Portugal continues to stand out as one of Europe’s most compelling destinations for foreign direct investment (FDI), and no country illustrates this better than France. With a current FDI stock of €16.6 billion (as of Q1 2025), France ranks as the third-largest foreign investor in Portugal, accounting for 8.2% of total FDI. And if recent developments are any indication, such as the acquisition of Novobanco by the French banking group BPCE. France may soon reclaim the second spot, temporarily held by the UK.

The connection between the two countries runs deeper than numbers. Portugal has become home to an estimated 50,000 to 60,000 French nationals, many of whom have contributed to transforming Lisbon neighborhoods into vibrant French-speaking communities. This growing expatriate presence strengthens cultural ties and makes Portugal an increasingly attractive place for French businesses to establish operations.

French investment in Portugal is not a recent phenomenon. Today, there are approximately 1,200 subsidiaries of French companies operating in the country. Impressively, 38 of the 40 companies listed on France’s CAC 40 stock index have a footprint in Portugal. These companies collectively employ over 104,000 people, making France the largest foreign employer in Portugal, ahead of even Spain.

Key sectors leading this investment include automotive manufacturing, renewable energy, infrastructure, telecommunications, and financial services. Automotive giants like Faurecia, Stellantis, and Horse (Renault Group) have long-standing operations in Portugal. These companies are now investing heavily in the shift to sustainable mobility, producing electric vehicles and hybrid engines locally.

In the energy sector, French firms such as Engie, Neoen, Voltalia, and Akuo are helping drive Portugal’s green transition, particularly in solar power and offshore wind. Engie alone employs over 600 people in the country and entered a major joint venture in wind energy back in 2019.

Infrastructure and transport also see strong French participation. From Alstom’s involvement in rail projects to Vinci's leadership in airports and construction, French expertise continues to shape Portugal’s development. During his 2025 state visit, President Emmanuel Macron expressed clear interest in France playing a role in the privatization of TAP, Portugal’s national airline.

The tech and digital economy is another rising area of French investment. Altice owns major telecom provider Meo, while digital heavyweights like Lydia, Qonto, Blablacar, and Backmarket are establishing strong presences. The French Tech Lisbon hub, launched in 2017, reflects this new wave of entrepreneurial interest.

Finally, in financial services, French banks like BNP Paribas, Natixis, and Euronext have built tech and operations centers in Lisbon and Porto, employing thousands. The €6.4 billion acquisition of Novobanco by BPCE, the largest Eurozone banking deal in a decade, cements France’s deep-rooted confidence in Portugal’s economy.

In short, Portugal offers a rare blend of talent, location, political stability, and future-forward policy, making it not just interesting, but strategic, for foreign investors. And France is proving just how far that investment can go.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes