PORTUGAL Economy, tourism, policy and investment

“PORTUGALEconomic outlook

“

Portugal: Key Data

Area: 92.000 km2

Coastline: 2.600 km (including Atlantic islands)

Population: 10,6 million people

Education: 24% has a university degree

Languages: 60% speak a second language

The West Coast of Europe

Economic Outlook

-1,8-4,0

-1,1 0,9 1,6 1,4

1,5

-0,9 -0,31,2 2,0 1,7

2011 2012 2013 2014 2015 (e) 2016 (e)

(e) Estimated

Sources: INE Statistics Portugal; Bank of Portugal; European Commission; Eurostat

GDP (Growth %)[Portugal and Euro Zone]

Portugal GDP forecasts, 2017

European Commission

1,6%Unemployment Rate (%)[Portugal and Euro Zone]

12,915,8 16,4 14,1 12,6 11,2

10,2 11,4 12,0 11,6 10,9 10,0

2011 2012 2013 2014 2015 (e) 2016 (e)

Euro ZonePortugal

Euro ZonePortugal

“PORTUGAL

Tourism economic outlook

“

Tourism is a Strategic Activityfor the Portuguese Economy

Tourism Receipts in GDP (%)

2016 provisional

Sources: INE – Statistics Portugal; Bank of Portugal

4,6 5

,1 5,5 6

,2 6,7 7,0

2011 2012 2013 2014 2015 2016

6,0 6

,1

6,5

6,1

5,7

6,3

2011 2012 2013 2014 2015 2016

Tourism in Employment (%)

Tourism is a Strategic Activityfor the Portuguese Economy

In 2016,

Tourism Receipts represented…

2016 provisional

Sources: INE – Statistics Portugal; Bank of Portugal

Tourism Balance (million €)

5 Countries are the Main Tourism Markets

AZORES

MADEIRA

LISBON

NORTH

CENTRE

ALENTEJO

ALGARVE

13%

9%

3%

34%

14%

3%

2016 Overnight Stays per region (Share %)

2016 Overnight Stays per nationality (Million)

2016 provisional

Sources: INE Statistics Portugal

15,2(28%)

38,3(72%)

Portuguese Foreign

Total = 53,5 million

UK 9,2

Germany 5,3

Spain 4,0

France 3,9

Netherlands 2,4

Others 13,6

OVERNIGHT STAYS

(MILLION)

24%

5 720 6 1987 601 8 146 8 606 9 250

10 39411 451

12 681

2000 2005 2010 2011 2012 2013 2014 2015 2016

Growth in Tourism Demand

Overnight Stays (Million €)

Receipts (Million €)

2016 provisional; Sources: INE Statistics Portugal

33,8 35,5 37,4 39,4 39,7 41,645,9 48,9

53,5

2000 2005 2010 2011 2012 2013 2014 2015 2016

Hospitality Financial Performance

Receipts (Million €)

+36%

+14%

+9%

EBITDA

Gross Value Added

Turnover

2015/14

“PORTUGAL

Tourism Competitive Advantages

“

Competitiveness

According to the World Economic Forum’s Tourism Competitiveness

Index, Portugal is the 15th most competitive country worldwide

A reference for Sun and Sea…

Competitiveness in Tourism Resources

Mild Climate in Europe and 850K of Sandy

Beaches (that attract 90% of all

international tourists)

There are 314 distinguished quality beach

zones

Portugal has 209 beaches awarded the

"Beach Access, Beach for All“ project

Competitiveness in Tourism Resources

Rich and diverse culture

Urban Quality of Life

800 national monuments and more

than 2,500 buildings classified as

having public interest

15 UNESCO World Heritage sites

plus 3 Intangible Cultural Heritage

of Humanity

Competitiveness in Tourism Resources

Natural resources

36 Protected areas

Protected areas occupy 23% of

total countryUnique andPreserved Nature

Competitiveness in Tourism Resources

Ideal Place for any Sport

Best Golf Destination in

the World, with 88 golf

courses and over 1.8

million rounds of golf

Biggest Wave in the

World (Nazare) and

renowned place for

Surfing

Diversity of Landscapes

for Cycling and Walking

Competitiveness in Tourism Resources

Competitive conditions in the

property sector (prices)

Clear and transparent legal system,

tax rules, facilities for obtaining

residence permits

Special tax regime for non-habitual

residents

Great Opportunity for Residential Tourism

Competitiveness in Tourism Resources

Leading Destination for the Meeting

Industry (7th on the European ICCA and

12th of the world ranking)

1st in Labour Skills (World Economic

Forum’s Global Competitiveness Index

2016-2017 within 138 countries)

Safe and stable country (5th most peaceful

country in the World)

Excellent quality/price ratio

Business Environment

According to Doing Business 2017published by the World Bank,

Portugal is the 25th easiest country in the world and the

15th within the Europe,

among 190 countries analysed.

