Foreign direct investment (FDI) into Portugal saw a sharp decline in 2025, with Bank of Portugal (BdP) data revealing the lowest annual figure recorded since the Covid-19 pandemic. Foreign investors transferred a total of 8.5 billion euros into the Portuguese economy over the year, representing a substantial 35 percent drop compared to the figures from 2024, according to multiple media reports.
Despite this overall contraction in inward investment, a closer examination of the data reveals a mixed picture. Investment channelled into the equity of Portuguese companies and other domestic entities actually increased by 9.3 percent year-on-year, rising to 11.9 billion euros from 10.9 billion euros. Crucially, property remained a major draw for foreign citizens, accounting for 3.9 billion euros of that total and seeing 10 percent growth in 2025.
Conversely, the data showed a major withdrawal of capital via debt instruments, which registered a negative investment of 3.4 billion euros. The BdP attributed this significant decline – following a 2.2 billion euro total investment in debt instruments in 2024 – partially to “restructuring operations within economic groups.”
European nations remained the most significant investors, contributing 5.8 billion euros, although this was a decrease from the 6.3 billion euros recorded in 2024.
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The largest European contributors were Luxembourg (1.1 billion euros), the United Kingdom (0.9 billion euros), and Germany (0.8 billion euros). It should be noted that Luxembourg frequently acts as an intermediary vehicle for final investors from other markets, including China, the United States, and France.
Spain was meanwhile identified as the country of residence for the ultimate holders with the largest direct investment positions in Portugal at the end of 2024, followed by Portugal itself (a phenomenon known as ’round-tripping’), France, the United Kingdom, and Luxembourg.
Outward direct investment (ODI) from Portugal also saw a reduction in 2025, with Portuguese investors putting 6.7 billion euros outside the country, down from 7.6 billion euros in the preceding year. This ODI was primarily directed at entities resident in European countries (5.8 billion euros), with the Netherlands (2.3 billion euros), Spain (1.7 billion euros), and France (0.6 billion euros) being the main destinations.
In stock terms, the FDI in stock was 213.7 billion euros at the end of 2024, equivalent to approximately 70 percent of Portuguese national GDP. The ODI in stock stood at 78.6 billion euros, representing 26 percent of national GDP. Regionally, Greater Lisbon maintained the highest FDI value at the end of 2025, recording 113.2 billion euros. The North (37.2 billion euros) and the Algarve (21.7 billion euros) followed, with these three regions collectively accounting for 80.5 percent of Portugal’s total FDI stock.
