French investment in Portugal reaches €18.8 billion

French investment in Portugal has reached €18.8 billion and is now linked to more than 130,000 jobs, according to a study reported by ECO.

The study, titled For a More Competitive Europe – The Contribution of the Franco-Portuguese Partnership, is due to be presented this Friday (June 19) at the 9th Franco-Portuguese Economic Conference at the Calouste Gulbenkian Foundation in Lisbon.

According to the study, France strengthened its position in 2025 as Portugal’s second-largest foreign investor, while also ranking as the third-largest destination for Portuguese exports and the country’s third-largest supplier.

More than 1,700 French subsidiaries now operate in Portugal, while around 12% of Portugal’s exports go to France. In 2024, Portuguese exports to France totalled approximately €16.3 billion, with industrial goods accounting for about 55% of the total, particularly transport equipment, machinery, equipment and metals.

Recent examples of French investment include BPCE’s €6.7 billion acquisition of Novo Banco and Alstom’s contract with Infraestruturas de Portugal to supply 153 trains.

But the report argues that Portugal is no longer viewed by French companies simply as a production or execution base. Increasingly, French groups are placing engineering, technology, innovation and strategic decision-making functions in the country.

ECO cites Natixis, Euronext, Airbus and BNP Paribas as examples of this shift. Natixis now employs more than 3,000 people in Porto in strategic areas previously concentrated in Paris, while Euronext has turned Lisbon and Porto into its third-largest global platform. Airbus, meanwhile, expects around a quarter of its global production of aircraft subassemblies to be manufactured in Portugal by 2026.

The automotive industry remains one of the strongest pillars of the French presence in Portugal. Alongside Stellantis in Mangualde and Horse in Cacia, dozens of component manufacturers operate in the country, including Forvia, Sarreliber, STE Plastic and the GMD group.

French influence is also visible in other major sectors. Vinci holds a strategic position through the concession of Portugal’s 10 airports via ANA, while Decathlon, Auchan, Intermarché and Leroy Merlin are among the French retail groups with a significant presence in the Portuguese market.

In the agri-food sector, Lactalis has expanded its production base in Portugal to around 800 employees, while Auchan also opened its first global food production unit in Venda do Pinheiro in 2025.

The report also identifies France as the third-largest destination for Portuguese exports of vehicles and components, worth around €1.3 billion in 2024, or approximately 19% of the sector’s external sales. In Mangualde, around 95.5% of Stellantis’ production is destined for export.

Talent, energy and stability attract investment

The study identifies three factors behind Portugal’s growing appeal to French companies: the country itself, its people and its role as a platform.

Portugal’s institutional stability, EU framework and openness to international markets are cited as key advantages for investors. The report also highlights the country’s qualified workforce, noting that 43% of Portuguese aged 25 to 34 have higher education qualifications.

Portugal’s English proficiency is another advantage, with the country ranked sixth globally, compared with France, in 49th place.

The country’s Atlantic location, links to Portuguese-speaking markets, logistics infrastructure – particularly Sines – and renewable energy profile are also seen as major strengths. According to the study, renewables already account for more than 70% of Portugal’s electricity consumption.

Quality of life is also presented as a differentiating factor. Portugal scored 7.3 in the European Commission’s life satisfaction index in 2024, ahead of France, Spain and Germany. The French community living in Portugal now exceeds 60,000 people.

Portuguese companies also looking to France

The relationship is increasingly bilateral, according to the study. Portuguese investment in France has also grown, led by companies including Tekever, EDP, Powerdot, Renova and Corticeira Amorim.

Tekever has doubled its investment in France to €200 million, while Powerdot has announced a €100 million investment plan to expand its electric charging network. Renova has invested around €12 million in expanding its Saint-Yorre industrial unit, and Corticeira Amorim maintains an important industrial presence in Lavardac, supplying the wine and champagne industries.

In 2024, Portuguese direct investment stock in France stood at around €3.2 billion, placing Portugal among the 25 largest foreign investors in the country.

“There are already Portuguese champions creating value in France, showing that this path is possible for other Portuguese companies,” said Fabrice Segui, CEO of BNP Paribas Portugal, quoted in the study.

The study also frames the relationship between the two countries in a wider European context, marked by reindustrialisation, energy transition and the need to strengthen strategic sovereignty.

“The Franco-Portuguese relationship brings together rare attributes: political trust, human depth, business presence, economic complementarity and European and international projection capacity,” said Pierre Debourdeau, managing partner of Eurogroup Consulting Portugal.

The Treaty of Porto, signed in February 2025 and in force since April 2026, is presented as a symbol of this renewed bilateral ambition. A protocol signed in Paris in March 2026 between Banco Português de Fomento and Bpifrance also created a platform to identify investment opportunities, support SME internationalisation and develop co-financing mechanisms in innovation, sustainability and industrial competitiveness.

Next phase of cooperation

Looking ahead, the study identifies three priorities for the next phase of Franco-Portuguese economic cooperation.

The first is energy transition. With renewables covering 71% of electricity consumption and Sines seen as a strategic asset, Portugal is described as having the conditions to become a European-scale digital and energy platform.

The second priority is strengthening industrial and engineering clusters already present in Portugal, turning the operations of groups such as Airbus, Renault, Forvia and Transdev into deeper ecosystems with more suppliers, research and development, and higher value-added functions.

The third is joint expansion into third markets, especially Portuguese-speaking countries, combining Portugal’s historic links in Africa and Latin America with the global reach of major French groups.

However, the study warns that the main risk to deeper Franco-Portuguese cooperation is not a lack of opportunities, but Portugal’s capacity to execute.

Business leaders and institutional figures interviewed for the study identified four structural obstacles: slow courts, regulatory uncertainty, lengthy licensing procedures and weaknesses in rail and mobility infrastructure.

The report also points to growing pressure on Portugal’s ability to retain skilled workers, particularly as international hubs expand without an equivalent response in affordable housing and transport.

To address these challenges, the study proposes five priorities: focusing on higher value-added sectors and functions, linking talent policy with housing and mobility, accelerating the integration of Portuguese SMEs into French value chains, strengthening clusters where energy, innovation and talent already coexist, and removing the main barriers to execution by improving regulatory predictability and the state’s response capacity.

This article is based on a report by ECO.