated GDP)
in 1998. Foreign portfolio investment of $7
billion ‑‑ one‑third into stocks (notably of newly privatized
firms EDP and PT) and two‑thirds into bonds ‑‑ fueled the
securities market rise in 1997. Domestic
government debt issues carry AAA rating and foreign currency issues AA‑
rating. The U.K. was the largest source
of foreign portfolio investment ($2.6 billion), followed by the United States
($1.3 billion) and Germany ($1.1 billion). Employment: Strengthening economic growth reduced
unemployment in 1997. The number of
employed grew by 1.9% in 1997, after edging up by only 0.6% in 1996, while the
number of unemployed dropped by 5.7%. The unemployment rate accordingly fell to
6.7% in 1997 and the trend remains downward ‑‑ 6.5% in the fourth
quarter of 1997 and 5.9% in the first quarter of 1998. Short‑term ("non‑permanent
contract") employment jumped by 15.7% in 1997, while long‑term
("permanent contract") employment declined by 0.6%. This suggests that high severance and social
costs associated with the permanent contract labor regime continue to hamper
employment growth. Youth unemployment
remained high (14.6%) and appeared marked among educated youth, signaling a
mismatch between what students are learning and what the labor market demands.
In the first quarter of 1998, however, the number of unemployed youth (15 ‑
24 year‑olds) fell by 15%. Portugal
continues to register the lowest manufacturing wage costs (base salary plus
benefits) in the EU (about $6/hour). It
has one of the lowest rates of days lost to strikes (29 days/1,000 employees).
Overall, wages are about one‑third of the EU average. The minimum wage in Portugal was $337/month
during 1997. Portugal's unit labor costs
rose 4% in 1997, the result of growth in compensation per employee of 6% and
productivity growth of 2%. The
government believes massive increases in productivity in manufacturing are a
direct result of heavy investment, particularly by foreign multinationals, in a
variety of leading sectors (automotive, electronics). The level of unionization is low in the
private sector and strikes are rare.
Public sector union strikes are more common, particularly in the
transport sector. PRINCIPAL GROWTH SECTORS Portugal's
ongoing public infrastructure building program offers major growth
opportunities for U.S. civil engineering firms and suppliers of construction equipment
and materials. EU co‑funding in
transportation, communications, ports and environmental projects ensures strong
growth for U.S. firms in these sectors over the medium‑term. Construction and outfitting of public
hospitals and private clinics offer continued market openings. The planning and construction of a new Lisbon
airport as well as construction of an LNG terminal will offer a large array of
business opportunities. Private housing construction has boosted demand for a
range of products in the home construction and supply sectors. Investment in
Portugal's tourist industry continues to expand to meet increased tourism
demand. Privatization in the energy and
aviation sectors offers additional market prospects. Other high‑growth sectors include
automotive manufacturing, semiconductors, electronics, plastics, food
processing, and franchising services. AGRICULTURE Coarse
Grain: Prior to 1991 Portugal was a strong market for U.S. coarse grains,
particularly corn and sorghum. However, in that year Portugal began to apply
the EU's variable import levy system to the corn sector. As a result, U.S.
coarse grain exports dropped from over USD 93 million in 1990 to virtually zero
over the following three years. Fortunately, with the implementation of a
500,000 ton quota for Portugal, U.S. coarse grain exports rebounded
dramatically to USD 66 million in 1996. These additional sales underpinned the
total 11% increase in U.S. agricultural exports to Portugal in 1996 to USD 321
million. Portuguese grain traders and
feed manufacturers continue to request an increase in the corn quota, but any
increase will probably not occur until multilateral trade negotiations are
reopened in the year 2000. Other
agriculture: Other U.S. products that continue to have high market potential in
Portugal are soybeans, cotton, and hides and skins (including finished
leather). Soybeans currently comprise the largest single U.S. export market in
Portugal in value terms (USD 100 million in 1996), and will remain a strong
market into the future. Cotton, hides and skins are Portugal's largest
agricultural imports, and there is scope for expanding the U.S. share of these
markets if U.S. exporters can be more aggressive and price competitive. Recently, U.S. exports of forest products,
pet food and tree nuts have also shown significant growth potential. GOVERNMENT ROLE IN THE ECONOMY Since
joining the European Community in 1986, the government has pursued structural
reform to roll back the presence of the state in the economy. Full or partial
privatization of over 100 companies since 1989 has reduced the weight of the
state‑owned enterprise sector in the economy from 20% to 10%. It has also yielded the government $17.2
billion in receipts, of which a large proportion was applied to public debt
reduction and the remainder to re‑capitalize state‑owned companies.
Nevertheless, the state's continued role as both owner/operator and regulator
of public utilities in some sectors (utilities, transport) has resulted in high‑cost
and inefficient public services for consumers and businesses. In addition,
government bureaucracy remains burdensome and commercial legal channels are
still very slow. It can take a few months to complete all the steps the
government requires to establish a company. Two‑thirds of all civil
cases, many of them commercial disputes, take more than two years to resolve.
The government maintains a rent control system that allows an estimated 80% of
housing units to be rented at below‑market value. BALANCE
OF PAYMENTS SITUATION Portugal
traditionally runs a large merchandise trade deficit, which is made possible by
large net receipts from tourism, net transfers from the European Union, and
emigrants' remittances. In 1997, the
Bank of Portugal estimates that Portugal ran a current account deficit of about
2% of GDP on a national accounts (accrual) basis. The merchandise trade deficit (FOB basis)
rose to about 9.3% of GDP, while the deficit on investment income narrowed to
less than 0.5% of GDP. Tourism revenues
rose to $2.4 billion (2.4% of GDP), EU transfers rose to $3.1 billion (3% of
GDP), and emigrants' remittances rose to $3.5 billion (3.4% of GDP). Merchandise exports (machinery and equipment,
vehicles, clothing, footwear, textiles, wood and cork, industrial chemicals)
rose to $23.1 billion (FOB). Imports
(vehicles, machinery and equipment, appliances, petroleum, chemicals, and food)
rose to $33.5 billion (CIF). Portugal recorded net foreign direct investment
inflows of $72 million in 1997 (versus net outflows of $58 million in 1996):
foreign direct investment inflows of USD 1.725 billion offset Portuguese
foreign direct investment outflows of $1.656 billion. Net foreign portfolio investment inflows were
$1.215 billion (versus net outflows of $1.8 billion in 1996). Foreign investment in Portuguese bonds and
stocks jumped to $7 billion (from $4.2 million in 1996), while Portuguese
investment in foreign stocks and bonds remained stable at about $5.8
billion. Foreign exchange reserves stood
at $12.9 billion, while gold (at book value) stood at $3.265 billion at end‑1997.
Direct state external debt of $13.9 billion was 74% of total foreign reserves
in December 1997. INFRASTRUCTURE SITUATION Portugal
is rapidly improving its road, energy, and sanitation infrastructure with the
help of substantial structural funds from the EU. During the period 1997 ‑
2000, Portugal will invest some USD 20 billion in regional development
projects, including major infrastructure projects, with approximately one‑third
of the financing provided by the EU. The EU‑backed investment will be
deployed in virtually every sector of the economy. A large proportion is being
applied in highways, ports, subways, and rail lines. The
ten top infrastructure projects underway with large EU funding include: Under
Way: Northern
rail line modernization (USD 700 million) Natural
gas regional pipelines (USD 700 million) Airports/ports
modernization (USD 930 million) Porto
subway (USD 500 million) Lisbon
subway (USD 1.4 billion) Low‑cost
housing (USD 2 billion) Alqueva
dam (USD 380 million) Proposed: Lisbon
airport for the year 2007 (USD 2.1 billion) LNG
terminal (USD 500 million) American
equipment and services enjoy an excellent reputation and have numerous
opportunities in the modernization of the Portuguese economy. Aggressive
marketing of a carefully selected product line is a necessity. INTERNATIONAL
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UNITED STATES <NREC>Portugal03
Portugal: Political Environment <A>=Portugal III.
POLITICAL ENVIRONMENT NATURE OF POLITICAL RELATIONSHIP WITH THE
UNITED STATES Bilateral
relations between the United States and Portugal are excellent, characterized
by shared democratic values and similar foreign policy perspectives. Ties
between the two countries are strengthened by the approximately two million
Americans who claim Portuguese descent. A
charter member of NATO, Portugal is a strong proponent of vigorous bilateral
and U.S.‑ EU transatlantic ties and of active American involvement in
European security affairs. The United States has maintained a military presence
in the Azores, an autonomous region of Portugal, since World War II. MAJOR POLITICAL ISSUES AFFECTING BUSINESS
CLIMATE The
government of Prime Minister Antonio Guterres has proposed decentralization of
economic planning functions to still‑to‑be‑created regions.
The regionalization plan has stirred controversy regarding the boundaries of
the regions, the functions to be devolved and the wording and timing of a
popular referendum on the proposal. The resulting uncertainty could slow down
some economic planning decisions, particularly as they affect allocation of EU
regional funding. BRIEF SYNOPSIS OF POLITICAL SYSTEM Portugal
is a stable parliamentary democracy with a directly elected president who
wields significant authority, including that of appointing the Prime Minister
and the cabinet. In appointing the government, the president must be guided by
the results of the legislative assembly elections. The Prime Minister is
responsible for managing Portugal's domestic and foreign policy, except in a
few issue areas where the constitution gives the president direct responsibility. In
the October 1995 elections, the Socialist Party (PS) won a plurality of 112 out
of the 230 seats in Portugal's unicameral legislature, and formed a minority
government under Prime Minister Antonio Guterres. Guterres implemented a centrist program of
fiscal restraint that prepared Portugal for entry into the European economic
and monetary union on January 1, 1999.
Guterres also increased emphasis on social cohesion, with greater
spending on health and education and a nationwide minimum guaranteed
income. Guterres continued his
predecessor's program of privatization of major state‑owned firms. The next parliamentary elections are due
before the end of 1999. The
Presidential election in January 1996, was won by the Socialist‑backed
candidate, former Socialist Party leader Jorge Sampaio. For the first time
since the 1974 revolution, the presidency and the government are in the hands
of a single party. The next Presidential
election is due in 2001. The
main political opposition, the Social Democratic Party (PSD), was in power from
1985 to 1995, and is still regrouping from its electoral defeat. Polls in mid‑1998 showed Prime Minister
Guterres's popularity was soaring and gave an outright majority to the
governing PS. This greatly limits the
PSD's effective margin for parliamentary maneuver and obliges the more
conservatively inclined PSD to support PS policies on most crucial issues. The
old‑line Communist Party (PCP), on the left, and the nationalist Popular
Party (CDS/PP), on the right, each attract a very small part of the electorate
(currently less than 10%). All of the
opposition parties have at times given tacit or explicit support for policies
supported by the PS minority government. INTERNATIONAL
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DEPARTMENT OF STATE, 1998. ALL RIGHTS
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UNITED STATES <NREC>Portugal04
Portugal: Marketing U.S. Products and Services <A>=Portugal IV. MARKETING U.S. PRODUCTS AND SERVICES In
doing business in Portugal, U.S. business should keep the following points in
mind. ‑
Local Representative. You need a local
representative who must have good contacts in order to be aware of future
contracts and to participate in tenders.
Portugal is a small country and knowing people in your industry is
important. ‑
Exclusive Distributor. One distributor
appointed on an exclusive basis is the ideal. ‑
The Iberian Peninsula. Portugal and
Spain are not one homogeneous marketing area.
Normally your Spanish distributor should not be asked to cover Portugal
unless the Spanish company is willing to set up a separate Portuguese entity to
handle this. The Portuguese resent the assumption that the Spanish know the
Portuguese market and Spanish distributors are largely ineffective in Portugal. ‑
Impact of the EU. If homework has been
done for other EU markets it's basically done for Portugal. Many projects are EU‑funded so an EU
partner is fundamental when bidding on these. ‑
Slow Down. Business takes time as
compared to northern Europe because personal contacts are important. Your customers want to get to know you before
they will trust you. ‑
Business is Honorable. There are
relatively few trade complaints. Because
the business community is close knit and many distributors are family run
operations, trade disputes are few and are normally resolved out of court. But,
if you do have to resort to the courts be prepared to wait and wait. The
Portuguese legal system is hopelessly slow and is the biggest single cause of
unresolved U.S. company trade complaints. ‑
English is Common. Although Portugal is
a European country it looks to the Atlantic and to trade with others. The U.S. is well respected in the market and
companies can usually do business in English. DISTRIBUTION AND SALES CHANNELS The
Portuguese population is concentrated on the coast. The major distribution
centers are Lisbon in the South and Porto in the North though the regional
centers of Braga (north of Porto) and Setubal (South of Lisbon) have come much
into their own in recent years. The Lisbon region accounts for 21% of the
Portugal's population with 63% employed in services and 33% employed in
industry. Major industries as well as the head offices of many large
corporations are located here. Most financial institutions have also chosen
Lisbon to locate their headquarters. The Lisbon area has the highest purchasing
power in the country and suffers, like many metropolitan areas, from traffic
congestion and rising costs. Porto is the most dynamic industrial development
area in Portugal. It accounts for 16% of the Portuguese population and is also
an area of high purchasing power. Half of all importers and distributors have
offices in Porto and US firms looking to appoint a distributor in Portugal
should not overlook this fact. The Commercial Service maintains an office in
Porto primarily to locate and to service these distributors. Porto is now
connected to Lisbon by a new motorway and a new bridge over the Douro River.
The coastal region between these two, and extending into Braga and Setubal, is
where the large majority of Portuguese industries are located. Portugal
is a relatively small country and most sales channels cover the entire
territory. Distribution centers tend to be located in Lisbon and Porto.
However, many large importers and wholesalers have branch sales offices and/or
sub‑agents or dealers in the principal cities and towns, including those
of the Portuguese islands of Madeira and the Azores. USE OF AGENTS/DISTRIBUTORS; FINDING A
PARTNER American
firms interested in selling in Portugal generally start by appointing an agent
or distributor. This may be followed by the establishment of local facilities
through wholly owned subsidiaries or joint ventures. Most manufacturers/exporters are commonly
represented in the market through exclusive importers/distributors who may
appoint sub‑distributors and dealers. Generally
agent/distributors who operate a sales network that covers the entire country
expect exclusive representation agreements. They tend to be quite specialized
in their respective market segment. It is often the case that an American firm
offering a wide range of products may require representation in the Portuguese
market by different local firms depending on the particular product. Large
retail stores and hypermarkets (Jumbo, Continente, Carrefour, Feira Nova, Lidl)
are growing very quickly. This may be an alternative sales channel for some
products. Some of these organizations buy/import directly and generally do not
raise problems of financial/credit reliability. Portuguese
law distinguishes two types of distribution contracts: agency agreements and
commercial concession agreements. Generally, relationships established between
American and Portuguese companies, with or without a written agreement, meet
the requirements of the Portuguese law. However, a good Portuguese
agent/distributor respects any informal type of commercial agreement made with
his suppliers. As a EU country, Portugal is subject to EU directive 86/653/CEE
which protects commercial agents in their relations with the companies for
which they work. The
Commercial Service (CS) at the American Embassy in Lisbon can help American
exporters find a partner in Portugal. The services offered in Lisbon include
all the export assistance core programs of the United States Department of
Commerce. They are targeted at the development of sales leads or finding
potential partners and have a low cost. FRANCHISING The
Portuguese franchising market has grown steadily over the past decade and
enjoys an annual growth rate of 20‑25%.
Even though the most developed segment of franchising in Portugal is
clothing, the fast‑food sector represents about 15% of the total market.
Services is currently the fastest growing segment. However, other sectors should be considered,
since Portugal offers many opportunities for expansion and the market has
considerable room for new, internationally known franchising concepts. DIRECT MARKETING Since
1989 mail order and TV‑sales have become effective direct marketing
methods and have grown rapidly. Between 1996 and 1997 sales growth was
estimated at 15% and presently there are 50 direct marketing firms in the
market. The most popular direct marketing sectors are cultural,
instruction/training and amusement materials (33% of sales) and apparel and
clothing (17% of sales). Other successful areas are housewares, perfumes and
cosmetics and art/collection products. The
expansion of this type of marketing has not been greater because Portuguese
mailing expenses are still high and consumer confidence in direct marketing
methods is low. Portuguese consumer protection regulations and laws are
considered adequate, however authorities implementing controls and conducting
inspections often fail to do so effectively. Direct
marketing is increasing in importance as a sales method and is expanding every
year to new areas of activity including "on‑line/Internet"
shopping for office supplies and computer accessories or even groceries. JOINT VENTURES/LICENSING Joint
ventures and licensing are alternative ways to enter the Portuguese market.
Joint ventures between American and Portuguese firms are treated under
Portuguese law as a foreign investment operation which may take the form of any
type of business firm. In regards to tax treatment and incentives, both
domestic and foreign owned are treated equally and in the same manner. Special
regulations apply to investment in government‑owned or jointly‑owned
companies. State‑owned monopolies are being eliminated. Certain sectors
will continue to be government‑controlled such as mail, water
distribution, sewage, rail service, airport and port authorities, and
armaments. Telecommunications, except for fixed telephony has been largely
privatized and is set for complete liberalization on January 1, 2000. Licensing
is a contractual arrangement in which the licensor makes available or sells its
know‑how, patents, trademarks or copyrights to a licensee for
compensation. Franchising could be considered as an important form of know‑how
licensing and one which is expanding in Portugal. American
firms should perhaps be reminded of the obvious: as a fully‑integrated
member of the EU, Portugal abides by the foreign trade and investment rules
that govern the rest of the EU. Whatever
applies in other EU countries applies to Portugal. If an American firm is
mastering EU regulations prior to exporting or investing in the EU, it has
already done its homework for Portugal. However, enforcement of some
intellectual property rights laws is still weak. STEPS TO ESTABLISH AN OFFICE In
1995, the Portuguese Government liberalized foreign investment in Portugal. To
establish an office in Portugal, that is, to create a new Portuguese company
recognized as such under Portuguese law, may be a process that offers some
difficulties to a foreigner. However, it is not so difficult if some simple
steps are followed. Any US entity interested in establishing a company in
Portugal should visit and discuss the project with both the CS of the American
Embassy in Lisbon and ICEP‑Portuguese Institute of Foreign Commerce. Generally
CS‑Lisbon recommends that the below listed steps required to establish a
company in Portugal be taken with the assistance of a documentation agent (an
individual or company specialized in handling administrative procedures to
obtain legal documents) or a lawyer. Following are the steps necessary to
establish a company in Portugal: ‑
Apply for a name (which may be the parent company name in the United States), a
certificate of approval and a provisional I.D. card at the RNPC‑Registo
Nacional de Pessoas Colectivas (National Companies Registry Office). ‑
Deposit a copy of the company's contract (memorandum and articles of
association) at a Notary Public for evaluation. ‑
Open a bank account in the name of the new company being created and deposit
its initial capital (registered capital) in one of the local banks. ‑
Sign the company's contract at a Notary Public. ‑
Have the company's contract published in the Official Bulletin (Diario da
Republica) and also in a local newspaper. ‑
File a declaration of activity commencement at the local revenue office. ‑
Apply to register the company at the RNPC and request a definitive I.D. Card.
Register the company also at the Commercial Register (CRC‑Conservatoria
do Registo Comercial) ‑
Industrial activities must be licensed by any delegation of the Ministry of
Industry co‑located at one of the five Regional Coordinating Committees
of the national government. Commercial activities generally do not require
licensing. For commercial activities related to public health or security a
license must be issued by the DGC‑Direccao Geral do Comercio (General
Directorate for Commerce). ‑
Register the company at the local Social Security Regional Center. ‑
Have the company's work schedule approved at the Ministry of Employment and
Social Security. ‑
Register the company's accounts records at the local Revenue Office, at the
Court and at the Bankruptcy Office. ‑
Additional requirements may apply: mandatory insurance, registration of
employees at Social Security and the registration of any foreign workers at the
Ministry of Employment and Social Security. ‑
Register investment of foreign capital in Portugal with the Foreign Trade,
Tourism and Investment Promotion Agency (ICEP) within 30 days of the date of
making investment. SELLING FACTORS/TECHNIQUES In
Portugal modern techniques still coexist with some traditional practices.
Modern sales techniques are generally accepted and effective but traditional
values continue to be respected. Many businessmen still consider a personal
contact and a handshake stronger than a contract but they will not be offended
if a formal contract is asked. Portuguese
consumers have seen their purchasing power increase every year and increasingly
buy on impulse. Direct sales, large hypermarkets and shopping malls are
becoming common. For consumer goods the decisive selling factors may be price,
quality, brand name or the product's innovative features. However, the
institutional buyer is quality conscious and very sensitive to pricing. Most tenders consider price first and quality
second. These characteristics and its market size sometimes make Portugal a
difficult market for some American exporters. A good understanding of market
needs and the demand for new opportunities should lead to very profitable
niches for the American exporter. ADVERTISING AND TRADE PROMOTION As
in all Western countries some of the preferred techniques to reach Portuguese
buyers effectively are advertising and trade promotions. Portugal offers a
reasonably priced market in which to advertise. Advertising media is the same
as in the majority of developed Western countries. Newspapers, magazines, TV
and more recently advertising in automatic bank teller machines are the most
popular. In
Portugal there are a number of specialized international trade shows. Following
are some of the major newspapers and business journals: ‑ P BLICO (daily) Comunica o Social, SA Direc o Editorial e Administrativa Rua
Amilcar Cabral, lt. 1 1750
Lisbon, Portugal Tel:
(351‑1) 759 95 59 Fax:
(351‑1) 758 42 59 ‑ DI RIO DE NOT CIAS, SA (daily) Av.
da Liberdade, 266 1250
Lisbon, Portugal Tel:
(351‑1) 355 8414 Fax:
(351‑1) 355 8431 ‑ JORNAL CORREIO DA MANH (daily) R
Mouzinho da Silveira, 27 1250
Lisbon, Portugal Tel:
(351‑1) 314 6553 Fax:
(351‑1) 353 3726 ‑ JORNAL DE NOT CIAS (daily) Av.
Boavista, 1588‑2. 4000
Porto, Portugal Tel:
(351‑2) 606 6065 Fax:
(351‑2) 200 7762 ‑ JORNAL EXPRESSO (weekly) R
Duque de Palmela, 37 ‑ 2 1250
Lisbon, Portugal Tel:
(351‑1) 311 4000 Fax:
(351‑1) 354 3858 ‑ JORNAL O INDEPENDENTE (weekly) R.
Antonio Pedro, 111‑2. 1150
Lisbon, Portugal Tel:
(351‑1) 311 8500 Fax:
(351‑1) 316 0200 ‑ JORNAL SEMAN RIO (weekly) Rua
Sacadura Cabral, 26 1495
Dafundo (Lisbon), Portugal Tel:
(351‑1) 419 8065 Fax:
(351‑1) 414 3336 ‑ JORNAL VIDA ECON MICA Cp.
Pequeno, 50 ‑ 5 Esq. 1000
Lisbon, Portugal Tel:
(351‑1) 793 77 50 Fax:
(351‑1) 793 77 48 ‑ SEMAN RIO ECON MICO (weekly) Avenida
Almirante Reis, 113 Edif
cio Planasa, 8 Salas 802/803 1100
Lisbon, Portugal Tel:
(351‑1) 352 5341 Fax:
(351‑1) 314 8847 ‑ REVISTA VALOR S.T.
& S.F., Sociedade de Publica es, Lda R.
Jose Estevao, 87 1100
Lisbon, Portugal Tel:
(351‑1) 311 3566 Fax:
(351‑1) 353 1259 PRICING PRODUCT Pricing
a product is very important since it influences the evaluation of its
attractiveness in this market. Pricing is the most common reason why a number
of American products offered in Portugal are not competitive. Pricing of
American products as now practiced tends to directly reflect the dealer's price
in the United States which often includes marketing overhead that: 1) must be
recalculated downwards to properly account for actual expenses in the
Portuguese market; 2) must not be a "double‑counted" expense
that is, the adding of Portuguese marketing expenses on top of "built‑in"
American marketing expenses. The
most appropriate method of pricing a product for the Portuguese market is
marginal cost pricing. This would be the marginal unit cost of production in
the United States plus Portuguese market‑specific costs associated with
overseas promotion, labeling and packaging expenses. To this would then be
added a profit margin which, when added to the other pricing components, would
still render the product competitive. Portuguese
importers currently accept the more common terms of international trade (C.I.F,
C&F., F.A.S., F.O.B. or Ex point of origin). They prefer to receive C.I.F.
