The Dutch-Portuguese Chamber of Commerce: Facilitating business for 35 years
CELEBRATING 35 YEARS
Celebrating its 35th anniversary this year, the Dutch-Portuguese Chamber of Commerce’s founding almost coincides with Portugal’s entry into the European Union in 1986. “Before this there had been trading relations and we’d been part of the European Free TradeAssociation (EFTA), but Portugal’s entry into the European Union space opened up access to markets and to Europe in a manner that we became an equal partner as a full member of the EU and all the opportunities that brought, while the other EU members now saw us as an integrated member state and partner,” says Nuno Pinto de Magalhães who previously served as the director of Communication and Institutional Relations of Central de Cervejas, which is part of the Heineken Group. For his renewed three-year mandate, his main concern is to reinforce the chamber’s open-door policy towards members. “We regularly canvass the members’ opinions so we can better meet their expectations and bring added value,” he adds. Within the board there is a core nucleus of five/six board members, and annually draws up the main strategy goals, adjusted according to circumstances, with this exact aim. Nuno Pinto de Magalhães, who is also president of the Luso Foundation and president of Advertising Self-Regulation (ARP), emphasises that the chamber plays an essential role in organising social events to facilitate networking – hosting lunches with guest speakers, holding think-tank sessions, as well as cooperating in joint events and online discussions with other European chambers such as the Belgian, British, German, French and Swiss. These involve a range of issues, from the imbalances in the labour market to company taxes and legislation changes, digitalisation and IT, as well as recruit ment problems in tourism for the hotel and restaurant sector, the latter of which he admits is a “problem that stretches across the board” in Portuguese and Dutch business sectors in Portugal.
In addition to the Heineken Group (Central de Cervejas e Bebidas), the Dutch-Portuguese Chamber of Commerce has some important Dutch companies as corporate members and sponsors, including Philips, Randstad, Unilever, Tias - School for Business and Society, Gerla, Signify, Neskrid, and more peculiar, perhaps, the borough of Estrela. The latter represents a unique collaboration between a public body and the network of companies between the two countries. Other examples of Dutch companies operating in Portugal include De Lage Landen, Florensis, FMJ projects, Frestia, Grandvision, IG&H platform services, ING Bank, KLM, Lankhorst, Leaseplan, and Vasco Consult. “Our members want a very planned programme of events, without this being rigid since we are increasingly working in an unpredictable environment. We need to have a ‘wide belt’ and be adaptable with our masterplan to meet members’ needs,” adds the president. During the late '90s, the Dutch Ministry of Foreign Affairs decided that Dutch bilateral chambers throughout the world would need to become financially self-sufficient, whereby they no longer would receive subsidies from the Dutch government. Hence, a new team was appointed in Lisbon. Marjon van Dinther (the current director) managed the restructuring of the chamber in Portugal. Despite the economic challenges in Portugal, the team maintained economic activity and enhanced the chamber’s results, both financially and in terms of relevance for society. “Today, we are in a healthy financial situation with good results, but our goal is not to make profits, but to cover costs and attract investments for our members,” stresses Nuno Pinto de Magalhães.
DOING BUSINESS IN PORTUGAL
Nuno Pinto de Magalhães says the main problem for Dutch companies in Portugal continues to be bureaucracy. “We’re still a very bureaucratic country. A lot of investors don’t know how to get authorisation for their activities, let alone the papers and online forms that they need to present. The process is cumbersome and time-consuming.” “The second issue is tax, legal and labour regime stability. Any investor needs to know what they can count on for business planning purposes. They don’t want to have to face chops and changes to taxes and tax scales almost on a yearly basis. Businesses think they are investing according to one framework, and then within a relatively short period of time it changes,” laments the president of the CCPH who did, however, admit that the government’s SIMPLEX regime introduced by the government (2005- 2011) had simplified the time it takes to set up a company, reducing the amount of paperwork involved.
In terms of the balance of trade between the two countries, the trade gap is in favour of the Netherlands. However, Portugal has grown its exports to the Netherlands, especially in services, although this upward trend was negatively affected by the pandemic. According to the Portuguese Institute of Statistics (INE), the Netherlands was the seventh client of Portuguese goods exports in 2020, with a share of 3.7% of the total, occupying fourth place in terms of imports (5.5%). The INE figures show that, throughout the period 2016-2020, there was an annual average growth in exports of 2.4% and 4.9% in imports. The balance of trade deficit for Portugal was €1.724Bn in 2020. In terms of exported products from Portugal to the Netherlands, stand-out products include Farming Products (11.3%), Plastics and Rubber (10.6%), Footwear (10.6%), Machines and Appliances (8.2%), and Vehicles and Other Transport Materials (7.6%). One of the most important vectors of services rendered by Portugal to the Netherlands is tourism, which was obviously very much impacted in 2020 due to the pandemic. The main imports from the Netherlands were: Machines and Appliances (28.2%), Chemical Products (19.6%), Farming Products (13.8%), Plastics and Rubber (7.1%) and Optical and Precision instruments (6.1%). IT-related services, transport services and intellectual property are the most important services the Netherlands renders to Portugal. According to the Dutch Central Statistics Bureau (CBS) for January to November 2021, the import value of total goods from Portugal stood at €2.187Bn. The total export value from the Netherlands to Portugal was €3.530Bn and the balance of trade was €1.343Bn in the Netherlands' favour. And in terms of trade in services, figures from the Dutch statistics bureau show that total imports of services from Portugal to the Netherlands stood at €807 million in 2015, €1050 million in 2019 (a record), but had fallen to €771 million in the pandemic year of 2020. Exports of services from the Netherlands to Portugal were €599 million in 2015, rising to €1.226Bn for 2019 (a record year), falling back to €861 million in the pandemic year of 2020.
TECHNOLOGY AND KNOW-HOW
The Netherlands is a country well known for its innovation in technology, and most of the large international companies operating in Portugal have sustainability as one of their strategic priorities, along with technological innovation. Examples include Central de Cervejas, KLM, Philips, Unilever, Randstad and many others, and this is a banner that these Dutch companies display worldwide, not just the large international ones, but also the SMEs that are ahead of Portuguese companies in this respect. However, one of the challenging issues that the chamber and its company members must tackle is how Dutch companies in Portugal can access European funding from Portugal 2030, and the Portugal Recovery and Resilience Programme (RRP). The President of the CCPH says there needs to be a level playing field when it comes to applying for funding. Nuno Pinto de Magalhães says he agrees with points raised by the President of the Portuguese Industrial Association (CIP), António Saraiva, on the RRP, its opportunities and application. Last year, CIP identified that one of the main failings in the €16Bn ‘bazooka’ funding allocation was the sheer lack of priority by the government in using a significant part of the funds on recapitalising companies in Portugal. That said, the beer sector as an integrated sector has presented projects for RRP funding through the Portuguese Industrial Federation (FIP) for logistics and city mobility, but these are projects of a sectorial nature and scale. However, the CCPH knows it has members who apply for and compete for EU funding.
NEW DUTCH COMPANIES IN PORTUGAL
Since the pandemic, several Dutch companies have entered the Portuguese market, especially in the IT/digital market. These companies can possibly contribute towards the Portuguese economy in terms of new technologies and growth of know-how. “What we can say in a generic way is that big investors, from wherever they come from, do face discouragement in terms of Portugal’s labour, tax and legal regulations, and the red tape, complexity and lack of celerity in these and other processes,” says Nuno Pinto de Magalhães. However, he also says that the profile of the Dutch investor has been changing over the years, being more related to IT and digitalisation. The green economy and everything related to it, including sustainability, clean energy, waste treatment systems and water recycling are also high on the agenda. Investors see good possibilities in Portugal when it comes to nearshoring, for example. By establishing a sister company in Portugal, Dutch IT companies can attract highly skilled software programmers that can work remotely on projects abroad. Among the SME companies that proved successful in Portugal, in part thanks to the chamber’s support in starting up in the country, is a Dutch recycled yarn firm that exports worldwide and has a small factory employing 80 people near Fátima. “It was set up by a Dutch entrepreneur who started her business from her garage and had mortgaged her house to raise the money, avoiding a bank loan this way. With the strikes at the docks in Porto and Lisbon at that time, her yarn was stuck in containers going nowhere and her situation was dire, and she was facing bankruptcy. We managed to sort out the situation through one of our members who operates out of the Port of Lisbon, unblock the cargo, and therefore save her company from going under.” Another situation involved a Dutch businessman with two factories in the north of Portugal that make orthopedic shoes and clogs like the ones used in hospitals. During the pandemic, he couldn’t travel frequently to Portugal. The entrepreneur discovered the CCPH, which helped him on various issues, including interpreting fiscal information, providing contacts to find a new factory building, as well as ensuring tax subsidies which helped the company throughout the pandemic.
Photo CCPH Board members: Nuno Pinto Magalhães (Chairman of the Central Cervejas Foundation - 1st row far left) and Director of the CCPH Chamber Marjon van Dinther (1st row 2nd left) with Luís Newton (Chairman of Estrela Borough) and Maarten Drenth, Area General Manager IHG Portugal), project manager Jearina Imanse, Liaison officers Thomas Hall de Beuvink, lawyer and expert in real estate valuation | project development and tourism; and David Carvalho Martins, lawyer Esra Sen, Deputy Head of the Dutch Embassy.
Text Chris Graeme