Madeira

Madeira is an autonomous Portuguese territory that includes the islands of Madeira, Porto Santo and Ilhas Desertas. Madeira is a member of the European Union and is free to trade with EU countries.

WE OFFER

Our capabilities

Company “VBC Capital” offers company registration services, assistance in opening bank accounts and obtaining a residence permit in Madeira. Our experts will provide consulting and legal support.

We will conduct a detailed analysis of your business and provide an optimal solution that will fully meet your expectations.

Madeira is an autonomous Portuguese territory that includes the islands of Madeira, Porto Santo and Ilhas Desertas. Madeira is a member of the European Union and is free to trade with EU countries.

A free economic development zone, Madeira International Business Center (IBC), has been established in Madeira. This is a FEZ with preferential tax conditions for enterprises established in it. Companies registered in Madeira are often used for trade transactions, international services, advice, as well as registration of patents and copyrights.

IMPORTANT! You can often find such a notion as “Madeira offshore”, which is wrong! Madeira is not considered a “tax haven” and is therefore not blacklisted by the European Union.

JURISDICTION

Key features of the region

LEGISLATION

Law and agreements

Legislation

Operation of companies in Madeira is regulated by:

  • Portuguese Companies Act
  • Portuguese Tax Benefits Statute.
Types of companies:

Registration of following types of enterprises is allowed:

  • Individual Limited Liability Company (Unipessoal LDA);
  • a closed joint stock company (LDA);
  • an open joint stock company (SA);
  • simple partnership;
  • limited partnership;
  • limited partnership with share capital.

The most popular types are:
Unipessoal LDA, LDA

Agreements on avoidance of double taxation:

Madeira Island has concluded tax agreements on avoidance of double taxation (DTA) with more than 70 countries, including Ukraine, Russia, Kazakhstan, Poland, Israel.

Below is the entire list: Algeria, Austria, Andorra, Bahrain, Belgium, Brazil, Bulgaria, Great Britain, Hungary, Venezuela, East Timor, Vietnam, Guinea-Bissau, Germany, Hong Kong, Greece, Georgia, Denmark, Israel, India, Indonesia, Ireland, Iceland, Spain, Italy, Cape Verde, Canada, Qatar, China, Cyprus, Colombia, North Korea, Ivory Coast, Cuba, Kuwait, Latvia, Lithuania, Luxembourg, Macau, Qatar, China, Cyprus, Colombia, North Korea, Ivory Coast, Cuba, Kuwait, Latvia, Lithuania, Luxembourg, Macau, Malta, Mexico, Morocco, Mozambique, Moldova, Netherlands, Norway, United Arab Emirates, Pakistan, Panama, Peru, Poland, Romania, Russia, San Marino, Saudi Arabia, Senegal, Singapore, Slovakia, Slovenia, USA, Tunisia, Turkey, Ukraine, Uruguay, Finland, France, Croatia, Czech Republic, Chile, Switzerland, Sweden, Estonia, Ethiopia, South Africa, Japan.

Tax information exchange agreements

(TEIA) are signed with the following countries:

Andorra, Anguilla, Antigua and Barbuda, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Gibraltar, Guernsey, Isle of Man, Jersey, Liberia, Saint Kitts and Nevis, Saint Lucia, Turks and Caicos Islands

CHARACTERISTICS OF THE REGION

Benefits of doing business in Madeira

  • Companies registered in Madeira fall under Portuguese jurisdiction. The granted VAT number gives direct access to the EU market, as Portugal is a part of the European Union.
  • Companies registered in Madeira have low operating costs compared to other countries in the European Union.
  • Taxation at preferential rates for enterprises established in the Free Economic Zone (FEZ) — the International Business Center of Madeira.
  • No dividend tax for non-residents of Portugal.

TAX LEGISLATION

Taxes

  • Reduced income tax rate (5%). By comparison, ordinary companies pay taxes in Madeira at a 21% rate
  • Withholding tax exemption
  • Exemption from capital gains tax earned through the sale of a share in a company
  • Capital gains earned by non-residents of Portugal from the sale of shares in a Madeira company are not taxed if the company’s main assets do not include real estate in Portugal. This benefit does not apply to shareholders who are residents of tax havens. Madeira’s capital gains from the sale of subsidiaries and associates are exempt from tax under the terms of the “Participation Exemption” regime
Income Tax

The current tax exemption regime provides for the possibility of new organizations joining the Madeira International Business Center (MBC) by the end of 2020 (with annual renewal), guaranteeing a significantly reduced corporate tax rate (5%) on taxable profits by the end of 2027 compared to the tax rate in mainland Portugal.