quotations or at least F.O.B. quotations including detailed product
descriptions, gross and net shipping weight, volume and time of shipment (from
where the delivery is made) and delivery. Proforma invoices with all the above
details are not mandatory but are advisable and desirable. SALES SERVICE/CUSTOMER SUPPORT In
Portugal there are no rules or current practices regarding sales
service/customer support. It is the special nature of the American product or
service exported that determines the desirability of this support. However, in
representation/agency/distributorship agreements, sharing promotion expenses
and cooperating in marketing strategies or technical assistance is desirable. SELLING TO THE GOVERNMENT Portugal
follows the EU directive to the GATT Procurement Code but has a derogation
covering utilities such as water, transportation, energy and
telecommunications. Portugal also ratified the decisions of the Uruguay Round,
regarding government procurement. Depending
on the amount, government procurement may be made by direct consultation,
national or international tenders. National and international tenders are
published in the Portuguese Official Journal (Diario da Republica, Series III)
and in the two largest daily Portuguese newspapers. International tenders are
also published in the EU Official Journal (Series F). PROTECTING
YOUR PRODUCT FROM IPR INFRINGEMENT Trademark
Protection ‑ Portugal is a member of the International Union for the
Protection of Industrial Property (WIPO) and a party to the Madrid Agreement on
International Registration of Trademarks and Prevention of the Use of False
Origins. Portugal's current trademark law entered into force on June 1, 1995
and is consistent with the terms of the trade related intellectual property
provisions of GATT (TRIPS). Copyright
Protection ‑ The Government of Portugal is in the process of amending
national copyright legislation to conform to EU directives and the copyright
provisions of TRIPS. Unauthorized
reproduction of software remains a problem, despite modest success in efforts
by the Portuguese Association of Software Distributors (ASSOFT) to discourage
piracy and improve enforcement. While the piracy rate has decreased over the
last two years, it remains one of the highest in Europe. Patent
Protection ‑ As stated above, Portugal is a member and a party to the
Madrid Agreement. The Munich Convention on European Patents went into effect on
January 1, 1992. To conform to the trademark and patent provisions of the WTO
(TRIPS), Portugal passed a new Code of Industrial Property that took effect on
June 1, 1995, but this law proved inconsistent with TRIPS in certain
regards. Specific legislation was passed
in 1996 extending the term of patents applied for or already in force on
January 1, 1996, to the TRIPS‑consistent 20‑year‑from‑date‑of‑filing
term. The existing code, however, still
does not include provisions to protect test data unless submitted as part of a
patent application. Portugal is already
engaged in a review of this code and hopes to implement this and other
revisions by the end of 1998. NEED FOR A LOCAL
ATTORNEY Using
an attorney is not mandatory to do business in Portugal. Most transactions can
be accomplished without an attorney, including the establishment of small non‑complex
businesses. Attorneys are recommended to solve some types of trade disputes and
for the establishment of local offices such as joint ventures with local
entities or as 100% subsidiaries. For some complex types of licensing,
representation/distribution and franchising an attorney is also recommended to
assure compliance with local law. INTERNATIONAL
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UNITED STATES <NREC>Portugal05
Portugal: Leading Sectors for U.S. Exports & Investments <A>=Portugal V.
LEADING SECTORS FOR US EXPORTS AND INVESTMENT BEST PROSPECTS FOR NON AGRICULTURAL GOODS
AND SERVICES (USD million, unless otherwise noted) 01 ‑
FRANCHISING NARRATIVE: The
Portuguese franchising market has grown steadily over the past decade. With 28
U.S. franchises currently in Portugal we expected growth to continue in the 20‑25%
range over the next several years. 1996 and 1997 witnessed an explosion in the
Portuguese franchise market. From the end of 1995 to the end of 1997 the number
of franchises almost doubled. Even though the most developed segment of
franchising in Portugal is clothing, the market for any franchise is far from
being saturated. The number of service
franchises went in 1997 from 29 to 46, an increase of 55%. The fast food and restaurant sector
represents more or less 15% of the total market. Other sectors should strongly be taken into
consideration, since Portugal offers many opportunities for expansion and the
market has considerable demand for new, internationally known franchising
concepts. U.S. franchisers seeking to
expand in Europe will find Portugal a worthwhile market. There
is no legislation covering franchising.
However, one of the first contacts in Portugal should be with the
Portuguese Franchise Institute and the Portuguese Franchise Association. In general, market practice and agreement
arrangements are very similar to those in the U.S. Currently
there are around 236 franchise retail businesses operating in Portugal,
representing 2,630 stores. The number of
franchisers is expected to rise to 280 in 1998/99. Franchises
by country of origin: Portugal 30% Spain 20% France 14% USA 14% Italy 6% 02 ‑
COMPUTER SOFTWARE (CSF) NARRATIVE: Portuguese
demand for computer software should present positive long‑term prospects
with the introduction of the latest generation of micro‑computers, the
development of telecommunications, the interconnection of heterogeneous systems
and the creation of valued‑added networks. Portuguese
demand for computer software, USD 349 million in 1997, should continue to
experience a high growth rate reaching a 17% annual average over the next three
years. Seventy‑four percent of Portuguese demand is met by imports. U.S. import share was 35% in 1997 but the
estimated real market share for U.S. trade marks, some of which are bought from
U.S. companies with branch offices in Portugal or imported from European
subsidiaries, is about 75%. Five U.S.
companies are among the 10 largest computer software companies in Portugal. Most
promising subsectors within the sector, along with estimated 1999 total market
size of each subsector (USD million): ‑
Business Software (applications for financial institutions, especially integrated financial
systems) 287 ‑
Operative Software (manufacturing applications, CAD/CAM, production control and software for
main frames) 95 ‑
Home Games and other Software 97 DATA
TABLE: 1997 1998 1999 A) Total Market Size 349 410 479 B) Total Local Production 191 214 220 C) Total Exports 101 103 106 D) Total Imports 259 299 365 E) Imports from the U.S. 91 105 128 Import and export statistics
for 1997 were provided by SPA ‑ Software Publishers Association, BSA ‑
Business Software Alliance, and the Portuguese Software Association (ASSOFT). 03 ‑ MEDICAL EQUIPMENT
(MED) NARRATIVE: As in previous years the
health sector continues to be one of the announced priorities for the
Portuguese Government. The infusion of structural funds from the European Union
constantly supports the reorganization and expansion in the sector. There are several newly built hospitals and
construction of new hospitals and clinics continues. The increase of new
hospitals creates an exceptional demand for all types of equipment and also
adds to regular demand of supplies and the replacement of instruments and
equipment. The Portuguese market for
medical equipment, instruments and supplies is continuously growing at a rate
of around 0.7% per year. Portuguese production does not meet market
requirements and importation should grow slightly faster than total market
demand. Government policies and private sector expansion should increase demand
for all equipment, supplies and services in this sector, thus creating a
promising climate for American exporters. The US, traditionally
perceived as a preferential supplier of dependable top quality products, has a
relative advantage among its competitors and is slowly increasing its share of
the market. The U.S. share was about 14% in 1997, with Germany and Spain as its
principal competitors. Below is a list
of the medical equipment/devices of which the U.S. was the number one supplier
to Portugal in 1997, and which are considered best prospects: HS CODE DESCRIPTION VALUE MARKET MKT SHARE POSITION 901814 Scintigraphic apparatus 12.4 100% 1st 901819 Electro‑diagnostic apparatus 3.9
25% 1st 901839 Medical needles, catheters, canulae and its parts and accessories
6.7 38% 1st 901850 Ophthalmic instruments and appliances
1.3 48% 1st 901890 Instruments and appliances for medical/surgical or veterinary sciences and its parts and accessories
1.5 28% 1st There is EU harmonized
legislation governing the importation of medical devices to Europe. As in other EU countries, it is required that
medical devices imported from third countries being sold in Portugal undergo an
analysis test by a credited entity in the EU.
If devices pass this test, they are marked "CE" and may then
move freely and be sold in all countries throughout the EU. DATA TABLE: 1997 1998 1999 A) Total Market Size: 214 229 231 B) Total Local Production: 109 115 116 C) Total Exports: 102 111 102 D) Total Imports: 207 225 227 E) Imports from the U.S.: 33 42
42 Import and export statistics
for 1997 were provided by ICEP‑Instituto do Comercio Externo de Portugal
(the Portuguese Foreign Commerce Institute). All other statistics are
unofficial estimates. 04 ‑
TELECOMMUNICATIONS EQUIPMENT (TEL) NARRATIVE: Portugal's
telecommunications market offers huge opportunities for investors, service
providers and equipment suppliers. Privatization and on‑going
liberalization have stimulated the creation of several new services, new
companies, and increased demand for equipment. Additionally, the liberalization
of the TV sector, the approval of a third mobile telephone operator in November
1997, and the likely establishment of a second fixed telephone operator before
2000 will generate even more opportunities for American firms. The cellular telephone
market is the primary driver of growth. It has experienced an average growth
rate of 96% since 1992 and has already gained a 15% share of the
telecommunications services market. Growth will continue with increased
competition generated by the new Personal Communications Network (DCS‑1800)
expected to start operations during 1998 and the approval of a new fixed
telephone operator expected to take place before 2000. Anticipating the fully
liberalized market of 2000, all Portuguese telecommunications companies are
making large investments to increase competitiveness. The equipment market is
expected to grow at a remarkable annual rate of 16% from US $875 million in
1997. Imports constitute 75% of the total market. The US real share is much
higher than the 4% reported because most US exports to Portugal are made
through other European countries. There are many opportunities for American
companies to expand their business in this area. Most promising Subsectors
within the sector and corresponding market size (1997 estimate) are: ‑ Cellular terminals 297 ‑ Switching equipment 298 ‑ Fixed terminals 86 DATA TABLE: 1997 1998 1999 A) Total Market Size: 875 994 1150 B) Total Local Production: 276 280
282 C) Total Exports: 60 63
65 D) Total Imports: 659 777
933 E) Imports from the U.S.: 18 21
27 Exchange rate: 170 Import and export statistics
for 1997 were provided by ICEP‑Instituto do Comercio Externo de Portugal
(the Portuguese Foreign Commerce Institute). All other statistics are
unofficial estimates. 05‑ LABORATORY AND
SCIENTIFIC INSTRUMENTS (LAB) NARRATIVE: Expansion of the market for
Laboratory and Scientific Instruments is supported by a healthy growth in the
pharmaceutical, food processing and biotechnology industries. Analytical
instruments usage is rising rapidly in many areas, including that of pollution
monitoring and quality control of industries, while private testing
laboratories, including drug analysis, offer a growing market. On‑line
analytical instruments are penetrating the traditional process control market
as their customers require faster and more accurate data to improve control of
products processes for better quality and less waste. Accordingly, there will be an increasing
market for U.S. analytical instruments.
The U.S. shares about 14% of this market. An average annual growth rate of 5‑10%
is expected during next two years. Most promising subsectors
within the sector, along with estimated 1999 total market size of each
subsector (USD million): ‑ Analytical
Instruments 93 ‑ Measuring and
Controlling Instruments 242 DATA TABLE: 1997 1998 1999 A) Total Market Size 442 505 555 B) Total Local Production 29 32 35 C) Total Exports 5 7 8 D) Total Imports 418 480 528 E) Imports from the U.S. 60 64 74 Import and export statistics
for 1997 were provided by ICEP ‑ Instituto de Comercio e Turismo de
Portugal (the Portuguese Foreign Commerce Institute). All other statistics are
unofficial estimates. 05 ‑ COMPUTERS AND
PERIPHERALS (CPT) NARRATIVE: Portuguese market for
computers and peripherals (C&P's) reached US $685 million in 1997 and is
expected to increase to US $774 million in 1998 and US $874 million in
1999. Domestic demand must be met by
imports, which totaled US $736 million in 1997 and are expected to continue
growing at the high level of 13% per year. The share of US imports in the
Portuguese market for C&P's is about 9%. Holland with a market share of
26%, followed by France and Germany with shares of 13% each are the US's major
competitors but much of the equipment shipped from Europe comes from
subsidiaries of US companies. The real market share of US C&P's is more
than 66%. US very large multiuser systems dominate their market segment. Four
US companies are among the ten largest C&P's suppliers and have about 59%
of the market. Demand and imports are expected to continue growing over the
next three years with the share of US products experiencing a moderate
recovery. Most Promising Subsectors
within the sector and corresponding market size (1997 estimate) are: HS Description Value of imports (US$
millions) ‑ 84714990 ‑ Multiuser PC systems 86 ‑ 84715090 ‑ Large computers/mainframes 81 ‑ 84716040 ‑ Printers 86 ‑ 84716090 ‑ Input equipment/POS systems 79 ‑ 847330
‑ Parts and accessories for all types of computers 194 DATA TABLE: 1997 1998 1999 A) Total Market Size: 685 774 874 B) Total Local Production: 33 37
42 C) Total Exports: 84 95
108 D) Total Imports: 736 832 940 E) Imports from the U.S.: 68 77
87 Exchange rate: 170 Import and export statistics
for 1997 were provided by ICEP‑Instituto do Comercio Externo de Portugal
(the Portuguese Foreign Commerce Institute). All other statistics are
unofficial estimates. 06 ‑ POLLUTION CONTROL
EQUIPMENT (POL) NARRATIVE: As a member of the EU,
Portugal is required to incorporate into its environmental laws all the EU's
environmental directives issued by the Community, including standards for water
and air quality, and urban solid waste treatment and recycling. Accordingly, best sales prospects for U.S.
exporters include filtering and purifying machinery and apparatus, sensors and
analyzers, recycling equipment, and heavy metal collecting equipment. Over a five‑period beginning in January
1994, several billion dollars will be spent on solutions to Portugal's
environmental problems. The Portuguese
Government intends to spend US 2.4 billion on water supply and water treatment
infrastructure projects. Plans are also underway to provide adequate treatment
for about 35% of the national urban solid waste produced. Funded by EU (USD 984 million) and Portuguese
national and municipal budgets (USD 260 million), the total cost of solid waste
projects is expected to be USD 1.2 billion.
