Navigating a New Market: Securing Strategic Status and Incentives for a German Industrial Giant in Portugal
Background
A leading German industrial manufacturer decided to establish a new, state-of-the-art production facility in Portugal. As a new entrant to the Portuguese market, it lacked the local regulatory knowledge, institutional networks, and specific expertise required to navigate the complex public incentive and fiscal benefits landscape. The senior management's primary concerns were: (i) identify the optimal grants and benefits scheme for their €50 million greenfield investment; (ii) efficiently managing the intricate application processes with multiple entities, while adhering to strict legal and financial compliance standards; (iii) minimising administrative delays and accelerating approvals to ensure the project remained on schedule and within budget.
Approach
Mercal acted as the client's integrated local partner. Our approach was methodical and integrated, encompassing 3 key phases:
1. Strategic Scoping and Stakeholder Liaison - We initiated and facilitated meetings with key institutions, including AICEP (the Portuguese Trade & Investment Agency), the Luso-German Chamber of Commerce and other governmental bodies, to present the project, align strategic objectives, and establish a direct and transparent communication channel from day one. We conducted a thorough analysis of all available incentive regimes, concluding that a dual-track application for both the Request for Recognition as a Project of Potential National Interest and the Productive Innovation Incentive System (Contractual Investment Regime) would yield the best outcome.
2. Integrated Project Management - We acted as the central hub that coordinated all external partners, including the client's legal counsel, engineering and construction firms, and financial auditors. We managed the flow of information and documentation, ensuring all parties were aligned and that technical reports, financial models, and legal opinions were prepared to the exact standards required by the evaluating authorities.
3. Application Development and Submission - We drafted the formal applications, ensuring a compelling investment narrative that highlighted the project's strategic alignment with national goals for innovation, job creation, and technological modernisation, and prepared the detailed economic and financial modelling to demonstrate the project's viability, which is critical for approval.
Outcome
The project is currently in the final stages of the application process. Based on our continuous management and positive, high-level feedback from AICEP (the entity responsible for the evaluation), we have a high degree of confidence in its imminent approval for both the PIN status and the financial incentives. This will secure a significant financial grant and, crucially, PIN's streamlined licensing "one-stop-shop", which will accelerate the project timeline.
Conclusions
This case demonstrates how specialised local expertise is critical for navigating foreign incentive regimes. Our integrated approach turned a complex challenge into a strategic advantage, securing both financial and non-financial benefits that ensured the project's timely and profitable launch.
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