Overview of Portugal - Opportunities and Economic Environment

Belfast, 10th September 2010

Think Global, Think PortugalA country of opportunities

Think Global, think Portugal

• “Portugal is not in same boat with Greece. This is very visible when we look at the facts and figures. Portugal is not Greece", Jean-Claude Trichet - President of the European Central Bank (ECB)

• “Comparisons between Greece on the one hand and Spain and Portugal do not reflect reality. Economies of Spain and Portugal's are not comparable to that of Greece”, Angel Gurria - Secretary General of the Organization for Economic Cooperation and Development.

• “The financial situation in Spain and Portugal is not comparable to that in Greece. We don't see the cases of Portugal and Spain as comparable to Greece", German Finance Ministry spokesman.

• “Portugal is in a totally different situation than Greece. Greece is much more oriented to the Eastern part of Europe, to the Balkans, Portugal is in the crossroads of the southern emerging countries”, Ricardo Salgado - Chairman of Espirito Santo Financial Group [ESFG] and director at NYSE Euronext.

According to the IMF, the Portuguese banking system has weathered the global financial crisis relatively well, reflecting pre-existing strengths. Portuguese banks’ borrowings from the Central Bank amount to less than 2% of banks’ assets. This is below the levels observed in France, Spain, Germany and Greece.

Think Global, think Portugal

Country’s strenghts (in numbers)

• 9.4% of GDP in 2009 (compared with 12.7% in Greece)

• 85% of GDP 2010 (compared with 124% in Greece)

• Tough fiscal measures: Between 2005 and 2007, Portugal cut its budget deficit in half, from 6.1% of GDP to 2.6%.

• Portugal had lowered the deficit to 2.8% of GDP, in an environment of moderate growth.

• A four-year austerity programme to chop the budget deficit again, this time to 2.8% of GDP in 2013, has been adopted.

• Age-related public spending will rise by only 2.9% of GDP in Portugal over the next 50 years (compared with a euro-area average of 5.1% and a startling 16% in Greece)

• In the EU context, Portugal is well placed in what concerns public debt affordability and sustainability.

• Activity indicators are suggesting an exports-based recovery in 2010-2011. GDP could rise close to 0.6% in 2010 (after -2.7% in 2009).

Think Global, think Portugal

Core competitive advantages:

Modern country in transition from low-cost manufacturing to knowledge-based

industries.

In five years, Portugal has become a European leader in renewable

energy. It has also cut civil-service jobs from 747,000 to 675,000. It sends some 35% of

its young people to university.

It is investing over 1.5% of GDP in research, much more than Spain. At the same time,

however, Portugal is losing some of its EU structural funds to the club’s newer, poorer

members from Eastern Europe.

Higher growth in the future come from improved confidence from fiscal consolidation;

An expansion of the relevant market of the economy, mainly to Africa and Latin

America, taking advantage of historical and cultural ties, as well as of geographic

proximity (and acting as a bridge to these emerging economies);

• Access to Markets

• Great and Reliable Infrastructures

• Technology and Innovation

• Human Resources Performance

• Attractive Business Environment

• Recent FDI Track Record

• Government Support

• Aicep Portugal Global

Index

A country of opportunities

Portugal is an open door to the Portuguese

speaking countries, which offer a market of 250

Million people.

As with all EU countries, Portugal’s borders and

ports are completely open to the free flow of

trade with other EU member countries.

Portugal has a politically stable environment with a democratically elected parliamentary

government and is welcoming foreign business and investment.

As one of the charter members of the European

Union (EU), it is fully integrated with the EU and

uses the Euro currency.

Access to Markets

Strategic Location and Global ExperienceStrategic Location and Global ExperienceStrategic Location and Global ExperienceStrategic Location and Global Experience

West Side Opportunities

We provide a transatlantic bridge to the Americas. We have an open door to the Atlantic ocean being a strategic point for important international traffic canals.

East Side Opportunities

We are a privileged entry point for the EU

as well as strategic platform into the

African markets and others.