The U.S. shares about 6% of this market.
An average annual growth rate of 10‑15% is expected during next
two years. Most promising subsectors
within the sector, along with estimated 1999 total market size of each
subsector (USD million): ‑ Filtering and
Purifying Machinery and Apparatus 137 DATA TABLE: 1997 1998 1999 A) Total Market Size 146 169 185 B) Total Local Production 25 28 30 C) Total Exports 16 16 17 D) Total Imports 137 157 172 E) Imports from the U.S. 9 10 12 Import and export statistics
for 1997 were provided by ICEP ‑ Instituto de Comercio e Turismo de
Portugal (the Portuguese Foreign Commerce Institute). All other statistics are
unofficial estimates. 07 ‑ APPAREL (APP) NARRATIVE: The textile industry is
concentrated in the north of Portugal employing about 25% of labor force and is
responsible for about 25% of total Portuguese exports. Apparel is the most important sector and has
grown significantly over the last decade.
There are many new clothing chains operating in this market. Portuguese imports are divided into three
segments: fashion products (imported mainly from Italy and France); medium‑priced
good‑quality apparel (in which U.S. products generally compete); and less
expensive articles (from Far East).
Imports of apparel cover about 17% of market demand. EU countries are the most important
suppliers, accounting for about 90% of Portugal's imports. The main European exporting countries are
France (24%), Italy (22%), Spain (21%), and Germany (12%). Imports of sportswear from the U.S. are
expected to increase at an annual rate of about 15‑20% during next two
years. Apart from being very
popular, U.S. clothing has a good reputation among Portuguese buyers and end‑users. U.S. manufactured apparel is considered to be
durable and of high quality. Franchisers
of apparel, mainly casual and sportswear should look to Portugal and the
potential it offers. U.S. designers may
consider having their clothing manufactured in Portugal and exported from
Portugal to other EU countries. Most promising subsectors
within the sector, along with estimated 1999 total market size of each
Subsector (US$ million): ‑ Casual wear (men,
women and children) 1,620 ‑ Sportswear 1,520 ‑ Lingerie 1,350 DATA TABLE: 1997 1998 1999 A) Total Market Size 5,808 6,380 7,129 B) Total Local Production 6,812 7.485 8,234 C) Total Exports 2,008 2,210 2,320 D) Total Imports 1,004 1,105 1,215 E) Imports from the U.S. 5 6 7 Import and export statistics
for 1997 were provided by ANIVEC ‑ National Association of Apparel
Manufacturers. All other statistics are unofficial estimates. 08 ‑ AIRPORT AND
GROUND SUPPORT EQUIPMENT (APG) NARRATIVE: Portugal's increase in
aircraft, passenger and air cargo traffic, the expansion and modernization of
existing airports, and plans for the construction of a new national airport
foresees a growing market for airport ground support and handling equipment. ANA‑Aeroportos
e Navegacao Aerea EP and its affiliate ANAM (Madeira airports) is the public
enterprise authority which operates and manages the nine airports in
continental Portugal, Azores and Madeira islands. ANA is also responsible for two flight
information regions, one located in Lisbon and the other in Santa Maria,
Azores. Planning has started for a new
USD 2.1 billion national airport scheduled to open in 2007. The Lisbon airport
will be operating at capacity by 2007 as a steady 6% increase in passenger
traffic, presently 13 million people per year is projected. ANA EP plans to
invest USD 200 million by 2000 in the renovation and modernization of the
international airports of Porto, Lisbon and Faro. The largest investment share
will be for Lisbon airport, USD 114 million. Porto's airport will receive USD
36 million and approximately USD 40 million will be spent upgrading Faro's
airport. The Portuguese airports will
be privatized through ANA's privatization scheduled for the end of 1998. GOP
seeks to establish aircraft components as a major foreign investment area,
especially joint ventures, among others with OGMA‑Oficinas Gerais de
Material Aeronautico (Aeronautical General Workshops). U.S. ground support
equipment (mostly air navigational equipment) in 1997 accounted for
approximately 11% of the total Portuguese market with the U.S. as the major
supplier. DATA TABLE (Calendar Years): 1997 1998 1999 A) Total Market Size: 65 67
69 B) Total Local Production 27 30
33 C) Total Exports: 15 20
22 D) Total Imports: 53 57
58 E) Imports from the U.S. 7 8 9 09 ‑ ELECTRICAL POWER
SYSTEMS NARRATIVE: NB: This sector is listed
only because it is a regional Best Prospect for the Showcase Europe program.
Portugal imports close to 80% of its energy requirements, the remaining 20%
comes from domestic production. Power generation in Portugal is either thermal
or hydroelectric. Portugal does not have nuclear power. The Portuguese
electricity supply industry was restructured in mid‑1994 when the state‑owned
producer and distributor of electricity, Electricidade de Portugal (EDP) was
broken into operating groups. The EDP holding group, called Grupo EDP,
coordinates the group's operations and strategy; its production company
Companhia Portuguesa de Producao de Electricidade (CPPE); a grid company, Rede
Electrica Nacional (REN); four regional distribution companies, (divided into
north, south, central Portugal and Lisbon, and the Tagus river valley); and ten
service companies. 48% of grupo EDP has been privatized, of which the Spanish
company Iberdrola acquired 2.25% as the strategic partner. An additional 2.25%
of Grupo EDP is reserved for a future second strategic partner. Over a five‑year
period from 1994/1999, the EU is funding an Energy Program to develop
alternative sources of energy in Portugal. The funds allocated to this program
total about USD 1.2 billion, composed of approximately USD 429 million from the
EU, USD 36 million from the Portuguese Government, USD 419 million from public
companies and USD 320 million from the private companies. The installed
capacity at power plants of EDP Group was 7,522 MW at the end of 1996 of which
hydroelectric accounted for 3,957 MW (53%) and thermoelectric power plants
accounted for 3,555% (47%) of the total).
In 1996 Portugal had a total power demand of 30,285 Gwh, a 5.5% increase
over 1995. Co‑generation in Portugal offers major opportunities for
growth. In 1996, co‑generation units produced 3,420 Gwh, of which 816 Gwh
went to the national grid. Portugal started operating in 1997 its USD 650
million, 500 mile, 28 inch natural gas pipeline that runs from Sines in the
south to Valencia in the north. The
private company Turbogas operates Portugal's first natural gas‑fired
power plant at Tapada do Outeiro (northern Portugal). DATA TABLE (Calendar Years): 1997 1998 1999 A) Total Market Size: 216 228
250 B) Total Local Production: 39 41 43 C) Total Exports: 32 34 37 D) Total Imports: 209 221
243 E) Imports From the U.S.: 8 8.5 9 The above statistics are unofficial
estimates. 10 ‑ AUTOMOTIVE PARTS
/ SERVICE EQUIPMENT NARRATIVE: NB: This sector is listed
only because it is a regional Best Prospect for the Showcase Europe program.
The total Portuguese market for Auto Parts and Service Equipment was USD 1.3
billion in 1997 and an estimated growth rate of 4‑6% is expected over the
next three years. It should be kept in mind that a large percentage of this is
for use by local auto assembly plants. The Portuguese automobile
market exploded six years ago, as a rising standard of living and EU money
raised income levels. The market for new
automobiles is now relatively flat.
Automobile prices in Portugal are among the highest in the EU and the
average vehicle on the road is approximately 4‑5 years old. However, the
Portuguese market for automobile components has good potential and imported
equipment is needed. The independent
component industry is still relatively unsophisticated with production focusing
on the manufacturing of low‑tech products. Demand for automotive components is projected
to increase especially as the national automotive park ages. Best prospects: HS 842123 Oil or fuel filters HS 851110 Sparkplugs HS 851180 Motor Diagnosis Equipment HS 870839 Brakes HS 870870 Wheels/rubber tires 11 ‑ TOURISM (TRA) Narrative NB: This sector is listed
only because it is a regional Best Prospect for the Showcase Europe program.
Statistics for US arrivals rank Portugal 48th in 1997. This is an increase of
10.6% compared to the previous year. In 1997, 62,877 visitors entered the US
compared to 56,847in 1996. Portugal has a large number
of emigrants living in certain areas of the US, thus generating a reasonable
amount of Portuguese traveling to those regions. CS Portugal is promoting
States that have large Portuguese communities as tourist destinations and is
emphasizing tourist attractions in each of those States. The objective is to increase the interest and
visits by Portuguese tourists to these attractions when they are in the
U.S. CS Portugal works closely with
State Tourism Offices and other Tourism entities and organizes Familiarization
and Press trips to the destinations we promote.
Current destinations are California, Florida, Louisiana, Maryland,
Massachusetts, Nevada, New Jersey and Rhode Island. NR ‑ DEFENSE ARTICLES
AND SERVICES NARRATIVE: Note: Although Defense is a
best prospect it is not rated since products come from a variety of sectors.)
This sector is not rated The Portuguese Military plans to spend approximately
USD 205 million per year for the next five years (1998‑2003) on force
modernization. Although the domestic
defense industry currently consists primarily of the state owned manufacturing
firms and several private firms marketing defense products throughout the
world, Portugal is moving toward privatization and downsizing of the Military
industrial complex to reduce costs. The
Portuguese Government has established a holding company, Empordef (Empressa
Portuguesa de Defesa), under the direction of the Ministry of Defense, which is
responsible for all components of the military industrial complex (e.g. small
arms production, software development, maintenance and overhaul facilities,
bakeries, uniform manufacturing).
Empordef's charter centers on a five‑year investment and
development plan for Portuguese defense industries. Future efforts will include the restructure
or dissolution of several organizations under Empordef. Empordef will also be the decision‑maker
concerning any investment in facilities and equipment required for expansion of
defense industry capabilities. Empordef,
in conjunction with ICEP (Investimentos, Com rcio e Turismo de Portugal), will
play a significant role in the evaluation of defense industry offset programs
associated with future procurements. The
greatest opportunities for American businesses are in cooperative production in
Portugal. America's reputation for low
prices, high quality and large market share make it a valuable business
partner. As the emphasis continues on
unity within the European Union, the barriers to U.S. access to this market
will grow. But Portugal could still be
the gateway through which American firms gain access to the much larger
European market. Opportunities for
cooperative production within the defense industry include small arms
production and software development. Because of the recent
Modernization program, there will be an ongoing need for logistic support for
these systems in addition to periodic planned upgrades. In order to stretch
limited budget resources, new systems acquisitions will be tightly controlled
with financial incentives remaining a key part of any negotiation. Major acquisition projects planned for the
future are: Army: Air Defense Radar (comparable to U.S. systems: AN/MPQ‑64,
Sentinel Radar, and the Portable Search and Target Acquisition Radar (PSTAR) Weapon Locating Radar (comparable to U.S. systems: AN/TPQ‑36,
FIREFINDER Radar) Main Battle Tank Upgrade
(M60A3) Light to Medium Multi‑role Helicopters Navy: New Diesel Submarine Purchase (U.S. opportunities: MK 48 ADCAP
Torpedoes, Sub‑launched Harpoon Missiles) Re‑equipping the
Marines ASW modernization for Joao Belo class frigates Air Force: F‑16 Aircraft F‑16 Mid‑life
Upgrade AMRAAM Long Range Early Warning and Ground Control Intercept Radar SAR Helicopters Any major acquisitions will be the responsibility of MOD. The services generate requirements to MOD,
which are submitted for approval by Parliament. Under the "Third Military
Programming Law," each service has the authority to determine allocation
of funds within broad spending categories (e.g. Maintenance of Blue‑Water
Capacity). Contracting and negotiation
are basically open processes with intense negotiations usually occurring after
preliminary bids are received. There are
no barriers to U.S. companies desiring to do business with MOD. However, the EU continues to pressure
Portugal to buy as much as possible from within Europe. U.S. companies also need to be aware of the
Portuguese requirement for 100% offsets on all defense contracts. Contracting offices within
the services are specific for different types of procurements, however, the
first point of contact for discussion of requirements and potential interest in
new products will be the logistic divisions at each of the service's headquarters. The following is a list of useful contacts
for procurement and offset issues: MOD: Portuguese Ministry of
Defense: National Armaments Directorate, Vice Director: MGEN Melo Correia Director Nacional do
Armamento e Equipamento Misterio da Defesa Avenida Ilha da Madeira 1 1400 Lisboa, Portugal Army: Divis o de Logistica Estado‑Maior do Ex
rcito Rua Museu de Artilharia 1196 Lisboa, Portugal Navy: Chefe de Divis o de
Logistica Estado‑Maior da Armada Praca do Com rcio 1188 Lisboa, Portugal Air Force: Chefe da Quarta Divis o
(Logistica) Estado‑Maior da Forca
Aerea Avenida Leite de Vasconcelos Alfragide 2700 Amadora, Portugal ODC: Office of Defense
Cooperation: Chief, ODC: COL Jesse Perez,
USA Tel: 351‑1‑770‑2277 DCA Officer: CDR Carol Desmarais, USN Tel: 351‑1‑770‑2261 (U.S. mail) Chief, Office of Defense
Cooperation PSC 83, Box ODC APO AE 09726 (International Mail) Chief, Office of Defense
Cooperation Embaixada dos Estados Unidos Avenida das Forcas Armadas‑‑Sete
Rios 1600 Lisboa, Portugal Offsets: Empresa Portuguesa de Defesa (Empordef) Avenida Julio Dinis, 9‑11 1050 Lisboa, Portugal Investimentos, Com rcio e
Turismo de Portugal (ICEP) Direc o de Desenvolvimento de Mercados Avenida 5 de Outubro, 101 1032 Lisboa, Portugal BEST PROSPECTS FOR AGRICULTURAL PRODUCTS (1,000 Metric Tons) ‑ SOYBEANS NARRATIVE: Soybeans are the number one
U.S. agricultural export to Portugal in value terms (83 million USD during CY‑1997). The level of imports will be up in CY‑1998,
stimulated by competitive prices as well as a strong demand for oilmeal from
the feed sector. U.S. sales are affected
by the level of prices of South American beans.
