Madeira client case studies in 2023
European-owned Hong Kong online marketing firm relocates business to Madeira
- Our Client is an affiliate marketing and search engine optimisation (SEO) expert with over 20 years’ international experience.
- He runs his business through a Hong Kong company and hires freelancers all over the world to work on projects as they arise.
- He is an EU national often shuttles between Asia and Central America, where he maintains residency.
- Due to increased difficulty with international banking from Hong Kong, civil unrest in the country from mid-2019, and growing concerns over the country’s economic and political stability, our Client needed to relocate his business to a tax-efficient jurisdiction in Europe, and have access to e-banking, e-wallets and debit cards.
- Our CEO Americas & Africa Kunal recommended our Client set up a Madeira IBC offering a low-tax regime of 5% providing he could comply with hiring one employee in Madeira and either i) transferring another five international employees to this company’s payroll or ii) undertaking an investment of at least €75,000 in property.
- Our Client has no fixed employees, so was inclined to opt for the investment option and one local employee.
- To comply with Madeira IBC’s eligibility criteria, Kunal informed our Client that Healy Consultants Group could assist him recruit a part-time admin employee resident in Madeira, and source a commercial or residential investment property.
- Our Client had two requests before agreeing to proceed:
i) that the engagement be completed by the end of Q3 2020, so he could de-register his Hong Kong company in Q4;
ii) Healy Consultants Group provide a nominee shareholder so that the company had two shareholders at all times and the company name ended in ‘Lda’ instead of ‘Socieidad Unipessoal Lda’.
- To fast setup the company, Kunal offered for Healy Consultants Group’s Portugal attorneys to initially register the company name and then transfer majority of shares to our Client after the bank account was opened.
- Our Client agreed with this solution. Kunal emailed a detailed proposal and our Client settled the first instalment.
- Within one week, our Client shared the requested personal and corporate KYC documentation with Healy Consultants Group’s internal Legal and Compliance Department.
- Healy Consultants Group’s attorneys in Madeira applied to reserve our Client’s preferred company name. The same was approved within three business days.
- Thereafter, a company registration application was submitted to the Portuguese Company Registry and the Madeira International Business Centre (MIBC) for pre-approval. The usual processing period for this is two weeks.
- In the meantime, Kunal
i) liaised with a local real estate agent in Madeira and detailed our Client’s budget and specific requirements for the investment property to be sourced;
ii) e-mailed our Client a bilingual (Portuguese and English) Power of Attorney (PoA) for his signature in front a Notary Public and legalisation by the country’s Portuguese Embassy, and then courier return to Portugal to apply for a local personal tax number and initiate the company’s share transfer.
- Due to Covid-19 travel restrictions, our Client is temporarily staying in Asia, but because he is not legally a resident, the Portuguese Embassy would not attest his signature on the PoA.
- To avoid any delays, Kunal devised a solution and had our Client courier the PoA to his lawyer in Central America for legalisation by apostille and courier back to Portugal.
- Within the following week, the attested PoA was delivered to Healy Consultants Group’s Portuguese affiliate office.
- Within two weeks of submitting the application to MIBC, the company was legally registered. Healy Consultants Group’s local attorneys then initiated the sale of the majority of the new company’s shares to our Client.
- Within one week, MIBC issued the updated company records reflecting the change in ownership.
Corporate bank account opening
- Immediately, after MIBC approved our Client’s company, Healy Consultants Group’s local attorney scheduled a meeting with two top-tier Portuguese banks to open a euro and US$ corporate bank account.
- Unfortunately, the preferred bank had a backlog of pending corporate bank account opening applications and would only accept new customers in September 2020.
- Consequently, Healy Consultants Group proceeded with the back-up bank, which has its headquarter in Spain.
- Within one week, this bank issued account numbers and requested additional information from our Client to create an online banking profile, and issued personal login credentials.
- Our Client requested Healy Consultants Group to obtain a Portuguese SIM card and activate roaming so he could publish this number on the company website and access e-banking while outside Portugal.
- To conclude the engagement, before Q1 2021 Healy Consultants Group will appoint a local part-time employee in Madeira to assist our Client with basic administrative tasks. If required by our Client, Healy Consultants Group will render further professional accounting and tax filing support.
- In the meantime Kunal, together with our Madeira real estate agent, will continue to source and share details of properties for sale with our Client until he decides which is the most suitable investment according to his needs.