Living in Madeira

Living in Madeira is an increasingly popular decision for expats from all over the world. 

The fantastic climate, superior quality of life, and safety are some of the factors that make the archipelago of Madeira a destination of choice for remote workers, families, retirees, and entrepreneurs.

Here are some facts about this Portuguese region and the reasons why many people choose to live in Madeira.

When moving to Madeira, you can count on a local partner like NEWCO to ensure that all the necessary steps and formalities are properly completed, from obtaining a residence visa, tax number (NIF), and opening a bank account, to support moving and buying accommodation.

All about Living in Madeira

The archipelago of Madeira belongs to Portugal and is located in the Atlantic Ocean, 978 km southwest of Lisbon.

Volcanic in origin, it is made up of the following islands:

  • Madeira Island (736 km2)
  • Porto Santo Island (43 km2) 
  • Desertas Islands (14 km2)
  • Selvagens Islands (4 km2)

Only two of the islands - Madeira and Porto Santo - are inhabited; the Desertas and Selvagens islands are designated as nature reserves.

Madeira is home to around 250,000 people and has been an Autonomous Region of Portugal since 1976. It has political and administrative autonomy and its own governing bodies: the Regional Assembly and the Regional Government. 

What's the weather like in Madeira?

In Madeira, there are no significant variations in temperature throughout the year, and the climate remains mild with average temperatures of around 22°C (maximum) and 16°C (minimum). 

Due to the influence of the warm Gulf Stream, the temperature of the sea water is around 22°C in summer and gradually cools down to 17°C at the end of winter.

What is Madeira's economy like?

Madeira has a solid and stable economy, supported by international services, tourism, and exports. The region exports a number of unique and high-quality products, such as Madeira bananas, Madeira wine, and Madeira embroidery.

If you choose to live in Madeira, you should know that there are several benefits to setting up a business on the island, including one of the lowest corporate tax rates (IRC) in the European Union: 14.7%. 

But that’s not all: the International Business Centre of Madeira offers very advantageous conditions for international companies that meet certain requirements. Some of these advantages are:

  • Corporate tax rate (IRC): 5%;
  • Exemptions from withholding tax on the distribution of dividends to shareholders not resident in Portugal;
  • Exemptions and reductions in other taxes.

Discover all the advantages of setting up a company in Madeira.

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Why live in Madeira?

In Madeira, you'll find the best of both worlds. On the one hand, the calm and intimacy of a small region; and, on the other, the cosmopolitan buzz of a big city.

When you choose to live in Madeira, you will find:

Nature and quality of life

Madeira offers a high standard of living. Living in Madeira means a calmer pace of life, allowing for a healthy balance between work and your social life.
You will have ample opportunities to relax with family and friends and to enjoy outdoor activities such as nature walks and water sports. 
In addition, Madeira's cultural heritage offers rich learning experiences, with festivals, museums, and historical sites to discover as a family.

Stability and safety

Portugal is one of the oldest countries in the world. Madeira is one of the safest regions in Portugal, with low crime rates.
That's why living in Madeira means living in a region with good infrastructure and free public education and healthcare systems for residents. There are also good private schools that teach in English and a private healthcare sector offering a wide range of choices.

Tax benefits

Since it is part of Portugal, Madeira offers benefits to those who wish to return to the country after five years away: the “Programa Regressar” or “Return Programme”.
What's more, there are programmes such as the tax incentive for scientific research and innovation (IFICI) - better known as "RNH 2.0" - which applies a flat-rate tax of 20% to certain employment income and tax exemption on some income obtained abroad.
The future special tax regime for non-habitual residents in the Portuguese Autonomous Regions will offer even more benefits for those who choose to live in Madeira.
In addition to these, there are also benefits in the taxation of crypto assets, the creation of start-ups and the taxation of stock options.

What are the tax benefits in Madeira?

Contact us to find out more about tax benefits in Madeira

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Moving to Madeira

If you've already made the decision to live in Madeira, you should now be considering your next move.

This is where the help of a local partner like NEWCO can be decisive: your process of moving to Madeira comprises several crucial steps which, with our experience, can be easily overcome.


Find out how to move to Portugal, step by step

Living in Madeira: Residence visas

To live in Madeira, you may need to obtain a residence visa in your country of origin:

  • Citizens of European Union (EU) countries and equivalent do not need to obtain a residence visa to live in Madeira, as they have the right to free movement;
  • Third-country nationals, however, do need to obtain a residence visa to live in Madeira.

There are various types of residence visas that allow you to obtain a residence permit to live in Madeira. Examples include the D7 visa (for passive income), the D8 visa (remote work), the D2 visa (entrepreneurship) and the Golden Visa (investment).

Learn more about residence visas in Portugal

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Where to stay when you opt to live in Madeira

Despite its small size, this archipelago boasts a great diversity of climates and natural landscapes that contribute to the decision to live in Madeira.

The island of Madeira has very rugged terrain and diverse microclimates due to its relief and exposure to the prevailing winds, but also thanks to its highest points: Pico Ruivo (1,862m) and Pico do Areeiro (1,818m).

The north of Madeira is dominated by the Laurissilva Forest. The towns and cities in the northern municipalities (Porto Moniz, São Vicente, and Santana) are smaller, quieter and more rural in nature.

Farther south, the climate is drier and sunnier, with larger, more dynamic cities. Around 75% of the population who live in Madeira choose the south coast, especially between the cities of Funchal, Câmara de Lobos, Santa Cruz and Machico.

This is where most of the economic activity takes place and where most of the hotels are located.

Living in Funchal

Living in Funchal

Funchal is Madeira's capital and largest city. Around 40% of Madeira's population is concentrated in Funchal. This city is the economic, financial, and cultural centre of the archipelago.
Funchal is also home to the majority of companies, government bodies, hospitals, the University of Madeira and various cultural organisations.

Living in Porto Santo

The island of Porto Santo is the complete opposite of the island of Madeira in terms of geomorphological constitution. When you choose to live in Madeira, but opt for the island of Porto Santo, you'll find a very flat island and a fine golden sandy beach that stretches for nine kilometres, making it a very popular destination in the summer for tourism and water sports.

Living in Porto Santo

Cost of Living in Madeira

Living in Madeira generally means enjoying a lower cost of living than in the rest of Europe.

If you choose to live in Madeira, you can start looking forward to lowering prices for food, transport, restaurants, fuel and entertainment, especially compared to the European average.

However, as Madeira does not currently have regular sea transport to any European destination, it is always necessary to budget for air transport, depending on your travel needs.

Fortunately, several airlines offer regular and, in some cases, direct flights to and from various Portuguese and international cities.

The cost of accommodation for those living in Madeira has risen in recent years, in line with the global trend and increased demand. However, it is possible to find good deals with the support of our team of Buyers' Agents.

Get your NEWCO guide

Our Guide Living in Madeira explains why this region offers an extraordinary quality of life and provides a step-by-step guide to your move.

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