Brazil is the leading competitor (317,000 Mt in CY 1997). DATA TABLE (Calendar Years): 1997 1998 1999 Units: 1,000 M.T. A) Total Market Size: 615 700 780 B) Total Local Production: 0 0 0 C) Total Exports: 9 10 11 D) Total Imports: 624 710 791 E) Imports from the U.S.: 275 313 349 Trade statistics for CY‑1997
were provided by INE ‑ National Statistics Institute. All others are unofficial estimates. ‑ CORN NARRATIVE After soybeans, corn was the
number two CY‑1997 U.S. agricultural export to Portugal (69 million
USD). Grain exports into the EU are
subject to high tariffs, but the U.S. has access to a special Portuguese
500,000 MT corn quota for non‑EU suppliers, under which the 1997 and past
years' exports took place. Policy
problems related to the clearance process of new bio‑engineered corn
varieties seeded in the US have led to a temporary suspension of corn imports
from the U.S. during CY‑1998. Trade
with the US will revert back to its previous level as soon as the EU has
developed a speedier process of clearing new seeds varieties. The local feed industry has a marked
preference for U.S. corn, which supplied 100% of the market till Portugal
joined the EC in 1986 and virtually all of the market under the special quota
until the political problems of 1998.
France is the major competitor (454,000 Mt in CY‑1997). DATA TABLE (Calendar Years): 1997 1998 1999 Units:
1,000 M.T. A) Total Market Size: 1,896 2,030 2,050 B) Total Local Production: 815 830 830 C) Total Exports: 2 2 2 D) Total Imports: 1,083 1,202 1,222 E) Imports from the U.S.: 491 0 500 Trade statistics for 1997
were provided by INE ‑ National Statistics Institute. All others are unofficial estimates. ‑ CORN GLUTEN FEED
(C.G.F.) NARRATIVE: C.G.F. is an important
agricultural product for U.S. exporters, even if current corn price trends have
been displacing CGF in feed production.
Moderate reductions in CGF imports are anticipated for CY‑1998 and
CY‑1999 as a consequence of the higher 1997 and 1998 EU corn crops. The U.S. is virtually the only supplier of
this product, which totaled 69 million USD in CY‑1997. DATA TABLE (Calendar Years): 1997 1998 1999 Units: 1,000 M.T. A) Total Market Size: 537 510
500 B) Total Local Production: 0 0 0 C) Total Exports: 11 11 11 D) Total Imports: 548 521
511 E) Imports from the U.S.: 534 508
498 Trade statistics for 1997
were provided by INE ‑ National Statistics Institute. All others are unofficial estimates. SIGNIFICANT INVESTMENT OPPORTUNITIES As Portugal rapidly
integrates into the EU and Portuguese economic development approaches the level
of other economies in the Union, the number of business opportunities increases
and the country becomes a more attractive destination to exporters and investors. Importation will grow
because industrial modernization requires a large volume of machinery,
equipment and instruments and consumers require more and better products. Inter‑EU import duties have been wiped
out and import duties vis‑a‑vis third countries have been reduced
to EU levels. Given the priorities of the
EU and the Portuguese government in the spending of structural funds and
considering where U.S. companies have a clear technological and industrial
edge, the following sectors are the most attractive: ‑ telecommunications ‑ environmental
pollution control/ waste management ‑ health systems and
medical equipment ‑ computers and
peripherals, software ‑ energy conservation ‑ seafood ‑ laboratory equipment ‑ franchising ‑ upscale tourism ‑ port renovation INTERNATIONAL COPYRIGHT,
U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
1998. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES <NREC>Portugal06
Portugal: Trade Regulations & Standards <A>=Portugal VI. TRADE REGULATIONS AND
STANDARDS TRADE BARRIERS The EU Customs Code (Code)
was fully adopted in Portugal as of January 1, 1993. Special tariffs exist for
tobacco, alcoholic beverages, petroleum and automotive vehicles. The Code
adopts the directives of the General Agreement on Tariffs and Trade (GATT)
including the amendments that resulted from the Uruguay Round of which Portugal
is a signatory member. Portugal uses the Harmonized
Nomenclature and Classification System (HS) and applies import duties according
to a maximum and minimum rate schedule. The minimum tariff schedule is applied
to goods originating in countries entitled to the benefits of most‑favored
nation treatment (that is, members of the GATT and countries with which the EU
has signed trade agreements) including the United States and most other
countries. Most import duties are
levied on an ad valorem basis. However, specific tariffs and compound tariffs
(the basis for weight may be gross, legal net or actual net weight) are also
used for some imports. Please note that importers must pay the value‑added
tax (IVA) which ranges up to 17% in full at the time of importation from a non‑EU
country. Imports from EU countries only
pay the IVA when a product is sold. This
detail encourages many distributors to import indirectly from the U.S. via
other EU countries. CUSTOMS VALUATION The customs value of
imported goods is found by a set of six methods. The most commonly used customs
value is the "transaction value method", which is the sales price in
open market conditions when the product is sold in EU Customs Territory. If this
method cannot be applied the others may be successively used, the sixth being a
last resort. The "transaction value method" is based on the price
actually paid by the importer to receive the merchandise in EU territory (no
matter the port of entry). The invoice price is
generally used as the "transaction value method" of an import if it
is clear that the price reflects market conditions and no doubt exists as to
the accuracy of the details supplied. The transaction value method is usually the
CIF price including any brokerage commissions and packing and excluding any
duties payable in Portugal or EU countries. IMPORT LICENSES Because Portugal is a member
of the EU, the majority of imported products enjoy liberal import procedures.
However, there are certain products which require import licenses called import
certificates for agriculture products and international import certificates for
strategic/dual use products (products that may be used for both military and
civilian purposes). For dual use products a certificate of delivery may also be
required. There are also some licenses required for the import of textile
products and for some industrial products from certain countries although not
from the United States. Applications for import licenses should be submitted to
the General Directorate of External Commerce. Tobacco, alcoholic beverages and
automobiles are still subject to some import controls, generally resulting from
bilateral agreements. EXPORT CONTROLS Since May 1988 Portugal has
adopted EU directives regarding exportation. Presently, Portuguese exporters
need to obtain an export declaration (this is a simplified procedure generally
handled by a customs house broker) before they ship their merchandise. The
export declaration is used for Portuguese Customs purposes but one copy should
stay together with other export documentation. In principle, the export
declaration cannot be obtained without a receipt of deposit confirming that the
merchandise is physically deposited in a customs area or an export warehouse.
Export warehouses are approved by Customs authorities and generally facilitate
the process of exporting. They do so by issuing export declarations as soon as
the exporter informs the Customs authorities that the merchandise is available,
and by making said merchandise available for Customs inspection. Portuguese Customs
regulations have recently approved the implementation of simplified export
proceedings. This allows authorized exporters, exporters of perishables and express
mail operators to export merchandise directly from their establishments. They
are only required to present a commercial invoice to the Customs Authorities.
The deposit of a guarantee is no longer required for exporters to have access
to simplified export procedures. IMPORT/EXPORT DOCUMENTATION The following documents are
required for ocean or air cargo shipments to Portugal: a bill of lading or an
airway bill accompanied by commercial invoices. Certain products require
special documents: food products need a certificate of health in Portuguese;
electric materials and construction equipment/machinery need a certificate of
conformity to EU directives; grapes, alcoholic beverages and tobacco need a
certificate of authenticity. Certificates of origin may also be required if the
origin can in any way be attributed to a country subject to quantitative or
other restrictions. Bills of Lading and Airway
Bills ‑ Bills of lading and airway bills require no consular
legalization. However, these documents should, if possible state the origin.
"To order" bills of lading are acceptable if they bear the shipper's
endorsement. Two copies of the document used in Portuguese or English are
required. Commercial Invoices ‑
Portuguese Customs requires two copies of commercial invoices, but at least one
additional copy should be provided to the importer. Commercial invoices should
have an accurate and specific description of the goods with Free On Board
(F.O.B.) value followed by an itemized description of expenses or Cost
Insurance and Freight (C.I.F.) value. The invoice should indicate the country
of origin. If the invoices are intended to certify the origin of the goods,
they must have a certification by a chamber of commerce (or by U.S. Customs or
port authorities). In cases involving
commodities that have undergone industrial transformation not representing full
process of manufacture in the country of origin, or which have passed through
free ports or zones, the respective commercial invoice shall bear notation
issued by the Portuguese Consulate having jurisdiction in that area. Certificate of Origin ‑
Certificates of origin are not required on direct shipments (ocean, air or
parcel post) or for goods transshipped via a waybill in which the origin is
stated. For shipments not covered by a commercial invoice, a through bill of
lading or air waybill stating the origin must be accompanied by a certificate
of origin if the origin can be attributed to one country being subject to
quantitative or any other restrictions. Certificates of origin forms
are obtainable from Portuguese consulates or authorized Chambers of Commerce.
Certificates must be authenticated by an authorized Chamber of Commerce or the
Portuguese consul, upon presentation of satisfactory evidence of origin, either
at the port of original shipment or the port of transshipment. TEMPORARY ENTRY Foreign goods may enter
Portuguese territory under temporary duty‑free admission. Temporary entry
can be allowed for goods in transit, for manufacturing, for temporary storage
in bonded warehouses or for temporary importation. Generally temporary entry of
goods requires the deposit of a guarantee for import duties and VAT. However,
in some cases, exemptions and partial guaranties can be made. In transit
merchandise can be entered without guarantee by residents of the EU who make
regular entries in transit or under carnet TIR, carnet ATA or a NATO 302 form.
Guaranties are reimbursed when the merchandise leaves the territory of the EU.
Professional materials, merchandise to be presented in exhibitions, teaching
materials, medical/surgical and laboratory equipment, and other materials
listed in the EU customs code can be temporarily imported duty‑free under
a carnet ATA. Temporary importation allows the merchandise to stay in the EU
territory as foreign merchandise for a period of 24 months. LABELING, MARKING REQUIREMENTS Generally all products must
be marked according to EU directives. Imported goods need to be
marked with an indication of origin. The indication "made in" is no
longer accepted in Portugal. All imported products sold directly to the public
must be marketed with the label "Fabricado em" which is the
Portuguese translation of "Made in".
False indication of origin is prohibited. Generally all products
directly sold to the public must have their labels or markings translated into
Portuguese especially the composition and usage instructions and should
indicate clearly its validity and the name and address of the importer. There may be special
requirements for some products such as pharmaceuticals, detergents, tobacco,
fertilizers, alcoholic beverages and foodstuffs containing preservatives and
colorings. There are also special requirements for the packaging and labeling
of dangerous or toxic products. Jewelry and other articles
of gold, silver or platinum must be assayed and hallmarked in Portugal by the
assayer's office in Lisbon or Porto. The importation of these articles is
limited to those firms or persons registered in the assayer's office. There are no special
requirements for marking the outside of cases for shipment to Portugal except
that weights, when marked, should be in kilograms. Dangerous products must be
marked according to the instructions of the UN. PROHIBITED IMPORTS As an EU country Portugal
follows the EU Customs Code and has no prohibited imports. However, some
products are subject to very strict controls such as strategic products,
wildlife, hazardous articles, non‑sport firearms and ammunition, etc. STANDARDS (E.G. ISO 9000
USAGE) Portugal uses NP EN ISO 9000
Standards, which are equivalent to ISO 9000 standards. American exporters must
demonstrate through a certifying entity that the products offered meet
equivalent quality standards. On July 2, 1983 the legal framework for the "Portuguese
Quality System" was established to monitor quality methods in Portugal.