3rd in starting a business within Europe.

Takes 4 - 5 days and 5

procedures

Registering a property takes just 1 day and 1

process

SIMPLEX+

Leveraging Technology

Portugal ranks 12th position among EU-

28 countries in number of high-speed

fixed broadband

Tourism 4.0 as major program to bring

inovation and digitalization to Tourism

Enterprises

Strategic Location

Excellent and privileged economic

relations between Portugal, Brazil,

Angola and Mozambique

Daily flights to main European cities,

South America, North America and

Africa

Portugal

Iberian market

European market

Portuguese speaking

countries

10,6 M

51 M

495 M

220 M

Attractive Consumer Market (Million):

Air Conexion HUB

The country is well served of air connections to the main outbound marketsLisbon is a international hub to America, Africa and Europe

AFRICA

ASIA

NORTH

AMERICA

SOUTH

AMERICA

AUSTRALIA

EUROPE

• Lisbon is connected to 102

international cities: 64 in

Europe; 21 in America, 15 in

Africa and 2 in Asia

• Porto to 59: 52 in Europe, 5 in

America, 1 in Africa and 1 in Asia

• Faro to 55 European cities

• Funchal to 35 European cities

• Ponta Delgada to 9 international

cities: 6 in Europe and 3 in

America

“PORTUGAL

Attracting Foreign Investment

“

Incentives – General Framework

Financial Incentives Attractive Loans Venture Capital

European

Framework

2014/ 2020:

support

investment of

EUR 21 billion,

which favours a smart growth,

based on knowledge, innovation

and internationalization of its

economy. Focus on human

resources development and job

creation

Partnership with

financial system:

is available to companies at reasonable

costs and with long reimbursement

periods

Fiscal Incentives

The capitalization of Portuguese

companies is a strategic priority

for the Portuguese Government

In this context, the Government

launched new

venture capital

instruments

Portugal has increased its

competitiveness in Tax

Incentives for

Productive

Investment

Development of Tourism and

reduction of regional

disparities, induce the

creation of jobs

Investment Opportunities – Living in Portugal

OBJECTIVES

Reduce Seasonality, create a constant demand of products and

services, improving their quality + creating and maintaining

jobs and building a destination image of excellence.

ADVANTAGES

FINANCIAL

SUPPORT

- Huge diversity of landscapes and environments in a small

area

- Safe investment in a Peaceful and stable country

- Possible rentability of properties

Tax regime for non-habitual residents -a special regime for non-

habitual residents, aimed at attracting foreign investors

through favorable income tax rates. Discover more at

http://www.livinginportugal.com/de/

Investment Opportunities – REVIVE

OBJECTIVES

Properties owned by the State with

architectural, historical and cultural

value.

Goal is restoring properties related to

Tourism

PROCESS

FINANCIAL

SUPPORT

http://revive.turismodeportugal.pt/

Properties shall be subject of Public Bid

• Available credit lines with mutual

guarantees and specific credit lines

with Banks

“PORTUGAL

The Future

“

10 challenges for a 10 year strategy

1. PEOPLE - Promoting jobs, qualifying and valuing people and increasing income of tourism professionals

2. COHESION - Mitigate regional asymmetries

3. GROWTH IN VALUE - Growing more than competition in tourism receipts

4. SEASONALITY – Reduce seasonality

5. ACCESSIBILITIES - Reinforcing accessibility to Portugal and promoting mobility within the territory

6. RESEARCH - Understand inbound markets and adapt public & business strategies to trends and changes in demand

7. INNOVATION - Stimulate innovation and entrepreneurship

8. SUSTAINABILITY - Ensure the preservation and sustainable economic valuation of cultural and natural heritage

9. SIMPLIFICATION - Simplify legislation and streamline administration

10. INVESTMENT - Guarantee financial resources and ensure their proper implementation

10 years from now

Tourism Strategy 2027 – Lead the Tourism of the Future

To affirm tourism as a hub for economic, social and environmental development throughout the whole territory, positioning Portugal as one of the most competitive and sustainable tourist destinations in

the world.

Strategic Axes for Tourism

1. VALUE THE TERRITORY2. STIMULATE THE ECONOMY3. POTENTIATE KNOWLEDGE4. GENERATE NETWORKS AND CONNECTIVITY5. HIGHLIGHT PORTUGAL

10 years from now

SUSTAINABILITY

Recent examples

PORTUGAL thank you!