“In Portugal, businesses are slightly growing,” says Pedro Simões, Managing Director of Acoq Consulting. “However citizens with fewer resources and competences find it hard at the moment.
“There is some speculation on investment in real estate, which in my opinion doesn´t help the market. Recently a huge number of law enquiries for wellknown citizens, including former Prime Minister José Sócrates and other high level directors from public institutions are damaging the demand from foreigners for the real estate market. The Tax Office in Portugal is being very active in inspecting businesses and is inputting more bureaucracy that increases the cost to fulfil tax obligations.”
Portugal’s recovery from recession comes with many challenges but ACOQ believe the key to continued prosperity in Portugal relies on the efficiency and reliance of its public institutions.
“The challenge facing the country is to look into the future of our public institutions and adjust what they are offering to us. Basically, our public institutions do not work well. When you need something it´s a nightmare so the challenge is to get a better service to companies and individuals, which is the result of paying taxes.”
ACOQ is a company with expertise in the areas of corporate and individual tax advising, including; non-habitual residence status; consultancy on investment (property, companies, financial products), management consultancy; general, analytical and budgeting accountancy; budget costs control; company evaluation and brokerage; price transfer file; business plans: set up, control and analysis of results and fiscal representation.
Key to the consultancy firm is its clients and the challenge of remaining competitive in its market. “For ACOQ, engagement with our clients and market is the only way to operate. Also, if we don´t constantly develop, we become part of history. We prefer to write our future every day.”
Despite the growth Portugal has recently been experiencing, all at ACOQ are optimistic yet cautious about the Portuguese economy and investment. “I think that real estate market is still a good option,” says Simões. “However, investors need to be more careful. Agriculture and tourism are always a good option to invest, especially because the Portuguese companies have competences and knowledge that are not easy to find.
“The challenge is first to increase liquidity on companies. We still have companies that have profitable businesses, but with less financing the outcome has fewer dimensions. It´s very difficult to grow companies to compete worldwide but some big companies in Portugal have also lost huge sums due to bad investments.”
One of the main problems facing Portugal is tax evasion. According to the Observatory for the Economy and Fraud Management, undeclared money circulating in Portugal equates to around 60% of the bailout given by the Troika and is also just over a quarter of the annual GDP in Portugal. The total of 46 billion euros said to be circulating in the parallel economy is also the highest figure since calculations began.
“The Portuguese government have increased tremendously the obligation to declare information,” says Simões. “The government started to oblige all business transactions to include an Invoice, and at the same time obliged the suppliers to provide invoice information every month.”
Instrumental to Portugal’s recovery was its growing export market, about which Simões commented: “In Portugal, there are some products that are traditionally exported, such shoes, wine, etc. The export of services has a long way to go, but I think that is suddenly starting.”
An important factor for foreign investment in Portugal is its geographical location. “The location of Portugal is very important when you want a good access point into Europe by sea. I think that, at the moment, everything changes fast. We will have elections in late 2015, and I don’t foresee any major developments before then.”