The "Portuguese Quality System" is organized in three areas:
metrology, normalization, and qualification. The IPQ (Portuguese Institute for
Quality) certifies standards in Portugal and is one of the entities responsible
for the "Portuguese Quality System". FREE TRADE ZONES/WAREHOUSES Madeira: The Madeira's
International Business Center includes an Industrial Free Zone (41 licensed
firms), a Financial Services Center (43 licensed bank branches), an
International Services Center (2,833 licensed firms) and an International
Shipping register (148 licensed firms). Madeira offers exemptions from
corporate or individual income tax on licensed companies through the year 2011.
It also offers grants of up to 100% of employee training costs and up to 50% of
the cost of energy‑saving changes in production measures. The Free Zone
offers total exemption from customs duties on goods and raw materials imported
into the zone; exemption from quotas on exports to the EU of goods produced in
the zone; no payment of EU duties on local value‑added; and no payment of
EU duties on products incorporating EU raw materials and components. Foreign‑owned
firms have the same opportunities as domestic firms. Azores: The Azores has
established a Free Trade Zone on the island of Santa Maria with tax and
financial incentives. Bonded warehouses: Foreign
products may be entered into Portugal and be stored in bonded warehouses duty‑free
for an unlimited period of time. There are five types of bonded warehouses
depending on its public or private nature and whether its management is
endorsed by the Customs authorities or by private entities (established in the
territory of the EU). In some bonded warehouses it is possible to do some
handling, assembling and or manufacturing of the stored goods. SPECIAL IMPORT PROVISIONS Advanced rulings on
classification: Advanced rulings on tariff classifications for each type of
product may be obtained upon request, in writing, to Customs at Porto or
Lisbon. The request should include the name and address of the person who wants
the ruling plus detailed descriptions, composition, applications of the product
and as well as samples duly packed and labeled or photographs, plans or
catalogs. The nomenclature on which the classification is desired, the
suggested classification and other information necessary for an adequate ruling
may also be supplied. An advanced ruling may lose
validity if it is no longer compatible with new regulations or with new
interpretation of the nomenclature used and this information is given to the
holder of the ruling. There may a postponement (of up to six months or the period
of validity of any import certificate issued) of the loss of validity of an
advanced ruling ‑‑ for duty determination purposes or calculation
of quantity restrictions ‑‑ if import/export contracts have already
been made or certificates of importation have been issued. Entry and reexport: Foreign
merchandise landed in Portugal must be declared for importation or temporary
entry into the EU territory within a period of 45 days if landed by sea or 20
days if landed by air or from land. After arrival, if the merchandise cannot be
immediately declared to customs because documentation is missing or because of
any other reason, it will be stored ex‑officio by the port authority in
temporary storage customs warehouses, the cost of which is variable according
to the nature of the merchandise. Any merchandise may be reshipped out of EU
territory either before or after customs clearance. Normal reexportation is
made when the merchandise is entered under one of the temporary entry regimes.
Reexportation may be done after submission of a special customs declaration. Samples and advertising
materials: As an EU country and member of the Convention to Facilitate the
Importation of Samples and Advertising Matter, Portugal grants duty free entry
to giveaway samples properly labeled (except Tobacco and Matches), up to a duty
value of 175 ECUs and up to a VAT (value added tax) value of the same amount. Samples for which the duty
is greater than these amounts may also be admitted duty free if they are
intended for exhibitions, conventions or similar events, or other promotional
purposes that justify the quantity being imported. The person making the
declaration should provide justification for the larger quantity. Samples are subject to the
same documentation requirements that apply to ordinary commercial shipments and
require a symbolic value for customs declaration purposes on the shipping
documents or commercial invoices. Catalogs, price lists,
brochures, pamphlets may also be entered duty free under the same conditions as
the samples, if the name of the manufacturer/seller is readily apparent. Duty refund: Once goods have
been cleared through customs, collected duties or excess payments may be
refunded if at the moment of payment they were not due. Refund for undue and
excess payments can be claimed within a period of three years. Refund of duties
can also be obtained if a customs clearance declaration is cancelled after the
payment of duties. If imported merchandise is defective or does not meet the
contracted specifications and is refused and re‑exported by the importer,
he may request a duty refund within a period of 12 months. There are other conditions,
defined by the EU Committee, under which paid import duties may be refunded.
All refunds must be requested by the interested parties. Drawback: Importers may take
advantage of "drawbacks" for all types of merchandise, except those
subject to quantity restrictions or any agricultural leveling duty or similar
imposition when the merchandise was cleared. Drawbacks allow the reimbursement
of any duties paid on raw materials, parts, or components imported for the
manufacture of a product in country for later exportation. This will be
possible only if there are no restrictions to the exportation of the products
that resulted from the imported merchandise and that the intended exportation
took place. INTERNATIONAL COPYRIGHT,
U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
1998. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES <NREC>Portugal07 Portugal:
Investment Climate <A>=Portugal VII. INVESTMENT CLIMATE OPENNESS TO FOREIGN INVESTMENT Government Attitude: Foreign
investment is an essential part of the Portuguese government's overall strategy
to modernize the economy. A key
objective of the government's 1994‑1999 Regional Development Plan (PDR)
is to boost international competitiveness through increased foreign investment
in transport, telecommunications, energy, agriculture, fisheries, and
tourism. The government has earmarked a
large portion of the PTE 3,426 Billion (USD 20 Billion) EU‑backed PDR
financing package for 1997 to 2000 to support incentives for investment
(domestic and foreign). Investment Regime: Portugal
maintains a simple, post facto registration regime for foreign investment.
Foreign investors need only register with the Foreign Trade, Tourism, and
Investment Promotion Agency (ICEP) within thirty days from the day they make their
investment. Restrictions: Portugal
restricts non‑EU investment in regular air transport to 49%. It restricts non‑EU investment in
television operations to 15% (by a single non‑EU investor). It subjects complementary telecommunications
services to licensing and restricts non‑EU investors' participation in
the capital of complementary telecommunications operators to 25%. Portugal also restricts foreign investors'
participation in the capital of public service telecommunications operators to
25%. The government has proposed
legislation to modify some of these restrictions. Privatization Law:
Portugal's current privatization law (Number 11/90 of April 5, 1990) allows the
Council of Ministers to specify restrictions on foreign participation in the
privatization of state‑owned enterprises on a case‑by‑case
basis. "National Groups:"
Portuguese authorities tend, as a matter of policy, to favor national groups
over foreign groups in order to "enhance the critical mass of Portuguese
companies in the economy." The
restrictions in the privatization law exist largely for this reason (with the
original justification being that domestic groups, but not foreign investors,
were nationalized at the time of the 1974 revolution.) Even when this and other legal restrictions
are removed, however, the government is in a position to use indirect measures
to favor national groups over foreign firms.
In the privatization process, the government can set limits on the size
of firms allowed to bid on an impending privatization, thereby reducing the
ranks of the effective foreign competition.
In the regulatory process, the government can delay or deny approvals
for foreign firms to expand operations or to acquire or merge with private
Portuguese firms on a variety of technical grounds, thereby supporting
Portuguese groups. Finance/Insurance: The
creation of new credit institutions or finance companies, acquisition of a
controlling interest in such financial firms, and establishment of subsidiaries
require authorization by the Bank of Portugal (for EU firms) or the Ministry of
Finance (for non‑EU firms). In both cases, the authorities take
prudential considerations into account, but in the case of non‑EU firms,
the Ministry of Finance also considers the impact on the efficiency of the
financial system and the internationalization of the economy. Foreign insurers from non‑EU countries
seeking to establish an agency in Portugal must post a special deposit and
financial guarantee and must have been authorized for such activity for at
least five years. Research and Development
Programs: U.S. and other foreign firms are allowed to participate in government‑backed
research and development programs on par with Portuguese firms. These programs offer cash grants of between
30% and 70% of the cost of investment in R and D. Residence/Work Permits:
Companies employing more than five workers must limit foreign workers to 10% of
the workforce. Companies can request
exceptions to this limit if the foreign workers have special technical expertise. EU and Brazilian workers are not considered
foreign for the purpose of calculating the 10% limit. EU workers must obtain a residence card for
EU nationals but are not required to have work permits. Non‑EU workers are required to have
both a residence visa and a work permit. CONVERSION AND TRANSFER
POLICIES Convertibility: Portugal maintains no current or capital
account restrictions. Portugal is one of
eleven EU Member States that will enter the third phase of European Economic and
Monetary Union (EMU) and adopt a new single currency, the Euro, on January 1,
1999. The Portuguese Escudo is expected to be converted to the Euro at close to
its central parity against the ECU (about PTE 200 per Euro). Exchange Controls: The Bank
of Portugal retains the right to impose temporary restrictions on capital flows
in exceptional circumstances. The import
or export of gold (in any form), currency, and travelers' or other bearer
checks exceeding PTE 2.5 million ($15,000) must be declared to customs. EXPROPRIATION AND
COMPENSATION Past Expropriation: There
have been no cases of expropriation of foreign assets or companies in Portugal
in recent memory. Future Expropriation: There
is no concern about expropriation in Portugal today. Heightened environmental concerns led to
stricter zoning regulations for some existing and planned tourist projects,
particularly in the southern Algarve region.
The application (sometimes retroactively) of stricter environment/zoning
standards has affected the interests of some foreign (including U.S.) firms
with investments in the tourism sector. DISPUTE SETTLEMENT Record of Disputes: Major
industrial disputes involving foreign firms and investors are rare. Portuguese courts have been the main formal
means of resolving such disputes and enforcing property and contractual rights. Many foreign (including U.S.) firms and
investors consider Portuguese courts slow and ineffective. These firms routinely seek assistance from
private lawyers, lobbyists and/or their Embassies in Lisbon to resolve disputes
through direct appeal to the appropriate government authorities. International Arbitration:
Portugal accepts binding arbitration of investment disputes between foreign
investors and the state. PERFORMANCE
REQUIREMENTS/INCENTIVES Investment Incentives: The
Second Strategic Plan for the Modernization of Portuguese Industry (PEDIP II)
makes available PTE 1,153 billion (USD 7 billion) in European Union Regional
and Social Funds over the period 1994‑1999 for interest subsidies and
cash grants to encourage foreign investment in industrial development. ‑ Two‑to‑seven‑year,
interest‑free loans of up to PTE 500 million (USD 3 million) per company
are available to support manufacturing investment. ‑ Cash grants of up to
PTE 250 million (USD 1.5 million) per company are available to support non‑manufacturing
investment. Foreign investors may also
apply for separate cash grants to cover up to 90% of training expenses. ‑ Interest‑free
loans on investment projects exceeding PTE 2,500 million (USD 15 million) may
be negotiated (with limits of 80% of total investment for manufacturing
projects, and 65% for non‑manufacturing projects). ‑ Partial interest
guarantees on medium‑term loans up to a limit of PTE 30,000 million (USD
175 million) may be negotiated on projects "having industrial
relevance." ‑ Foreign investors
who hire workers aged 16‑30 for indefinite periods may benefit from a 3‑year
exemption from social security contributions (amounting to 23.75%) on wages
paid to those workers. PEDIP II now places special
emphasis on interest subsidies and private sector involvement versus cash
grants. Banks, not government agencies,
evaluate the financial viability of foreign investment projects. IAPMEI, the government agency that
administers the overall incentives program, reviews all applications (those
submitted by banks as well as those submitted directly by investors) for
consistency with industrial policy. Foreign
investors seeking a standard incentive package are guaranteed national
treatment and are not normally subject to performance requirements. Taxes: Portugal has one of the lowest corporate tax
rates in the EU. The normal rate is now
34% (versus 36% before), with an additional municipal tax in certain areas of
up to 10%. U.S. companies benefit from
the U.S. ‑ Portugal tax treaty, which protects U.S. investors from double
taxation and extends exceptional tax reductions on profits and capital gains to
investors. It reduces the withholding tax rate for the Portuguese‑source
income of non‑residents to 15% for dividends and 10% for royalties and
interest. Special Regime: Portugal
maintains a special contractual investment regime for major projects (over PTE
5,000 million/USD 30 million) that involve investment in an internationally
mobile production unit. Under the special
regime, foreign investors negotiate financial and tax incentives directly with
the Portuguese authorities ‑‑ usually ICEP and the Ministry of the
Economy. EU authorities must also
approve all projects involving EU funding.
Foreign investors seeking incentives under the special regime must sign
contracts committing them to specific performance targets ‑‑ for
employment, exports, local content, technology transfer and/or training. Investors are required to share proprietary
information relating to these performance targets in order to renew or expand
the incentives. The government plans to
maintain these incentive programs as long as EU funding for them is available
and other countries use them. Many multinational
corporations have successfully negotiated large investment contracts with the
Portuguese government under the special regime.
