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.
Local authorities can offer specific incentives.
Portugal's open door policy on investment and its privatization program have created investment opportunities in a number of industries, including automotive manufacturing, plastics, high technology, electronics, banking and telecommunications. Since it became a full member of the European Union in 1986, Portugal has become widely recognized as a great place to do business in Europe. A pleasant climate A Bright Future ICEP, Portugal's foreign investment agency, forecasts that 1998 could be a record year for the country. Still, Portugal faces competition from central and eastern Europe. Portugal's biggest handicap is the work force's educational and professional qualifications.