Porto and Northern Portugal a Magnet for Investment
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Porto and Northern Portugal A magnet for investment EY Attractiveness Survey 2019 Portugal Regional Contents Editorial 4 Executive summary 6 Why Porto and 8 1 Northern Portugal 2 Region’s FDI 18 3 Attractiveness perception 26 Methodology: how EY researched this report 36 About the Attractiveness Program 37 How can EY help? 38 Porto’s momentum persists as the value drivers are still in place Ricardo Valente Porto’s momentum continues to public and private buses, urban and City Councillor for Economy, persist as the value drivers attracting long-haul trains, metro, and taxis, taking Tourism and Commerce foreign investors to set up business advantage of its location with easy road Porto City Hall in the city are still intact. These value access. New access roads and parking drivers include quality of life, fantastic lots will be built as well. Through such availability of talent, first-class multi-modal integration, the terminal will infrastructure and a governance system, offer urban, inter-city, inter-regional and which are focused on ensuring that the international connections (with direct attractiveness of Porto stays strong. metro connection to the Francisco Sá Currently, Porto’s reputation as an Carneiro Airport). It will become one of innovative city is primarily because of the main transportation hubs in Porto its cultural features which are among and potentially a leading hub in the those attributes essential to improving Northern Portugal. the urban quality of life. They are also 2. Reconversion of former Porto one way of making the city known to slaughterhouse: The objective the world. Porto is, in fact, an open city of this project is to transform the with a vibrant cultural life, a resurgent slaughterhouse into a center or cluster entrepreneurial scene, a world–class for creative and high-tech companies, university and a unique city center which and start the construction by the middle carries a culture of diversity in its genes. of 2019. It includes offices, cultural This unusual capacity of combining our facilities, such as the Museum of cultural heritage with innovation gave Industry, galleries, a food laboratory, as origin to a set of unique projects for well as social areas with equipment, and the city, aiming to make Porto a port activities for the visitors and the local of talent and skills for the 21st century community. economy. 3. Renovation of Bolhão market: The So Porto has, in fact, emerged as an project, started in 2018 and expected outstanding example of growth, founded to be completed by 2021, intends to on factors, such as property assets, restore and renovate one of the main tourism, entrepreneurship dynamic and markets in the city center. Besides the new cultural life. All these factors have traditional food stands, the new market contributed to placing Porto at the top will have restaurants, cafés, space for of the list for the most fascinating and exhibitions and concerts, elevators, and sought–for cities worldwide. direct access to metro station. At the Municipality, we are investing Porto City Council continues to promote a lot to make Porto a new economic efforts to build a competitive business center in the region and in the country. environment capable of attracting high We are developing a new area of the added value investment and fostering city (Campanhã, on the east side), and the creation of qualified jobs. We have making relevant investments to prepare a specialized team at InvestPorto the city to be more competitive and dedicated to supporting strategic sustainable. investments in the city by providing tailor-made information and assistance. 1. Campanhã Intermodal Transport Terminal: The tender for the project It is essential to maintain this design was launched in 2016 and the momentum, and therefore we will construction is expected to be completed continue our commitment to supporting by 2021. The new terminal will integrate investors throughout the different different mobility solutions, including phases of the investment process. 