As a result, major multinationals like Ford, Texas Instruments/SamSung,
Siemens, and Renault account for the largest manufacturing projects in Portugal
and a large proportion of exports. The
AutoEuropa (Ford‑VW) joint venture that produces mini‑vans
accounted for an estimated 20% of Portuguese merchandise exports in 1997. These foreign direct investments have
integrated Portugal's economy much more closely into world production and
distribution networks and eased the process of structural adjustment in the
textiles, footwear and agricultural sectors. RIGHT TO PRIVATE OWNERSHIP
AND ESTABLISHMENT Private
Ownership/Enterprise: Private ownership is limited to 49% in the following
sectors: basic sanitation (except waste treatment); international air
transport; railways; ports; arms and weapons manufacture; and airports. The
government requires private firms to obtain concessions, contracts, and
licenses to operate in a number of sectors (public service television, waste
distribution, waste treatment), but grants these on a non‑discriminatory
basis. Foreign firms have the right to establish themselves in all economic
sectors open to private enterprise.
Foreign investments that affect public health, order or security, or
which relate to the arms industry, require prior approval of the competent
authorities. Competitive Equality:
Competitive inequalities between public and private firms have been reduced in
recent years. In the financial sector,
private banks that have grown through mergers and acquisitions now compete on
equal footing with the remaining public bank.
State‑owned entities still maintain competitive advantages in
airline transport and telecommunications. Privatization Program:
Portugal is completing the last phase of a wide‑ranging privatization
program that generated $17.2 billion in proceeds between 1989 and 1997. The government used more than half of the
proceeds to reduce public debt.
Privatization reduced the state‑owned enterprise presence in the
economy to less than 10% in 1997 from almost 20% in 1989. It reduced total
employment in the state‑owned sector to 2.8% of total employment from
6.4%. The company plans to privatize
seventeen companies during 1998 ‑ 99, including TAP‑Air Portugal,
Gas de Portugal, the Portuguese Airport authority, and the agricultural giant
EPAC. There will also be second and
third offerings of other companies, including CIMPOR, PETROGAL, EDP, and
PORTUCAL INDUSTRIAL. PROTECTION OF PROPERTY RIGHTS Patents: Portugal is a member of the International
Union for the Protection of Industrial Property (WIPO) and a party to the
Madrid Agreement on International Registration of Trademarks and Prevention of
the Use of False Origins. The Munich
Convention on European Patents went into effect on January 1, 1992. Current Portuguese law extends the terms of
patents applied for or already in force on January 1, 1996, to the WTO TRIPS‑consistent
20‑year‑from‑date‑of‑filing term. Copyrights: The current Portuguese law on copyright
protection is in accordance with TRIPS.
The government is in the process of transposing the EU Directives on
Duration, Rental, and Broadcasting into law.
Informatics legislation entered into force in 1991. This legislation has improved the enforcement
of copyright law and has increased the sale of computer software. The
Portuguese Association of Software Producers (ASSOFT) has conducted an
aggressive public awareness campaign that has included raids and seizures of
illegal software at large companies.
Significant enforcement problems remain and are exacerbated by lengthy
delays in conducting court cases. Trademarks: Portuguese industrial property law provides
for protection of trademarks in accordance with national convention. TRANSPARENCY OF THE
REGULATORY SYSTEM Competition Law: Portugal's
revised competition law (Decree‑Law 371/93 of October 29, 1993) brought
Portuguese legislation into line with European Union standards and the needs of
an open economy and integrated markets.
The law has helped to improve competitive conditions for consumers in
some areas. Nevertheless, administration
of laws and regulations continues to favor producers over consumers in
important instances. Bureaucratic Procedures:
Standard operating procedures in Portugal are often inconsistent with efficient
investment and business operations.
Decision‑making tends to be overly centralized and obtaining
government approvals or permits can be time‑consuming and costly,
particularly for small‑ and medium‑sized foreign investors and
entrepreneurs. Some U.S. firms report
substantial delays and red tape in accomplishing such basic tasks as
registering companies, filing taxes, receiving value‑added tax refunds,
and importing vehicles. Portugal still
charges a stamp tax on many transactions. EFFICIENT CAPITAL MARKETS
AND PORTFOLIO INVESTMENT Financial Markets: Market
conditions determine the allocation of credit and the level of interest rates. The Bank of Portugal intervenes in the money
and foreign exchange markets as necessary to ensure stability of the
Escudo. Foreign investors have ready
access to credit and other financing on the local market. Legal, regulatory, and accounting systems are
consistent with international norms. Financial Instruments: The
private sector has access to a wide variety of increasingly sophisticated
financial instruments. Bonds have become
the preferred medium term financing instrument for the business sector. Bonds and stocks are traded on four markets
in Portugal: the Lisbon Stock Exchange regular sessions; special stock exchange
sessions (used for privatization); the block trading market; and the over‑the‑counter
market. Portfolio Investment: The
favorable economic outlook for Portugal, a strong credit rating for foreign
currency (AA‑) and Escudo‑denominated (AAA) government debt, and
assured participation in the European single currency stimulated substantial
inflows of foreign portfolio investment into Portugal in 1997. Total inflows rose to $7 billion in 1997
versus $4.2 billion in 1996. The stock
of foreign portfolio investment grew to $33.5 billion (about 33% of GDP) in
February 1998 from $20.1 billion (about 18% of GDP) in December 1996. Of the total stock of foreign portfolio
investment in Portugal, 55% is currently placed in government bonds (75% of
which denominated in foreign currencies) and 43% in stocks. British investors hold 26% of total foreign
portfolio investment in Portugal, U.S. investors 20%, German investors 11%, and
French investors 9%. Foreign banks,
investment funds, and insurance/pension funds are the largest foreign portfolio
investors. Portugal incorporated the
EU's investment services directive into law on December 5, 1996. Stock Market: Relatively few
Portuguese firms raise capital on the stock market. The larger Portuguese multinationals actively
use the market and court foreign investors.
Many middle market firms remain closely held or are not prepared to meet
public disclosure requirements for issuing and listing shares. Most of the new share issuance in 1997
related to privatization of state‑owned enterprises or capital increases
by larger, already‑listed firms. In 1997, total turnover on Lisbon's
securities exchange amounted to 36% of GDP and total market capitalization
(stocks and bonds) rose to 80% of GDP.
Market capitalization exceeded PTE 18.5 billion (more than 100% of GDP)
in early 1998. The Lisbon Stock Exchange General Index rose 65% in 1997 (41% in
dollar terms). Morgan Stanley Capital International (MSCI) upgraded Portugal
from the emerging markets index to the developed markets index (MSCI EAFE) on
December 2. Defensive Measures: Some
private firms attempt to maintain control through statutes such as those that
limit voting power of certain categories of shareholders. Some firms attempt to prevent mergers and
acquisitions that might affect their interests by invoking the tacit support of
commercial regulatory authorities. Most
statutory measures are designed to protect against any potential loss of
control (i.e., any hostile takeover), domestic or foreign. Defensive measures involving regulatory
authorities usually involve a foreign investor.
Nevertheless, an adequate tender offer for 100% of the shares can
overcome most defenses. Portuguese law
requires that a hostile bidder make an offer for all the shares of a target
firm if the bidder seeks ownership of more than 50% of the shares. The bidder may make an offer for minority
blocks of shares if he seeks less than 50% of the shares. POLITICAL VIOLENCE There have been no incidents
involving politically motivated damage to projects and/or installations. Potentially destructive civil disturbances
are not likely. CORRUPTION Corruption is a relatively
limited but enduring aspect of the business culture in Portugal. It is general
practice for firms operating in Portugal to hire advisers and consultants to
pursue projects. In Portugal's business
culture, well‑developed contacts are extremely important because the
Portuguese feel this lends confidence and trust to business transactions. Connected advisers are commonly employed to
provide this extra measure of support.
These intermediaries are often very well paid for their services. Although U.S. firms acknowledge occasional
encounters with corruption in the course of doing business in Portugal, they do
not identify corruption as an obstacle to foreign direct investment. Portugal's basic law to
combat corruption is Law 36/94 of September 29, 1994. This law clarifies the
kinds of business and financial corruption that will be subject to criminal
penalties. The penalties for acts of
corruption committed in the exercise of public functions are specified in the
Penal Code (Article 420). The penalties
for conviction on corruption charges are one to six years in prison and/or
heavy fines, depending on the nature of the crime. Primary responsibility for preventing and
prosecuting corruption lies with the Public Prosecutor's Office and the Judicial
Police. Within the Judicial Police, the
Central Directorate for Combating Corruption, Fraud, and Financial and Economic
Crimes has primary action responsibility. Portugal signed and will soon ratify
the OECD Convention on Combating Bribery. LABOR Labor Availability: Overall
employment is growing very slowly, but demand is strong for engineers, skilled
technicians, and white‑collar workers.
The official unemployment rate fell to 5.9% in the first quarter of
1998. Real wages in Portugal are relatively
low. High non‑wage costs
(vacation, uses, severance, social security payments of 34.75%) raise the fixed
costs associated with hiring an additional employee. Portugal's labor force is
technically competent and hard working.
The quality of labor in key areas ‑‑engineers, skilled
technicians, professionals ‑‑ meets the EU standard at far below
the EU cost. The labor force
participation rate of 68.5% in 1997 was higher than the OECD average. The workforce is also flexible: 5.6% of the
labor force holds more than one job. General Conditions: For
1997, the legal minimum wage is PTE 58,900 (about $337) per month. The minimum wage for each job category is
normally negotiated and specified in collective labor agreements. Portugal has the lowest industrial labor
costs in the EU at present (approximately $6/hour. Employees generally receive
14 months' pay for 11 months' work ‑‑ an extra month's salary is
given as a Christmas bonus and as a holiday subsidy. Total social security contributions are
34.75%: employers pay social security contributions of 23.75% on all salaries,
wages, regular bonuses, and other regular income; employees pay 11%. Foreigners working temporarily in Portugal
(up to two years) and contributing to a compulsory social security scheme in
their home countries are exempt from Portuguese social security contributions.
The maximum legal working day is 8 hours, and the maximum working week is 40
hours. Annual vacation is 22 working
days. Labor‑Management
Relations: In recent years, labor/management relations have been generally
good. Strikes in the private sector are
relatively rare, except in the mining sector.
Government, labor, and management signed a "Strategic Social
Pact" on December 20, 1996 for the period 1997‑1999. The Pact was renewed in 1997 but not in 1998.
Labor disruption is more common in the public sector, especially in the
transport sector. ILO: Portugal is a member of the International
Labor Organization and adheres to the ILO Conventions Protecting Labor
Rights. Portugal ratified and is the
most recent signatory to ILO Convention 138, which establishes a minimum
employment age of 15 for all economic sectors.
As of January 1, 1997, the minimum working age in Portugal is 16, except
for light work, thereby exceeding the ILO norm.
The number of cases of illegal employment of children under the age of
16 is declining but remains greatest in the footwear industry. Choice of Technology:
Changing product mixes and high non‑wage employee costs provide clear
incentives for employers to adopt the most modern, productive machinery and
technology. The large foreign‑owned
manufacturing plants in Portugal produce high value‑added vehicles and
electronic components for export to EU markets.
The top Portuguese firms in the clothing and footwear sectors now
produce for "quick response" and other higher value‑added
market niches. This generates strong
demand for trained engineers and skilled technicians to manage and operate
state‑of‑the‑art machinery and equipment. It displaces thousands of less skilled
workers in traditional low‑wage, low‑technology jobs with firms
whose customers have switched to Eastern European, Turkish or Asian suppliers. FOREIGN TRADE ZONES/FREE
PORTS Portugal has two foreign
trade zones/free ports in the autonomous regions of the islands of Madeira and
the Azores. These foreign trade
zones/free ports were authorized in conformity with EU rules or incentives granted
to member states. The authorized
activities are industrial and commercial activities, international service
activities, trust and trust management companies and offshore financial
branches. Companies established in the
Free Trade Zones enjoy several benefits including import/export‑related
benefits, financial incentives, tax incentives for investors and tax incentives
for companies. The Madeira free trade zone
has had some success and is well known. The free trade zone of the Azores
islands has not achieved the same degree of international acceptance as
Madeira. BILATERAL INVESTMENT AGREEMENTS Portugal has bilateral
investment treaties with eighteen countries.