Free flow of capital and goods within the European Union

(Distance by air)(Distance by air)

1h 2h 3h 4h

Lisbon

Stockholm

Berlin

Rome

Paris

London

Madrid

THINKStrategic location. Global partners.

THINKStrategic location. Global partners.

A country of opportunities

Great and Reliable Infrastructures

4 International airports

in the mainland (one

under certification) with

regular daily passenger

flights to major

European cities;

New projects in place,

namely the new airport

at Lisbon and the TGV

lines linking Portugal

with Spain.

Airport InfrastructuresAirport InfrastructuresAirport InfrastructuresAirport Infrastructures Road SystemRoad SystemRoad SystemRoad System

One of the most

developed

roadway

systems in

Europe;

Excellent

international and

national

accessibility.

Madrid: 627 Km (time: 06h00)

Valencia: 981 Km (time: 09h00)

Madrid: 627 Km (time: 06h00)

Valencia: 981 Km (time: 09h00)

Within a sample of 150 countries, Portugal is the 28th in the Logistic Performance ranking presented

by World Economic Forum 2008

Within a sample of 150 countries, Portugal is the 28th in the Logistic Performance ranking presented

by World Economic Forum 2008

Paris: 1.800 Km (time: 17h00)

Frankfurt: 2.400 Km (time: 23h00)

Moscow: 4.800 Km (time: 51h00)

Paris: 1.800 Km (time: 17h00)

Frankfurt: 2.400 Km (time: 23h00)

Moscow: 4.800 Km (time: 51h00)

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

PortoPorto

LisbonLisbon

BejaBeja

FaroFaro

A country of opportunities

Great and Reliable Infrastructures

4 international rail lines exiting Portugal;

Logistic chain, with rail-road-ports terminals spread throughout the country;

Products transported by train include containers, construction materials, timber, agro-industrial, coal, cars and vans, fuel, and chemicals;

Two main containers terminals, one at Bobadela and the other at Leixões.

Railway SystemRailway SystemRailway SystemRailway System SeaportsSeaportsSeaportsSeaports

There are 9 sea ports in the mainland, all receiving international traffic;

The Sines port receives 38% of all cargo ships arriving and departing Portugal, followed by Leixões (20%) and Lisbon (17%);

Regular cargo lines, linking Portugal to North, Central and South America, Asia, Africa, Europe and Middle East.

LeixõesLeixões

BobadelaBobadela

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

A country of opportunities

Technology and Innovation

The main advantage is the People. The Portuguese People are available, flexible, dedicated, skilful and always ready for a challenge.

Our philosophy says it all: “nothing shared, nothing gained”

Siemens Portugal

Labour productivity in Portugal has been increasing over the past years, so nowadays productivity standards are very good. When comparing with countries known for high levels of productivity, such as Germany and France, I think Portugal has reached their levels.

Microsoft Portugal

Digital Terrestrial Television It is in the implementation phase and it is expected full country-coverage by the end of 2010.

Next Generation Network

Recently announced by the Government, NGN will be deployed over the country and the goal is to have 1Million users by 2010 as well as schools and public institutions. It is already boosting the telecommunications services and the fiber optic industry in Portugal.

Technological InfrastructuresTechnological InfrastructuresTechnological InfrastructuresTechnological Infrastructures

Broadband Penetration According to OECD broadband portal (June 2010), Portugal is TOP 10 in broadband penetration (net increase per 100 inhabitants), among 27 EU countries."... (the Portuguese

Technological Plan) is probably the best I have ever seen worldwide"

Craig Barrett, Chairman of the Board of Intel Corporation - August, 1st, 2008

"... (the Portuguese Technological Plan) is probably the best I have ever seen worldwide"

Craig Barrett, Chairman of the Board of Intel Corporation - August, 1st, 2008

Technological Plan, a central pillar of Government policy, is designed to lift public and private spending on research, expand training in advanced technologies and increase the scientific output of universities.The mobilization program revolves around three key words: knowledge, technology and innovation.

Technological Plan, a central pillar of Government policy, is designed to lift public and private spending on research, expand training in advanced technologies and increase the scientific output of universities.The mobilization program revolves around three key words: knowledge, technology and innovation.

Knowledge and InnovationKnowledge and InnovationKnowledge and InnovationKnowledge and Innovation

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

An integrated network between several points existing in national territory boosted by the management entity Mobi.E which shall allow the supply of electric vehicles by way of a charging card.

An integrated network between several points existing in national territory boosted by the management entity Mobi.E which shall allow the supply of electric vehicles by way of a charging card.

Technology and InnovationEnergy Efficiency

Supply SystemHence, the Electric Mobility System has come about in Portugal.  An integrated network between several points existing in national territory boosted by the management entity Mobi.E which shall allow the supply of electric vehicles by way of a charging card.

Supply SystemHence, the Electric Mobility System has come about in Portugal.  An integrated network between several points existing in national territory boosted by the management entity Mobi.E which shall allow the supply of electric vehicles by way of a charging card.

The Portuguese Government and the Alliance Renault-Nissan announced a partnership to promote the zero-emissions mobility in the country.

Portugal will be one of the 1st world markets to introduce Renault-Nissan electric vehicle models, in 2011.

Portugal will be one of the 1st world markets to introduce Renault-Nissan electric vehicle models, in 2011.

A country of oportunitiesA country of oportunities

Many Universities in Portugal now offer degrees in

science and engineering, management and technological

areas that teach the skills needed to succeed in the

industry.

Degrees, Masters and PhDs available in areas such as:

Computer Science, Design, Engineering, Health and

Pharmaceutical, Food and Beverage, Environment,

Energy and Forest and Textile.

Many Universities in Portugal now offer degrees in

science and engineering, management and technological

areas that teach the skills needed to succeed in the

industry.

Degrees, Masters and PhDs available in areas such as:

Computer Science, Design, Engineering, Health and

Pharmaceutical, Food and Beverage, Environment,

Energy and Forest and Textile.

EducationEducationEducationEducation

Portuguese Human Resources are a main competitive advantage for the development of high

value-added activities.

Portuguese Human Resources are a main competitive advantage for the development of high

value-added activities.

Despite the raise of skills of the work force,

necessary to shift towards higher value-

added and more competitive products, the

relation skills-wages continue to be one of

the best in Europe.

In a modern world, in which changing is a

constant, the market conditions such as

flexibility and adaptability of employees are

crucial, determining a great proportion of

business attractiveness in a country.

Portugal is in the TOP 10 of the EU in what

concerns to flexibility and adaptability of

employees.

2nd place for

Labour Costs

in EU

Source: Global Benchmark Report (2008)

People of SkillsPeople of SkillsPeople of SkillsPeople of Skills

9th place for

flexibility &

adaptability

in EU

A country of opportunities

Human Resources PerformanceCHOOSE

Great infrastructures. Innovative country. Skilled and talented people. CHOOSE

Great infrastructures. Innovative country. Skilled and talented people.

A country of opportunities

Did you know that…Did you know that…Did you know that…Did you know that…

Portugal is TOP 4 in the Eurozone in the number of science

PhD’s per 1,000 inhabitants between the age of 25 and 34,

according to Global Benchmark Report, 2010?

Portugal is TOP 4 in the Eurozone in the number of science

PhD’s per 1,000 inhabitants between the age of 25 and 34,

according to Global Benchmark Report, 2010?

PORTUGALPORTUGAL

22ndnd Best EU Best EU performanceperformance

Growth rate per dimension

Source: European Innovation Scoreboard 2008 – January 2010

According to Eurostat, the average

growth rate of hourly labor costs

(2003-2007) in Portugal is + 4,21%

and the same rate in Central and

Eastern European countries is

+11,65%?

According to Eurostat, the average

growth rate of hourly labor costs

(2003-2007) in Portugal is + 4,21%

and the same rate in Central and

Eastern European countries is

+11,65%?

