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Portugal

Basic Information

Area: 92,345 km²

Calling code: +351

Population: 10,584,344

Official Language: Portuguese, Mirandese

Time zone: WET (UTC0), Local time: 08:54

Overview

The country of Portugal is located on the western side of the Iberian Peninsula, and it shares 1,214km of borders with Spain. Its total territory covers 92,090 km2, with a population of 10.7 million, 59% of which live in urban areas. The capital city of Lisbon is located in the southern region and has a population of 480,000. Other cities with large populations are Porto, Queluz, Vila Nova de Gaia and Viseau.

The entire country is divided into 18 districts, the largest area being the district of Beja, which spans 10,225km2. It is also divided into 308 municipalities, which are grouped together to allow governing councils the power to oversee the running of local services. Portugal is a member of several organizations such as the North Atlantic Treaty Organization (NATO) and the World Trade Organization (WTO). It became a member of the European Union (EU) in 1986, and uses the euro currency (EUR), which fully replaced the Portuguese escudo (PTE) in 2002.

Economy

The tertiary sector now employs over half the population and accounts for 72% of the countries total GDP figure, which is $243 billion. Many of the large corporations are located in the business districts of Lisbon and Porto, and the largest employers in the country are EDP-Energies de Portugal (utilities), BCP (banking), Portugal Telecom (telecommunications) and Sonae SGPD (Conglomerate).

The size of the agricultural sector has decreased dramatically over the years, from having a share of 25% of the total GDP in 1960, to just 4% in 2009, although it still employs 13% of the total labourforce. Most of the agricultural land is farmed in southern areas where olive, citrus and cereal crops are harvested. The Douro Valley in the north is classed as a UNESCO world heritage site, and has become one of the largest port and wine producing areas in Europe. The high quality food and drink products are exported mainly to Spain, France and Germany.

In 2009 the country exported $41.43 billion of goods, mostly agricultural products, foodstuffs, chemicals, oil products, plastic, rubber, leather, textiles and machinery. Portugal's major export partners are Spain, Germany, France, Angola and the United Kingdom.

Tourism is prominent to the economy with over 22 million tourists visiting the country in 2009. Popular tourist hot-spots include the Algarve, Madeira and Lisbon.

Infrastructure

A total of 65 airports are located in the country, the largest being Lisbon Portela Airport (LIS), which handles 13.6 million passengers annually and connects Lisbon to numerous international destinations. Other major airports include Faro International Airport (FAO) and Porto's Francisco Sá Carneiro Airport (OPO).

The majority of the railway transportation system is maintained and operated by the state owned Rede Ferroviária Nacional (REFER). The train system has been developed to travel at high speeds for more convenient transportation of both passengers and goods. The two largest cities of Lisbon and Porto have a underground metro system, while Porto has a tram line in operation. Portugal's road network spans the entire country and consists of expressways, ring-roads and smaller linking roads. It is also possible to access the neighbouring country of Spain via the road network.

The country has a total of 117 merchant marine, and four main ports allow for the shipping of goods, along with docking space for passenger cruise ships; they are located in Lisbon, Setubal, Sines and Leixoes.

Portugal has a modern and state of the art telecommunications system, and a strong Internet backbone which allows for high speed Internet access throughout the country.

Workforce

Portugal has a total labourforce of 5.58 million (2009 est), 60% of which work in the service sector. Roughly 96% of the population are classed as official Portuguese nationals, the remaining ethnic groups mainly consist of Brazilians, Ukrainians and Angolans. The official language is Portuguese, with an estimated 32% of the population speaking English, 24% speaking French and 9% speaking Spanish as a second language. In secondary school the learning of a foreign language is heavily promoted from an early age.

Portugal has a strong education system, with a number of polytechnic, public, private and international higher education facilities located in the country. The largest institution is the University of Porto, which currently has over 27,000 students enrolled in its study programmes. It also has a strong research facility which is considered to be one of the best in the country. There are also several specialist higher education facilities, such as the ISCTE in Lisbon which attracts a large number of foreign students.

A total 4.4% of the total GDP is re-invested back into improving the current education system, which helps give the country a high literacy rate of 95%. Despite the unemployment rate increasing over the past couple of years it remains at 9.2% (2009), which is lower than that of the United States.

Business Costs

Costs for renting commercial office space are favourable throughout Portugal. Prices are highest in the capital city of Lisbon, where the average rental in the Lisbon Av de Liberdade district is $36.63 per month, which puts it on par with costs in Bucharest and Tel Aviv. The rental market is also relatively stable and has managed to withstand the global difficulties of 2009.

Personal tax rates work on a progressive scale ranging from 10.5% - 42% (2009), depending on the amount of income earned. Standard corporate tax rates are reasonable and on par with the European Union average - with a 25% flat rate, and a 1.5% municipal tax which brings the total rate up to 26.5%. Social security payments are required by both the employer and employee, each contributing 23.75% and 11% of the total salary respectively. The value added tax rate was reduced by 1% in 2008 to a 20% tax on most goods and services, with discounted rates of 12% and 5%. All exported goods are exempt from paying any VAT.

There are minimum wages in place in Portugal, which are available for all employees who are legally working within the country. The minimum wage rate stands at €475 per month, and the average national salary is €804.22 per month.
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