Ten of these agreements were in force as of June 1997. Portugal is an active participant in efforts
to negotiate a Multilateral Agreement on Investment (MAI) within the OECD
framework. Portugal: Bilateral Investment
Treaties Country Signature Entry Into Force Germany 09/16/80 04/23/82 Morocco 10/18/88 03/22/95 Cape Verde 10/26/90 10/04/91 China 02/03/92 12/01/92 Guinea‑Bissau 6/14/91 Hungary 02/28/92 Poland 03/11/93 08/03/94 Romania 11/17/93 11/17/94 Czech Rep. 11/12/93 08/03/94 Brazil 02/09/94 Tunisia 05/11/92 12/06/94 Venezuela 06/17/94 05/11/95 Peru 11/22/94 10/02/95 Russian Fed. 07/22/94 Argentina 10/06/94 Mozambique 09/01/95 South Korea 05/03/95 Rep. of Croatia 05/10/95 OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS The potential for
significant OPIC insurance programs in Portugal is limited. Nevertheless, some
U.S. firms insure with OPIC in Portugal as a matter of international corporate
risk management policy. Portugal is a
member of the Multinational Investment Guarantee Authority (MIGA). CAPITAL OUTFLOW POLICY There are no restrictions on
capital outflows. The government
supports Portuguese exports and foreign investment in politically risky
developing countries through a contract with the Companhia de Seguro de
Creditos, S.A. (COSEC). Under the
government's Special Program of Support for the Export Sector (PEASE), state‑owned
Banco de Fomento e Exterior (BFE) maintains 34 government‑backed credit
lines in 17 targeted higher‑risk countries. BFE reports increased activity with the
credit lines for Algeria, Iran, Zimbabwe, and Tunisia. MAJOR FOREIGN INVESTORS Major Foreign Direct
Investors Company Industry Foreign Control Renault Portuguesa, SA Motor Vehicles and Parts France Shell Portuguesa, SA Fuel Distribution Netherlands Autoeuropa Motor Vehicles and Parts Germany Makro, SA Food Distribution Netherlands Mobil Oil Portuguesa, LDA
Fuel Distribution USA Opel, SA Motor Vehicles and Parts USA BP Portuguesa, SA Fuel Distribution UK Tisep, LDA Electronics USA Siemens, SA Electronics Germany Ford Lusitana, SA Motor Vehicles and Parts USA Fiat Auto Portuguesa, SA Motor Vehicles and Parts Italy Carrefour, SA Food Distribution France Philip Morris (Portugal),
LDA Trade USA Nestl Portugal, SA Food Switzerland Bento Pedroso Constru oes,
SA Construction Brazil Borealis‑Pol meros, SA Chemicals Finland Ford Electr nica, LTD Motor Vehicles and Parts USA Cepsa, SA Fuel Distribution Spain Philips Portuguesa, SA Electronics Netherlands Centralcer, SA Alcoholic Beverages Columbia Delphi Packard Motor Vehicles and Parts USA Yazaki Saltano Portugal,
SA Motor Vehicles and Parts Japan Citroen‑Autom veis, SA Motor Vehicles and Parts France Tejo Energia, SA Water, Electricity and Gas UK IBM, SA Electronics USA Lever, LDA Soaps and Cosmetics Netherlands Mitsubishi, SA Motor Vehicles and Parts Japan Stora Celbi, SA Forestry Products Sweden Repsol, SA Fuel Distribution Spain Alcantara Refinarias, SA Food UK Sony Portugal, LDA Electronics (trade) Japan Rover, LDA Motor Vehicles and Parts UK Iglo, LDA Food Netherlands Esso Portuguesa, SA Fuel Distribution USA Mercedes Benz, SA Motor Vehicles and Parts Germany Elf, SA Fuel Distribution France Cires, SA Chemicals Japan Hewlett‑Packard, SA Computers and Electronics USA Matutano, SA Food USA Colgate‑Palmolive, SA Soaps and Cosmetics USA Honda Autom vel Portugal, SA
Motor Vehicles and Parts Japan Indelma, SA Electronics Germany Bertrand Faure, SA Motor Vehicles and Parts France Zara Portugal, LDA Trade Netherlands Continental Mabor, SA Chemicals Germany Hoechst Portuguesa, SA Chemicals Germany Ecco'let (Portugal), LDA Textiles Denmark Bayer Portugal, SA Chemicals Germany Merloni, SA Electrical and Electronic Italy Machinery Citroen Lusitana, SA Motor Vehicles and Parts France Solvay, SA Chemicals Belgium Sandeman & CA., SA Alcoholic Beverages UK Total, SA Fuel Distribution France Transinsular, SA Transportation Hong‑Kong Rank Xerox, LDA Electronics (trade) USA Source: ICEP Foreign
Investment Database/"Exame" Magazine, October 1996 INTERNATIONAL COPYRIGHT,
U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
1998. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES <NREC>Portugal08
Portugal: Trade and Project Financing <A>=Portugal VIII. TRADE AND PROJECT
FINANCING BRIEF DESCRIPTION OF BANKING
SYSTEM Banking: Total assets of the banking system were
approximately PTE 41 trillion (USD 241 billion) in 1997. The purchase of Banco Comercial dos Acores
(BCA) by Banco Internacional do Funchal (BANIF), the sale of Banco de Fomento e
Exterior (BFE) to Banco Portugues de Investimento (BPI), and the sale of the
residual government share in Banco Totta e Acores (BTA) to private investors
left the Caixa Geral de Depositos (CGD) group the only financial institution in
government hands at the end of 1996. The
government's share of total shareholder equity in the banking system
accordingly declined to 30% in 1996 from 90% ten years ago. The five largest banking
groups in Portugal by total assets (weighted according to ownership shares) are
as follows: the Champalimaud Group (USD 59 billion), including Banco Pinto e
Sotto Mayor (BPSM), BTA, Credito Predial Portugues (CPP) and Chemical Bank‑Portugal;
the Banco Comercial Portugues (BCP) Group (USD 55 billion), including Banco
Portugues do Atlantico (BPA) and part ownership in four other smaller banks;
state‑owned CGD Group (USD 53 billion), including Banco Nacional
Ultramarino (BNU); the BPI Group (USD 33 billion), including BFE and part
ownership in two smaller banks; and Banco Espirito Santo e Comercial de Lisboa
(BESCL) (USD 20 billion). These five
groups account for an estimated 83% of total assets and more than 90% of the
profits of the banking system. Nevertheless, Portuguese
banks remain small by European standards ‑‑ the top three noted
above were ranked 81st, 85th, and 152nd largest in Europe, respectively, in
1995. Liberalized financial markets and
greater European competition limit the scope for significant oligopolistic
behavior. Financial margins declined to
2.3% in 1997 from 2.65% in 1995.
Commercial and consumer loan rates fell to 11‑12% and deposit
rates to 3‑5%. Greater consumer
and business awareness of credit options and stiff foreign competition are
expected to accentuate this downward trend in 1998 and 1999. Banking Soundness: The
average solvency ratio was in 1997 of about 8.7%. Bad loans amount to an estimated 5.3% of
total loans, in line with international norms, but are a higher percentage in
the agricultural sector. Portugal has
transposed into national law key EU financial Directives covering banking
coordination (the "community passport"), auditing on a consolidated
basis, capital structure, solvency, and money‑laundering. A deposit guarantee fund is in place and the
Fund's resources stood at PTE 52 billion (USD 350 million) at the end of
1995. In June 1995, deposit guarantees
were extended to include deposits taken by Portuguese banks in other EU
countries. Banks' shares trade freely on
the stock exchange. GENERAL FINANCING
AVAILABILITY Short‑term and medium‑term
financing are readily available. Overdrafts are the most common source of short‑term
finance for corporations. The issuance
of commercial paper began in 1993 and has grown rapidly. The placement of bonds by corporations is the
preferred medium‑term financing instrument. Intercompany borrowing is also common. EXPORT FINANCE/METHODS OF
PAYMENT Bankers acceptances and
supplier credit are commonly used to finance international trade. Most
international trade is handled by commercial banks. Both Exim‑Bank and
OPIC programs are available in Portugal, but are little used because commercial
credit is widely available and political risks are not perceived to be high.
Project financing from multilateral institutions such as the World Bank (IBRD)
and the European Investment Bank (EIB) are available. Commercial banks also
offer project financing. PROJECT FINANCING Contractors may be required
to bring financing proposals for major projects bids on a case‑by‑case
basis although generally the Government finances the project. Project financing
is available for a wide variety of projects ranging from bridges to gas
pipeline construction. LIST OF COMMERCIAL BANKS Banco Comercial Portugu s,
SA Rua Augusta 62/74 1100 Lisbon, Portugal Tel: (351‑1) 347 34 74 Fax: (351‑1) 342 16 77 Banco Borges & Irmao Pra a do Municipio, 31 1100 Lisbon, Portugal Tel: (351‑1) Fax: (351‑1) Banco Esp rito Santo Av. da Liberdade, 195 1200 Lisbon, Portugal Tel: (351‑1) 315 83 31 Fax: (351‑1) 350 89 15 Banco Essi, SA Torre 3, Tierno Galvan 14 1070 Lisbon, Portugal Tel: (351‑1) 380 85 00 Fax: (351‑1) 388 82 59 Banco Finatia, SA Rua Gen. Firmino Mig, 5, 1 1600 Lisbon, Portugal Tel: (351‑1) 720 20 00 Fax: (351‑1) 726 53 10 Banco Finibanco Av. Berna, 10 1050 Lisbon, Portugal Tel: (351‑1) 790 28 00 Fax: (351‑1) 790 28 01 Banco Fonsecas & Burnay Pra a do Comercio, 132 1100 Lisbon, Portugal Tel: (351‑1) 321 37 00 Banco Internacional de
Credito Av. Fontes Pereira de Melo,
27 1050 Lisbon, Portugal Tel: (351‑1) 311 55 55 Fax: (351‑1) 314 61 65 Banco Internacional do
Funchal Av. Jose Malhoa, 1792 1070 Lisbon, Portugal Tel: (351‑1) 721 12 00 Fax: (351‑1) 721 12 01 Banco Mello Comercial Av. Jose Malhoa, 1682 1070 Lisbon, Portugal Tel: (351‑1) 720 15 00 Fax: (351‑1) 720 17 66 Banco Nacional Ultramarino Av. 5 de Outoubro, 175 1050 Lisbon, Portugal Tel: (351‑1) 791 80 00 Fax: (351‑1) Banco Pinto & Sotto
Mayor Rua do Ouro, 28‑3 1100 Lisbon, Portugal Tel: (351‑1) 347 62 61 Fax: (351‑1) 342 70 78 Banco Portugues do Atlantico Rua Augusta, 84 1100 Lisbon, Portugal Tel: (351‑1) 321 10 00 Fax: (351‑1) 422 44 59 Banco Santander Portugal Pra a Marques de Pombal, 2 1250 Lisbon, Portugal Tel: (351‑1) 310 70 00 Fax: (351‑1) 310 72 34 Banco Totta & A ores Rua do Ouro, 88‑2 1100 Lisbon, Portugal Tel: (351‑1) 321 15 00 Fax: (351‑1) 321 31
80/1 Barclays Bank PLC Av. da Republica, 50‑2
1000 Lisbon, Portugal Tel: (351‑1) 793 50 20 Fax: (351‑1) 797 96 10 Caixa Geral de Dep sitos Lg. do Calhariz 1100 Lisbon, Portugal Tel: (351‑1) 346 03 51 Fax: (351‑1) 342 13 06 INTERNATIONAL COPYRIGHT,
U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,
1998. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES <NREC>Portugal09
Portugal: Business Travel <A>=Portugal IX. BUSINESS TRAVEL BUSINESS CUSTOMS Portugal is a country in
transition culturally as well as economically.
Courtesy, in business and other spheres, is simply expected and easily
extended. Legal contracts don't have the strength in business associations that
personal confidence, built over years of experience, offers. Aggressiveness is
not yet keen in marketing because it may be interpreted as socially offensive.
Pragmatism, of the American variety, is respected but only when presented as a
possible option to be taken, not as an opportunity that must be breathlessly
seized. In terms of everyday
business the Portuguese are correct and civil. They respect the time of their
appointments and expect the same from others. They are thorough to a fault,
often pouring over all the documents relative to a negotiation, and not too ready
"to just hit the highlights".
This is done partly to be careful (conservative) but also to demonstrate
their grasp of the matter ‑ ‑ exhibiting pedantic merit rather than
pragmatic merit. Many Portuguese speak two, often three languages, English
being the preferred second language. Many have relatives in the U.S. and have
visited North America. No visas are required to
visit Portugal for stays of 60 days or less. There are no travel advisories for
Portugal nor have there been for many years. Legal Holidays for 1999 January 1 ‑ New Year's Day January 18 ‑ Martin Luther King JR's
Birthday February 10 ‑ Carnival February 15 ‑ Washington's Birthday April 2 ‑ Good Friday April 4 ‑ Easter Sunday April 25 ‑ Liberty Day May 1 ‑ May Day May 31 ‑ Memorial Day June 3 ‑ Corpus Christi Day June 10 ‑ Portugal Day June 13 ‑ St. Anthony's Day (In
Lisbon Only) July 4 ‑ Independence Day August 15 ‑ Assumption Day September 6 ‑ Labor Day October 5 < |