The Competitive Advantage Investment officials are quick to point out that companies that locate in Portugal do not have to choose between low labor costs or high productivity. The government is justifiably proud that Portugal's labor force offers both. According to a survey published by the Institute of the German Economy in 1996, Portuguese workers were No. 2 in the number of hours worked, averaging 42 hours per week. There are minimal language barriers between foreign managers and the local work force. Most Portuguese are multilingual, commonly speaking English and French in addition to their native Portuguese.
Every Portuguese student is required to study two foreign languages.
Portugal spends 5.5 percent of GDP on education, more than France, Spain, Germany and the United Kingdom. In 1996, Portugal was one of the European countries that experienced the fewest number of working days lost to strikes. Portuguese authorities say that foreign investors who compare Portugal with other European nations will find generous and competitive financial and tax incentives, the freedom to establish in all private sectors and guarantees protecting the free international transfer of dividends and capital gains proceeds from sales of investments. To encourage foreign investment, Portugal has instituted competitive investment incentives including cash grants, interest-free loans, tax credits and abatements, reductions in taxes payable on dividends received from certain subsidiaries, and exemptions for companies engaged in certain sectors. In addition, there are accelerated depreciation rates for certain industry types.