Portugal is a developed country in Southwestern Europe (Iberian peninsula), a member of the European Union since 1986.
Portugal is a developed country with a high-income advanced economy and a high living standard. In the recent decades Portugal has become a diversified and increasingly service-based economy. Main industries of the Portuguese economy include automotive, aerospace, electronics and textiles as well as textiles, clothing, footwear, wood and cork.
In 2010-2013 Portugal suffered a financial crisis, among the other reasons resulted from the collapse of Banco Português de Negócios (BPN) and the bankruptcy of Banco Privado Português (BPP). In 2011 Portugal received a financial bailout from International Monetary Fund and the European Union. In August 2014 the largest bank in Portugal, Banco Espirito Santo (BES) went bankrupt. Currently Portuguese banking sector is dominated by domestic banks with a number of foreign-controlled banks operating in Portugal.
Portugal joined the Euro Area on 1 January 1999.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|184.9 bln EUR (+0.03%)||17 900 EUR (+0.03%)||1.4 % (2015: 1.8 %)|
According to Eurostat, nominal GDP of Portugal in 2016 was 184.9 bln EUR.
Portugal underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.4% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 1.4% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 1. Real GDP Growth in Portugal. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Portugal was 17 900 EUR.
Portugal has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -22.2% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 2. GDP Per Capita at Purchasing Power Parity in Portugal; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|1.0 % (Aug 2017: 0.2 %)||1.6 % (Aug 2017: 1.3 %)||0.6 % (2015: 0.5 %)|
According to Eurostat, inflation rate in Portugal in 2016 expressed as annual percentages of average consumer prices was 0.6% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 3. Inflation Rate in Portugal. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|11.2 % (2015: 12.6 %)|
|Government Bond Yield (Sep 2017)|
|2.63 % (Aug 2017: 2.83 %)|
Chart 4. Government bond yield of Portugal. Source: Eurostat.
|BB+ (speculative), outlook stable||Ba1 (non-investment grade speculative), outlook stable|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Portugal signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Portugal and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Portugal signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Portugal and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Portugal signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Portugal has signed bilateral agreements with 58 jurisdictions to automatically receive information:
Portugal has signed bilateral agreements with 70 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Portugal|
|IGA in effect since 06 August 2015, Model 1|
Portugal has FATCA agreement with the U.S. in effect since 06 August 2015 (Intergovernmental Agreement Model 1). Financial institutions operating in Portugal are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Portuguese financial accounts hold in U.S. financial institutions will be reported to Portuguese authorities.
|Financial Market Development|
|3.3 (max 7.0), 116th out of 138 countries|
|3.1 (max 7.0), 129th out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Portugal is scored 3.3 out of maximum 7.0 and ranked 116th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 2.8 (131st place).
Chart 5. Financial Market Development in Portugal. Source: WEF.
Soundness of banks is scored 3.1 bringing Portugal into the 129th place.
Chart 6. Soundness of Banks in Portugal. Source: WEF.
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Portugal are summarised in Table 1.
|Scheme Participants||all credit institutions operating in Portugal, branches of non-EU banks, branches of Portuguese banks abroad|
|Scheme Exemptions||branches of EU-banks (covered by their home countries)|
|Covered Accounts||any type of deposit, certificates of deposit|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 1. Deposit guarantee scheme in Portugal.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Euro)||Foreign Currency|
|A1 (upper medium grade)||A1 (upper medium grade)|
Local currency (Euro) deposit ceiling for Portugal is set to A1 (upper medium grade), foreign currency deposit ceiling is A1 (upper medium grade).
|Average Deposit Rate (Aug 2017, EUR)|
|0.22 % (unchanged)|
Chart 7. Deposit Rates in Portugal. Source: ECB.
|Number of Banks|
|Consolidated Assets (2016)|
|385.89 bln EUR (-5.34%)|
|Recent Changes (2016)|
|new banks: 3, closed banks: 1|
Currently there are 150 credit institutions operating in Portugal.
In 2016 consolidated banking assets in Portugal were 385.89 bln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.
Chart 8. Consolidated banking assets in Portugal.
Recent structural changes (2013 - 2016) of the banking sector of Portugal are summarised in Table 2.
|Number of Opened Banks||3||1||1||3|
|Number of Closed Banks||1||4||4||1|
Table 2. Recent structural changes in the banking sector of Portugal.
The list of the most recently opened banks in Portugal is provided in Table 3.
|WIZINK BANK SA - SUCURSAL EM PORTUGAL (new)||December 2016|
|Bankinter, SA - Sucursal em Portugal (new)||April 2016|
|BANQUE DE PATRIMOINES PRIVÉS - SUCURSAL EM PORTUGAL (new)||February 2016|
|BANCO CTT, SA (new)||October 2015|
|BNI - Banco de Negócios Internacional (Europa), SA (new)||August 2014|
|Credit Suisse (Luxembourg), SA - Sucursal em Portugal (closed)||November 2013|
|Bank of China (Luxembourg), SA Lisboon Branch - Sucursal em Portugal (new)||August 2013|
|Volkswagen Bank GmbH - Sucursal em Portugal (new)||March 2013|
Table 3. The most recently opened banks in Portugal.
All the credit institutions operating in Portugal can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||24|
There are 24 branches of foreign banks from 10 different countries in Portugal. Table 5 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|
|1||Caixa Geral de Depósitos, SA|
|2||Banco Comercial Portugues, SA (BCP or Millennium BCP)|
|3||Novo Banco, SA|
|4||Banco BPI, SA|
|5||Banco Santander Totta, SA|