4 Porto and Northern Portugal: a magnet for investment ey.com/attractiveness Porto and Northern Portugal are drivers of FDI diversification across Portugal First of all, we would like to thank all These perceptions have been decisive to Florbela Lima who contributed to this survey. This is Porto’s and Northern Portugal’s ongoing Partner, Strategy leader the first edition of EY Portugal Regional dynamism and investment intentions, Ernst & Young S.A. Attractiveness Survey. We hope that this which are on the rise. survey proves valuable in showing how As can be seen in this year’s EY and why Porto and Northern Portugal are Attractiveness Survey Portugal, FDI attracting global investors. dynamics for Portugal, as a whole, over This survey emerges in a context in which the past few years have been similar to investor’s confidence in Europe hit a the ones in Porto and Northern Portugal. six-year low in 2019, amid geopolitical However, Porto and Northern Portugal concerns from Brexit as well as rising are closing in on the lead spot for trade tensions and an increasing investment intentions in Portugal, while protectionist drive from key players in the the country itself is one among the top global economy. choices for short-term investment plans However, Porto and Northern Portugal, in Europe. have been showing continued resilience, These results reflect Porto’s and Northern first from the financial crisis and now Portugal’s potential as well as the from the decreasing pace of growth in the investment that has been done over the Eurozone, and are becoming increasingly past years, on national, regional and attractive for global investors. municipal levels. Recent developments After a tremendous surge in 2017, such as regulatory changes (e.g., overhaul foreign direct investment (FDI) in Porto of the rent control laws or reduction of and Northern Portugal is now realigning red tape), investment in infrastructure and with the long-term trend, but continuing education, and growing attention to local to grow at a faster pace than Portugal or governance and investor support have the EU as a whole. been instrumental for Northern Portugal's This year’s EY Investment Monitor reveals FDI performance. that, in 2018, Northern Portugal was As for the future, surveyed business able to secure 24 FDI projects, which leaders’ priorities are clear on what must corresponded to at least 2,754 new jobs be done if the region is to continue on created. In fact, according to the data this path: invest in skills and innovative gathered, Northern Portugal was the industries, as well as reduce taxation leading Portuguese region when it comes and increase small- and medium-sized to FDI job creation, contributing to 45% of enterprises (SMEs) support. the total jobs created. In fact, innovation and high–quality skills Investor perceptions on Porto’s and are widely regarded as decisive factors Northern Portugal’s attractiveness reflect for the future of the region, especially a high standing on key structural factors, considering the increasing prominence of such as quality of life, social stability, Porto in these areas, which led to the city infrastructure and labor (both for skills being considered the third fastest-growing and cost). European tech hub and the “best start-up friendly city of Europe”. To this effect, investors are also clear on naming talent, incentives, infrastructure In 2018, Porto and and a culture of innovation as the key- Northern Portugal were factors for leadership in these fields. leading Portugal when it came to FDI job creation. Porto and Northern Portugal: a magnet for investment 5 Executive summary Chapter 1: Why Porto and Northern Portugal Porto and Northern Portugal economies have been on the upswing, and these places have been successfully making a case as a magnet for FDI. Page 8 More % % % than 4.1 131 39 Gross domestic product (GDP) compound Coverage rate of imports by exports in 2018 In 2018, Northern Portugal’s share in the annual growth rate between 2014 and Although the region is economically diverse, total Portuguese goods exports was 39% 2017 its qualified manufacturing industry makes it Northern Portugal leads Portuguese goods Northern Portugal has been growing at an a net exporter of goods exports accelerated pace over the past few years Porto and Northern Portugal economies Best Startup-Friendly have been steadily growing and attracting City of Europe World Excellence Award 2018 increasing levels of investment. World Business Angels Investment Forum Porto GDP has been growing twice as fast as the country as a whole and available data indicates FDI Strategy that investor’s confidence remains high. Awards 2018 Project Wins and Incentives fDi Intelligence (2018) Porto Porto's and Northern Portugal’s pillars of development and attractiveness: Economy Quality of life Infrastructure Talent •Competitive and business- • Safe, open, tolerant •Strategic location • Highly qualified -friendly environment and welcoming place •World-class infrastructure and flexible workforce •Openness to innovation • Excellent climate •Good public transportation • High–quality universities, •Thriving start-up ecosystem • Low cost of living network and research facilities and centers •Highly qualified clusters • Vibrant and diverse culture •Low office rental costs • High language skills (fashion and services centers) • Renown gastronomy and high quality • Competitive labor costs 6 Porto and Northern Portugal: a magnet for investment ey.com/attractiveness Chapter 2: FDI in