Portugal ups its effort to lure fintechs from London

Portugal ups its effort to lure fintechs from London

Photo by Turismo de Portugal

LONDON, May 14 (Financial News) – In the queue of countries vying to lure UK fintech companies away from London and the long shadow of Brexit, Portugal is among the most pushy.

“How to attract global brands into your playground – it’s a very important issue for us,” said Rui Boavista Marques, director of the Portuguese trade and investment office, in an interview at the country’s embassy in Belgravia.

In 2018, the UK was the top foreign investor in Portugal for the first time this century, with fintech companies contributing significantly.

Ebury, a currency solutions business; Onfido, the fraud detection start-up; and digital banks Revolut and Monese have all set up shop in Portugal. Their activities are not confined to Lisbon – Revolut has based its Portuguese operations in Porto.

“We want more UK-based operations to look at Portugal,” said Marques. “We think fintech is a clear sector where we still can get more leads of investment – and we are conducting a special campaign only for that.”

Besides the lifestyle benefits (see, in particular, pastel de nata), the incentives on offer to fintechs include a labour force rich with engineering talent at what Marques describes as “competitive prices”; a 20% flat tax for expatriates; Europe’s biggest tech event in the form of Web Summit, which 80,000 people attended last year; and a €200m co-investment fund (cleverly named 200m) that supports venture investments in start-ups with “some development in Portugal”.

Amsterdam, Berlin and Paris are also busily touting their own attractiveness to UK fintechs. French President Emmanuel Macron’s plans have an exclamation mark in the form of Station F, an enormous former train depot-turned-startup incubator. Portugal’s equivalent is Hub Criativo Beato, an old military facility in Lisbon.

Brexit, of course, provides the impetus for these campaigns. But the window it opens will only stay open so long, and this has led to the rather unusual phenomenon of a number of European countries very publicly declaring their intentions to entice start-ups away from London.

Marques himself acknowledges the scramble for fintechs. “We are aware that there is a competition or race out there, and we are better and better qualified for it,” he said.

Of course, we shouldn’t write off the UK just yet.

Catherine McGuinness, who chairs the policy and resources committee of the City of London Corporation, recently told Financial News that Brexit forces the government to identify strengths and “work to maintain them”.

She is not, however, overly concerned by the threat of European suitors.

“I have heard anecdotally of one or two [fintech companies relocating to mainland Europe], but I don’t get the impression that there is great traction.”