Registration of a company in Madeira (Sociedade de Desenvolvimento da Madeira)
Sociedade de Desenvolvimento da Madeira (Madeira’s International Business Center – MIDS) consists of:
- Free Trade Zone (FTZ) is a zone used mainly by manufacturing companies for free trade.
- International Services Center (ISC) – a center for the provision of services.
- Offshore Financial Center (OFC) is an offshore financial center for banks, trusts and other financial companies.
- Shipping Register – shipping register.
Organizational and legal forms
Portuguese legislation provides for the possibility of creating the following organizational and legal forms in Madeira:
- individual entrepreneur (sole proprietor);
- individual limited liability establishment;
- simple partnership (partnership company);
- limited partnership company;
- cooperative (cooperative);
- private limited company;
- public limited company (public limited company);
- branch (foreign branch).
The most popular form of doing business for foreign entrepreneurs is a private limited liability company – Private Limited Liability Company (Lda.).
Madeira tax system
On the territory of the Madeira MEZ, there is a special preferential taxation system for VAT (VAT) – 22%.
Income tax is fixed until 2027 at 5%, subject to a number of conditions.
Conditions for applying the 5% corporate tax rate:
For manufacturing companies registered in the FTZ – 5% (valid until 2027 inclusive, and until 2011 it was not charged at all), which invest at least EUR 75,000 in the business during the first two years. Investments can be in the form of buying real estate , technology, patents, copyrights, trademarks. There are certain limits on the taxable amounts that qualify for the reduced rate, depending on the number of jobs created. In case of exceeding the limits or non-compliance with the conditions, the tax rate will be 21%.
Companies in the FTZ that create more than 5 jobs during the first six months can expect a 5% tax rate without additional conditions.
No tax is paid on the transferred capital, when paying royalties, on capital gains.
80% discount on the payment of stamp duty, municipal taxes on the transfer of property rights, on real estate.
Exemption from tax on dividends paid to non-Portuguese founders.
Exemption from tax on interest under loan agreements with third parties, founders or non-residents, subject to a number of conditions.
76.2% reduction in income tax advance in a number of cases.
Possibility to use double taxation tax credit.
Use of all EU directives.
Dividends distributed to non-Portuguese foreign shareholders will not be taxed in Madeira.
Social contributions, including pension contributions, are paid by employees at a rate of 11% and by employers at a rate of 23.75% of employees’ wages.
Stamp duties are paid in relation to various transactions and documents. The rates depend on the operation.
Соглашения об избежании двойного налогообложения
Portugal has signed tax agreements with 94 countries: Austria, Algeria, Andorra, Barbados, Belgium, Bulgaria, Brazil, United Kingdom, Venezuela, Hungary, East Timor, Vietnam, Guinea-Bissau, Germany, Hong Kong, Greece, Georgia, Denmark, Israel, India , Indonesia, Ireland, Iceland, Spain, Italy, Cape Verde, Kazakhstan, Canada, Qatar, Cyprus, China, Colombia, Ivory Coast, Cuba, Kuwait, Latvia, Lithuania, Luxembourg, Macao (China), Malta, Morocco, Mexico, Mozambique, Moldova, Netherlands, Norway, UAE, Pakistan, Panama, Peru, Poland, Republic of Korea, Russian Federation, Romania, San Marino, Sao Tome and Principe, Saudi Arabia, Senegal, Singapore, Slovakia, Slovenia, USA, Tunisia, Turkey, Ukraine, Uruguay, Finland, France, Croatia, Montenegro, Czech Republic, Chile, Sweden, Switzerland, Estonia, Ethiopia, South Africa, Japan. 16 TIEAs: Anguilla, Andorra, Antigua and Barbuda, Belize, Bermuda, British Virgin Islands, Guernsey, Gibraltar, Jersey, Dominica, Cayman Islands, Liberia, Isle of Man, St. Kitts and Nevis, St. Lucia, Turks and Caicos.
A company registered in Portugal must prepare annual financial statements. Financial statements are submitted online by the accountant, until the end of June, in accordance with the Accounting Standards of Portugal. Includes balance sheet, income statement, income statement, etc., and is publicly available.