The reduced 5% tax rate applies only to certain size of annual taxable profits, which depend on the number of jobs created by the company in Madeira:

The part of the income that exceeds this limit is taxed at the rate of 21%

Number of employeesNumber of employees
1 -22 730 000
3 -53 550 000
6 -3021 870 000
31 – 5054 680 000
100 и более295 500 000
Capital gains tax

Capital gains earned by non-residents of Portugal from the sale of a stake in a company in Madeira are exempt from tax if the company’s main assets do not include real estate in Portugal.

This benefit does not apply to shareholders living in tax havens (countries, territories and regions with favorable tax systems):

US Virgin Islands, Pacific Islands American, Samoa, Ceshm, Palau, Anguilla, Cocos (Keeling) Islands, Panama, Costa Rica, Puerto Rico, Antigua and Barbuda, Kuwait, Saint Vincent and the Grenadines, Brunei, Montserrat, Cayman Islands, Channel Islands, Norfolk Island, Pitcairn Islands, Honduras, Jamaica, Kingdom of Tonga, United Arab Emirates Emirates, Tristan da Cunha (Islands), Republic of Kiribati, Aruba, Labuan, Samoa, Bahamas, San Marino, Barbados, Lebanon, Swaziland, Bahrain, Liechtenstein, Gibraltar, Saint Kitts and Nevis, Vanuatu, Nauru, Saint Lucia, Guyana, Netherlands Antilles, Solomon Islands, Christmas Island, Cook Islands, Djibouti, Hong Kong, Jordan, Trinidad and Tobago, Tuvalu, Svalbard, Belize, Mauritius, Northern Mariana Islands, Bermuda, Maldives, Seychelles, Bolivia, Marshall Islands, Saint Pierre and Mikel British Virgin Islands, Monaco, Gambia, Niue, Turks and Caicos Islands, Tokelau, Dominica, Falkland Islands, Fiji, French Polynesia, Grenada, Guam, Isle of Man, island of St. Helena, Oman, Uruguay, Yemen

RESIDENCE PERMIT

Residence permit

Our company provides advice and assists in obtaining a residence permit.

Madeira has a mechanism for obtaining a residence permit for investment activities. It has been in force since October 8, 2012 and allows citizens from third countries to obtain a temporary residence permit in exchange for investment activities with exemption from a residence visa and entry into the country.

This program (ARI) is not for Portuguese citizens, citizens of the European Union (EU) and European Economic Area (EEA).

ARI – Residence permit for investment activity

Opportunities for a residence permit holder for investment activities

The holder of a residence permit for investment activities has the following opportunities:

  1. To enter Portugal without a residence visa;
  2. Reside and work in Portugal while staying in Portugal for at least 7 days during the first year and at least 14 days in subsequent years;
  3. Travel around the Schengen area without a visa;
  4. Take advantage of the right to family reunification;
  5. Apply for a permanent residence permit under the above conditions;
  6. Apply for Portuguese citizenship through naturalization.

REGISTRATION

Registration of a business and opening of accounts

We assist our clients in preparation of documents for company registration.
  • We support the process from document preparation to full registration of the company and commencement of business
  • We provide full legal supportку
  • We comply with all legal regulations

Company registration services

  • Registration of a company/representative office
  • Registration of a legal address
  • Obtaining a VAT number for the company
  • Using a real office
  • Obtaining a taxpayer number for an individual
  • Registration in the beneficiary database

Company registration2 – 3 weeks
A full set of notarized and apostilled registration documents with registry marks translated into English1 week
Legal address Depends on
form of activity
Obtaining a VAT number for a company2 – 3 weeks
Account Openingup to two months
Obtaining a tax payer number for an individualup to one week

BANK ACCOUNT

Account Opening

Our company will help you to open a bank account, both in person and remotely by proxy.
  • We provide legal support services
  • We provide banking support services
  • Interpreter services
  • Representation of client’s interests in government agencies
  • Preparation of a full set of notarized and apostilled registration documents with register marks.

BOOKKEEPING

Accounting services

After opening a company, we take responsibility for the accuracy, correctness and timely submission of your company’s accounting report. The accumulated experience allows our specialists to provide high-quality accounting services, records management and advice on legislation and taxation issues.

Our main task is to maintain correct accounting in accordance with regulations and international accounting standards.

Accounting support

  • accounting services
  • audit
  • consultations
  • tax planning
  • invoicing
  • assistance in paying tax payments

Virtual and real office services

  • legal address
  • office rental
  • organization of workplace
  • organization and use of communication facilities

Secretarial services

  • sending faxes, emails
  • answering phone calls
  • courier services
  • communication with counterparties

To start cooperation

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