Human Resources Performance

Multilingual CapabilitiesMultilingual CapabilitiesMultilingual CapabilitiesMultilingual Capabilities

A considerable percentage of Portuguese are able to hold a

conversation in one foreign language besides their mother language.

English, French and Spanish are the most known languages.

Source: Eurobarometer “EUROPEANS AND THEIR LANGUAGES” 2006

English is second language from 1st grade? English is second language from 1st grade?

At least three

At least three

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

CHOOSEGreat infrastructures. Innovative country. Skilled and talented people.

A country of opportunities

Transatlantic Bridge towards Education and R&D Transatlantic Bridge towards Education and R&D Transatlantic Bridge towards Education and R&D Transatlantic Bridge towards Education and R&D

Attractive Business Environment

#4

Entrepreneurial activity, 2009

Entrepreneurship Entrepreneurship Entrepreneurship Entrepreneurship

Portugal is part of the

countries with the

greatest share of new

entrepreneurs.

Portugal is in the top 5

of Entrepreneurial

activity, above the

Euro zone and OECD

average.

Source: Global Benchmark Report (2010)

Five programmes focused on specialised areas are being developed with four U.S. Universities: MIT, Carnegie Mellon, the University of Texas at Austin, Harvard Medical School and Germany’s Fraunhofer Organization.

These programs include Masters, PhDs, post-graduate studies, MBAs and R&D.

Five programmes focused on specialised areas are being developed with four U.S. Universities: MIT, Carnegie Mellon, the University of Texas at Austin, Harvard Medical School and Germany’s Fraunhofer Organization.

These programs include Masters, PhDs, post-graduate studies, MBAs and R&D.

FINDYour partner. Global brands. Innovative products. Global

solutions.

FINDYour partner. Global brands. Innovative products. Global

solutions.

Competitive Electricity Costs Competitive Electricity Costs Competitive Electricity Costs Competitive Electricity Costs Ease of Setting up a BusinessEase of Setting up a Business

Source: Global Benchmark Report (2010)

#3

Portugal is one of the TOP 3 countries with fewer legislative barriers for entrepreneurial activities

#4

Electricity costs for industrial clients, 2008

When deciding for an investment location, the cost of electricity is an important parameter and Portugal offers a

competitive advantage in this area.

A country of opportunities

Attractive Business EnvironmentFIND

Your partner. Global brands. Innovative products. Global solutions.

FINDYour partner. Global brands. Innovative products. Global

solutions.

A country of opportunities

Portugal is the 13th most peaceful country in the World, among 144 Countries ranking in The Global Peace Index 2010, the first study to rank countries around the world according to their peacefulness.

Portugal’s score went up from 14th place in 2009 to 13th in 2010, ahead of Germany, Belgium or Switzerland.

Factors examined by the authors include levels of violence and organized crime within the country and military expenditure.

Portugal is the 13th most peaceful country in the World, among 144 Countries ranking in The Global Peace Index 2010, the first study to rank countries around the world according to their peacefulness.

Portugal’s score went up from 14th place in 2009 to 13th in 2010, ahead of Germany, Belgium or Switzerland.

Factors examined by the authors include levels of violence and organized crime within the country and military expenditure.

Source: Global Peace Index 2010, Economist Intelligence Unit

(Nations considered the most peaceful have lower index scores)

Source: Global Peace Index 2010, Economist Intelligence Unit

(Nations considered the most peaceful have lower index scores)

SocialSocial ClimateClimateSocialSocial ClimateClimate

Mild climate

Unique luminosity

Hospitable people

Landscapes

Original gastronomy

Social stability

Entrepreneurship

Simplification of bureaucracy

Security

Source: Lisbon was awarded “Best Destination 2010”, European Consumers Award , 2010Source: Lisbon was awarded “Best Destination 2010”, European Consumers Award , 2010

Portugal as a HotspotPortugal as a HotspotPortugal as a HotspotPortugal as a Hotspot

Quality of LifeENJOY

Quality of life. Hospitality. Beautiful landscapes. Culture heritage.

ENJOYQuality of life. Hospitality. Beautiful landscapes. Culture heritage.

Opening of the new Centre for Cisco Portugal operations in Lagoas Park-Lisbon. This facility also houses the “European Hercules Center”. This Centre provides qualified support to the European operations. It replaces and expands the services that were previously secured by the Dutch offices. It further reinforced its presence with the creation of 150 new positions for highly technological qualified people.

The Swedish Group Swedwood (industrial branch of the IKEA Group) chose Portugal to install 3 factories for the production of wood furniture, including Kitchen fronts, MPS and board on frame products. Already in operations in Paços de Ferreira, the 130 M€ project already created 600 new jobs.

Microsoft acquired the Portuguese company Mobicomp, market leader in mobile solutions. Windows mobile users around the world (that sold more than 20 million licenses) will benefit from a technology made in Portugal.

Investment of approximately 60 million € in the construction of a new plant, located at the Estarreja Chemical Complex. The plant is outfitted with state-of-the-art technology which will be used to convert natural gas into hydrogen and carbon monoxide in order to maximize production efficiency and minimize the environmental impact.

Announced the construction of two factories in Évora: one of the factories will produce metallic structures and the other composite materials, used for the construction of airplanes. The project is on the set up phase and will create 570 direct jobs.

€ 250 million investment by Nissan Europe for the construction of a lithium-ion battery factory for electric cars in Portugal. This project is scheduled to start in 2012 and will create 200 direct jobs.

A country of opportunities

Recent FDI Track RecordDISCOVER

Leading companies choose Portugal. Why?

DISCOVERLeading companies choose Portugal. Why?

Employment of young looking for 1st job and short-term unemployed:

- Exemption from social security contributions for a 3-year period, or;

- Exemption from social security contributions for a 2-year period and direct grant of 2,500€.

A country of opportunities

Financial Incentives:

- Interest free loan for up to 7 years, with 3

years grace period;

- Conversion to cash grant upon

accomplishment of contractual goals, up to

75% of the financial incentive.

Government Support

Financial and Tax Incentives (QREN)Financial and Tax Incentives (QREN)Financial and Tax Incentives (QREN)Financial and Tax Incentives (QREN) Job Creation IncentivesJob Creation IncentivesJob Creation IncentivesJob Creation Incentives

A detailed incentives offer can be prepared for a specific investment and business plan.A detailed incentives offer can be prepared for a specific investment and business plan.

Tax Incentives:

- Corporate tax credit of up to 20% of the investment;

- Exemption of local taxes.

Tax Incentives:

- Corporate tax credit of up to 20% of the investment;

- Exemption of local taxes.

12-month Internships for graduates:

- 20% direct support to internship grant;

- 100% support of food and insurance expenses.

12-month Internships for graduates:

- 20% direct support to internship grant;

- 100% support of food and insurance expenses.

• Public business entity, flexible, free of charges and streamlined

services;

• Dynamic approach focused on the client / investor;

• Promoting a direct negotiation with companies, through which a

tailored approach to incentives may be applied in order to define a

global package that fully satisfies the investor's needs;

• Single point of contact in all phases: pre-investment, incentives

negotiation, settling in and after care.

TRUSTYour reliable partner.

TRUSTYour reliable partner.

Aicep Portugal Global

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AICEP Portugal GlobalAv. 5 de Outubro, 101

Phone: +351 21 790 95 00Fax: +351 21 790 95 99

AICEP Portugal GlobalAv. 5 de Outubro, 101

Phone: +351 21 790 95 00Fax: +351 21 790 95 99

CHOOSECHOOSE

DISCOVERDISCOVER

THINKTHINK

ENJOYENJOY

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FINDFIND

PORTUGALPORTUGALYour business destination in Europe’s West Coast.

PORTUGALPORTUGALYour business destination in Europe’s West Coast.