Portugal Secures Second Place in Western Europe for Foreign Investment Potential

The ranking, compiled from global data on entirely new investment projects, placed Portugal second in the region and 16th worldwide in 2025, confirming that the country is more than just a peripheral market it is increasingly seen as a strategic location for international business expansion.

The Greenfield FDI Performance Index measures how well countries attract new investment projects relative to the size of their economy. This is particularly important because it reflects the ability to secure growth opportunities that are not simply linked to the market’s size, but rather to its competitiveness, policy environment, and attractiveness to investors. Portugal’s result shows that, compared with other Western economies, it punches above its weight in attracting fresh capital and international companies.

While some might expect larger economies to dominate these rankings, the study shows that smaller and mid-sized countries with the right conditions can excel. Portugal’s combination of geographic position, EU membership, skilled workforce, and improving infrastructure continues to make it a compelling choice for companies seeking a base in Europe. This is especially relevant in sectors such as renewable energy, technology, tourism, and advanced manufacturing, where the country has shown consistent growth and adaptability.

The broader index also revealed interesting trends across other regions. Several Gulf countries, for example, highly scored thanks to their role as hubs for finance, services, and technology in the Middle East. In Western Europe, only Monaco ranked above Portugal, although its result came from a much smaller number of projects in a highly specialized market. Spain followed closely behind, reflecting the strong investment climate across the Iberian Peninsula.

The report also highlighted that Portugal and Spain both increased their number of investment projects in 2024 compared with the previous year, even though their index scores dipped slightly due to faster-than-average GDP growth in the euro area. This suggests that while their economies are expanding, their ability to keep attracting investment at a pace beyond their economic size remains strong.

For Portugal, this position in the global ranking is not just a number, it signals to international investors that the country remains competitive even as economic conditions shift. The challenge ahead will be to sustain this momentum by continuing to improve the business environment, supporting innovation, and investing in sectors where Portugal can lead, such as green technologies, digital industries, and value-added exports.

The latest data reinforces the idea that Portugal’s role in the international investment landscape is evolving. No longer just a destination for traditional sectors, it is becoming a platform for high-value, future-oriented projects. For anyone following the country’s economic trajectory, these results are both a confirmation of progress and a reason to look ahead with confidence.

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes