Madeira company registration


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Madeira is an Atlantic island, and an autonomous region of Portugal. Many international entrepreneurs considering register a company in Madeira opt to set up an entity in the International Business Centre of Madeira (IBC). Madeira company provides a tax-efficient solution for international investment or a holding company.

Compare different Madeira entities Private LLC Public LLC E-business company Shipping company Branch office
Also known as Sociedade por Quotas SA Lda Lda Filial
Best use of company? All products/ svcs To get pub. funding International business svcs Maritime transportation Specific projects
How soon to invoice Clients? 2 weeks 2 weeks 6 weeks 6 weeks 2 weeks
How soon can you hire staff? 2 weeks 2 weeks 4 weeks 4 weeks 2 weeks
How soon can you sign a lease agreement? 1 week 1 week 1 week 1 week 1 week
How long to supply corporate bank a/c? 4 weeks 4 weeks 4 weeks 4 weeks 4 weeks
How long to supply co. reg / tax numbers? 2 weeks 2 weeks 4 weeks 4 weeks 2 weeks
Corporate tax rate on annual net profits? 5% 5% 5% 5% 5%
Limited liability entity? Yes Yes Yes Yes No
Government grants available? Yes Yes Yes Yes Yes
Govt approval required for foreign owners? No No No No No
Res. director/partner/ legal rep. required? No No No No No
Minimum paid up share capital? €1 €50,000 €1 €1 None
Can bid for Government contracts? Yes Yes Yes Yes Yes
Corporate bank account location? Santander Millenium BCP Deutsche Bank Citibank BNP Paribas
Can secure trade finance? Yes Yes Yes Yes Yes
VAT payable on sales to local customers? 22% 22% 22% 22% 22%
Average total business set up costs? €14,750 €16,950 €14,950 €14,750 €15,300
Average total engagement period? 3 months 3 months 3 months 3 months 3 months

Madeira company registration summary

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  • Advantages of Madeira company registration

    Madeira business registration advantages and challenges

    1. Multi-national Clients use Madeira as a gateway to the European market because:
      • Madeira corporation tax is a mere 5% of annual net profits, if certain conditions are met, guaranteed until 2027;
      • Madeira is part of the Portuguese territory and has a Portuguese VAT number. Thus, a Madeira company has immediate access to the free circulation of goods and services within the EU market.
      • A Certificate of Residence is issued by the Portuguese Tax Authority. As a result, a Madeira LLC can access Portugal’s network of double taxation agreements and EU Council directives.
      • Madeira double tax treaties include i) all European Economic Area (EEA) countries ii) Brazil iii) Mozambique iv) Korea and v) Venezuela.
    2. A Madeira LLC is an excellent holding company because:
      • The parent subsidiary directive allows a Madeiran holding company to receive dividends exempt from withholding tax from subsidiaries domiciled in the European Union;
      • Income received from non-EU subsidiaries suffer a mere 5% corporation tax;
      • There is no Portuguese withholding tax on dividend payments to overseas shareholders;
      • There is no Portuguese withholding tax on payments to overseas shareholders relating to intellectual property, technical services, management fees or head office expenses;
      • There is no capital gains tax on the sale of shares in international subsidiaries;
      • Access to Portugal’s network of double taxation agreements.
    3. Madeira is an attractive jurisdiction in which to register ships because i) the vessel can fly the Portuguese flag ii) it is included in the EU registrar of vessels and iii) it has unrestricted access to EU waters and iv) all international conventions ratified by Portugal are fully applicable v) the income of a ships’ crew is completely exempt from tax and vi) access to Portugal’s network of double taxation agreements.
  • Disadvantages of Madeira company registration

    1. To benefit from low tax benefits, a Madeira LLC must meet the following criteria:
      • It must have local economic substance including i) at least one local employee and ii) a physical office address and iii) a minimum paid-up share capital of US$ 75,000;
      • Each company director must obtain a Portuguese personal income tax number.
      • All directors’ and shareholders’ information is available on an open online register (click link);
      • Annual audited financial statements are prepared in Portuguese and available for public viewing.
    2. Because multi-national companies were allowed to avoid local economic substance requirements, the European Commission is currently investigating Madeira for potential abuse of the corporate income tax reduction scheme. Consequently, there is a risk the 5% corporation tax benefit may disappear before 2027.
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    Contact us

    For additional information on our company registration services in Madeira, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
    client relationship officer - Chrissi
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