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Company registration in Madeira

Photo 1 - Company registration in Madeira

About Madeira

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

 

Madeira also has a free economic zone - Madeira International Business Center (IBC). This is a free economic zone (FEZ) with preferential tax conditions for enterprises established there.

 

Country is often used for trade, international services, consultations and royalties, as well as a platform for the African, Asian and South American continents.

REGISTRATION OF COMPANIES IN MADEIRA - BENEFITS:

  • No tax on dividends for non-residents of Portugal
  • Madeira companies are automatically assigned a VAT number
  • Taxation at preferential rates for enterprises created in the FEZ - Madeira International Business Center
  • Jurisdiction is part of the European Union, which provides advantages of the benefits specified in the EU Directives
  • Madeira firms are used for trade operations, international services, consultations, etc
  • Madeira is not a classic offshore, it is a kind of preferential zone in Portugal
LEGISLATION

Madeira companies are regulated by:

  • Portuguese Companies Act;
  • Tax incentives statute.
TYPES OF COMPANIES
  • Registration of the company is allowed in the form of:
  • Single-member Company (Unipessoal LDA);
  • Private Limited Company (LDA);
  • Public Limited Company by Shares (SA);
  • simple partnership;
  • limited partnership;
  • limited partnership with share capital.

The first two types of companies are most popular.

Photo 1 - Company registration in Madeira

OPENING A COMPANY IN MADEIRA: REQUIREMENTS

SINGLE-MEMBER COMPANY (UNIPESSOAL LDA):
  • Opening authorized capital - 2000 EUR, must be paid before the end of the year in which the company was incorporated.
  • Shares - are not issued, the authorized capital is divided into share (quotas) of participants.
  • Director - at least one, individual or legal entity, without restrictions on resident status.
  • Shareholder (participant, member) - one individual, no matter what residency. It is permitted that the shareholder and the director could be one person.
  • Secretary - not required, but the company needs a registration agent in Madeira.
  • Publicly available information – related to the director and the shareholder (the nominee service is allowed).
  • Information on the beneficiaries is not freely available; it can be obtained only by certain competent authorities upon request.
  • A company in Madeira is forced to maintain and file a financial statements each year.
  • The company is obliged to pay an activity license annually.
  • The company shall obtain VAT number upon incorporation.
  • The registered office in Madeira is required.
PRIVATE LIMITED COMPANY (LDA):
  • Opening share capital - 5000 EUR, must be paid before the end of the year in which the company was incorporated.
  • Shares - registered.
  • Director - at least one individual, regardless of the residency.
  • Shareholder (participant) - from 2 individuals or legal entities, without requirements for resident status. It is permitted if the shareholder and director are the same person.
  • Secretary - not required, but the company needs a registered agent in Madeira.
  • Publicly available information – related to the director and the shareholder (the nominee services is allowed).
  • Beneficiary information is not freely available and could only be obtained by certain competent authorities upon request.
  • The company is forced to maintain and file an annual financial statements, and audited financial statements under certain conditions.
  • Audit reports are submitted if the company exceeds two of the three limits for 2 consecutive years: total balance – 1 500 000 EUR; general level of net sales and other income – 3 000 000 EUR; number of employees - 50.
  • Company must pay an activity license every year.
  • When incorporating a company, you need to get a VAT number.
  • Registered office in Madeira is required.
PUBLIC LIMITED COMPANY BY SHARES (SA):
  • Opening share capital - 50 000 EUR (30% must be paid before submitting documents for incorporation).
  • Shares - registered.
  • Director - management is carried out by the Board of Directors (with a statutory fund of up to EUR 200 000 - this is at least one individual, without restrictions on residency).
  • Shareholder (participant) - from 5 individuals or legal entities, regardless of residency. It is permitted that the shareholder and director are the same person.
  • The company must have either a Supervisory Board (at least 3 permanent members) or a sole observer.
  • Secretary - not required, but the company needs a registered agent in Madeira.
  • Publicly available information - about the director and shareholder. It is possible to use a nominal service.
  • No information on the beneficiaries are publicly available. It could be obtained by certain competent authorities upon request.
  • The company is required to maintain and file annual financial and audit reports. Audit reports are prepared if the company exceeds two of the three limits for 2 consecutive years: total balance – 1 500 000 EUR; general level of net sales and other income – 3 000 000 EUR; number of employees - 50.
  • The company must pay an activity license every year.
  • VAT number shall be obtained upon registration
  • Registered office in Madeira is required.
TAXATION

Income tax - 5% until 2027.

Firms opened in Madeira have the right to apply for a reduced tax rate (5%), subject to the following conditions:

  • creation of one post (work on a reduced schedule is allowed) and
  • investments in the amount of from 75 000 euros for the purchase of fixed assets, tangible or intangible assets in the first 2 years of work (also a share of capital and financial banking investments - it is allowed that investments be made in any part of the world).

The tax benefit, in the form of an income tax rate of 5%, is limited, depending on the number of jobs (or directors paid), by the following limits:

 

Taxable amount

Minimum investment required

(provided for the first two

years of work)

Number of workplaces

2 730 000 EUR

75 000 EUR

from 1 to 2

3 550 000 EUR

75 000 EUR

from 3 tо 5

21 870 000 EUR

-

from 6 tо 30

35 540 000 EUR

-

from 31 tо 50

54 680 000 EUR

-

from 51 tо 100

205 500 000 EUR

-

> 100

 

Additionally, companies are subject to one of the following maximum annual tax credit limits:

- 20,1% of annual gross value added or

- 30,1% of the annual costs incurred for organizing jobs or

- 15,1% of the annual turnover.

If the limits are exceeded, as well as if the company operates in Madeira or Portugal, income tax will be charged at a rate of 21%.

Tax on dividends - 0% (if dividends are paid to an individual who is a non-resident of Portugal and if the person is not registered in jurisdictions related to the Portuguese black list).

VAT - 22%.

Municipal tax on real estate - 3% of the cost of the real estate.

A company incorporated in Madeira must obtain a license and start operating no later than 6 months from the date of issue of the license, in the case of international activities, or no later than 1 year in the case of industrial or ship-related activities.

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CURRENCY CONTROL

Is absent.

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DOUBLE TAX TREATIES

Portugal and Madeira have concluded more than 70 agreements, with Ukraine as well.

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If you would like to open a company  or register an “offshore Madeira”, please contact our lawyers for advice:

+38 (098) 737-88-88

We will help you register company in Madeira or in any other jurisdiction of your choice.

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