French investment in Portugal reaches €18.8 billion

France has consolidated its position as Portugal’s second-largest foreign investor, with French investment now totalling €18.8 billion, supporting around 130,000 jobs, ECO News reports.

The figures come from the study ‘Towards a More Competitive Europe – The Contribution of the Franco-Portuguese Partnership’, which was presented at the 9th Franco-Portuguese Economic Conference held at the Calouste Gulbenkian Foundation.

The report paints a picture of an economic relationship that has continued to strengthen despite a period marked by geopolitical tensions, slowing growth in several European economies and wider international uncertainty.

France is currently Portugal’s third-largest export destination and third-largest supplier, while Portuguese companies are also increasing their presence in the French market, reflecting what the study describes as an “increasingly balanced and strategic partnership,” according to ECO News.

Trade relationship

France accounts for approximately 12 percent of Portuguese exports, making it one of the country’s most important trading partners. According to data from AICEP cited in the study, exports to France reached around 16.3 billion euros in 2024.

Industrial goods represented roughly 55 percent of those exports, with transport equipment, machinery and metal products among the main categories sold to the French market.

Several recent transactions illustrate the scale of French economic activity in Portugal. Among them is the acquisition of Novo Banco by French banking group BPCE in a deal valued at 6.7 billion euros, as well as the contract signed between Alstom and Infraestruturas de Portugal for the supply of 153 trains.

However, the study argues that French investment in Portugal is no longer defined solely by production capacity or lower operating costs. Multinational companies are increasingly assigning Portugal functions linked to engineering, technology, innovation and strategic management.

Examples of this shift

Natixis has established a large operations centre in Porto employing more than 3,000 professionals working in functions that were previously concentrated in Paris. Euronext has expanded its footprint in Lisbon and Porto, turning Portugal into its third-largest global platform.

Airbus estimates that by 2026, around a quarter of its worldwide production of aircraft sub-assemblies will be manufactured in Portugal.

Automotive, retail and food sectors

The automotive industry continues to play a central role in Franco-Portuguese economic relations.

French-owned operations include the Stellantis plant in Mangualde and Horse in Cacia, while suppliers such as Forvia, Sarreliber, STE Plastic and the GMD Group also maintain significant operations in Portugal.

French infrastructure giant Vinci holds concessions for ten Portuguese airports, while household names such as Decathlon, Auchan, Intermarché and Leroy Merlin have established a strong presence in the retail sector.

The agri-food industry has also attracted investment. Dairy company Lactalis has expanded its Portuguese operations and now employs approximately 800 people in the country. Meanwhile, Auchan opened its first food production unit worldwide in Venda do Pinheiro in 2025.

France is also a major destination for Portuguese automotive exports, receiving around 1.3 billion euros worth of vehicles and components in 2024, equivalent to about 19 percent of the sector’s overseas sales. At the Stellantis plant in Mangualde, approximately 95.5 percent of production is destined for export markets.

French companies choosing Portugal

According to the study, Portugal’s attractiveness to French investors rests on three main pillars: stability, talent and geographic positioning.

Institutional stability, European Union membership and an outward-looking economy are highlighted as factors that provide long-term predictability for investors.

The report also points to Portugal’s highly qualified workforce. Around 43 percent of Portuguese citizens aged between 25 and 34 have completed higher education, while the country ranks sixth globally in English proficiency. France occupies 49th position in the same ranking.

Portugal’s Atlantic location, links to Portuguese-speaking markets, logistics infrastructure and growing renewable energy capacity are also viewed as competitive advantages.

Renewable sources already account for more than 70 percent of Portugal’s electricity consumption, while the port of Sines is increasingly seen as a strategic asset in Europe’s energy transition.

Quality of life is another consideration influencing investment decisions. Portugal achieved a score of 7.3 in the European Commission’s life satisfaction index in 2024, outperforming France, Spain and Germany. More than 60,000 French citizens currently reside in Portugal.

Portuguese companies in France

Portuguese businesses have expanded their footprint in France in recent years, led by companies such as Tekever, which has doubled its investment in the country to €200 million.

EDP and Powerdot are also increasing their activities in the French market, with Powerdot announcing a €100 million investment plan aimed at expanding its electric vehicle charging network.

Renova recently invested around €12 million to expand its industrial facility in Saint-Yorre, while Corticeira Amorim continues to operate a major production site in Lavardac serving the wine and champagne industries.

In 2024, Portuguese direct investment in France reached approximately €3.2 billion, placing Portugal among the 25 largest foreign investors in the country.

The study suggests that the recently implemented Treaty of Friendship and Cooperation between Portugal and France, known as the Treaty of Porto, alongside new financing agreements between the Portuguese Development Bank and Bpifrance, could help accelerate cooperation in innovation, sustainability and industrial competitiveness.

Energy, industrial development and joint expansion into Portuguese-speaking markets are identified as priority areas for the next phase of Franco-Portuguese relations.