China 5th biggest investor in Portugal

 In Bi-lateral trade, DFI, Investment, News

China is the 5th most important investor in Portugal according to the latest figures from the Bank of Portugal.

The BoP was referring to Direct Foreign Investment (DFI) which it states is 6.8% (€10.6Bn) from a total of €154.9Bn.
The numbers were released by the central bank on Tuesday and showed that China had risen from ninth position (2% worth €2.9Bn). The United States has also risen in terms of DFI from 12th place to 8th place.
The Chinese economy is the economy that most uses subsidiaries in Luxembourg and Hong Kong to make investments in Portugal, which reduces its weight on previous statistics that looked at the origin of investments and not the final beneficiary.
France and the USA have also benefited from this change: “New statistics show that China, the United States and France have invested in Portugal via other countries”, said the central bank.
When looking at the stock of direct foreign investment by final investor (2021) China entered the top 10 behind the biggest investor Spain (€23.6Bn), Portugal (€23.5Bn) (meaning Portuguese companies with subsidiaries outside Portugal), France (€17.1Bn) and the United Kingdom (€13.3Bn).
In the case of Portugal, this phenomena is called “round tripping” (round-tripping is a method of structuring to evade paying such high taxes, among other things) and is associated with investment from Portugal and to Portugal being bypassed via intermediary entities in lower tax countries such as the Netherlands (59%) and Luxembourg (17%) respectively”, states the Bank of Portugal.
After China comes the Netherlands (€8.7Bn), Germany (€7.6Bn), the United Sates (€7.1Bn), Brazil (€5Bn) and Luxembourg (€4.3Bn). These are followed by Angola and Switzerland. In total the stock of direct foreign investment was €154.9Bn in 2021.