Ship Registration in Madeira: MAR as a Key Pillar of the IBC

The International Shipping Register of Madeira (“MAR”) is the area of the International Business Centre (“IBC”) that has seen the most significant growth in recent years.

Built on principles of stability, credibility and competitiveness, MAR has consistently reinforced the prestige of the Portuguese flag internationally, attracting operators and consolidating Portugal’s position in the maritime economy.

Its competitiveness also extends to the financing framework, a key element in maritime operations. In this regard, MAR offers a flexible and robust system for the formalisation of mortgages.

Let us now look at the key points of the regime and the advantages that MAR can offer.

Scope and registration framework

MAR allows the registration of a wide range of vessels, including cargo ships, passenger ships, barges, and fixed and floating platforms. Yachts are also eligible, but recreational vessels must have a minimum length of 7 metres, and commercial yachts must have a maximum capacity of 12 passengers and a length between 7 and 50 metres. Fishing vessels are excluded, as their framework is provided for in separate legislation.

Registration may be carried out by entities engaged in maritime transport or leisure activities, regardless of whether they are based in Madeira. Where they are not based in Madeira, a local representative with full powers must be appointed, including the receipt of notices.

Under this regime, two types of registration are available: permanent and temporary, ensuring a balance between operational efficiency and legal certainty.

Key advantages

MAR offers advantages across a wide range of areas of practical relevance, such as:

• A reliable and high-quality register, compliant with technical and safety standards and certified by internationally recognised organisations – it's not (and never was) a flag of convenience;
• The benefits of European status, including access to cabotage within the EU;
• A competitive mortgage regime, allowing for the choice of the applicable jurisdiction;
• Access to the advantageous tax regime of the Madeira Free Zone, provided that the shipowner is a company licensed to operate within the IBC;
• Application of international conventions to which Portugal is a signatory;
• Income tax exemption in respect of the earnings of crew members of vessels registered with MAR;
• Advantageous contribution regime:
  • Crew members and their respective employers are exempt from Social Security contributions in Portugal, provided they are covered by another social security system;
  • Portuguese nationals or resident crew members are subject to social security contributions with a reduced tax rate of 2.7% (2.0% paid by the employer, 0.7% paid by the employee); 
• Flexible crewing arrangements, as only 30% of the safe manning requirement must consist of nationals of European countries and/or countries where Portuguese is an official language. For vessels owned by Spanish owners, nationals of countries where Spanish is an official language are also eligible;
• No nationality requirements apply to shipowners;
• Highly competitive registration and maintenance fees, with reductions based on volume.

On a growth trajectory

Despite fierce competition, MAR continues to stand out at European and global level, with its fleet growing by over 55%.

According to the latest Review of Maritime Transport by the United Nations Conference on Trade and Development, MAR ranks:

• 11th place globally (up two places from 2024, when it ranked 13th) and 3rd in Europe in terms of deadweight tonnage, rising from 1.9 million tonnes to over 30 million tonnes over the last 10 years;
• 25th place globally and 6th place in Europe in relation to the number of registered vessels, with around 1,175 commercial and leisure vessels registered in 2024.

The Portuguese flag, driven by the progress made possible through MAR, has also secured its place on the White Lists of the Paris MoU and Tokyo MoU Port State Control regimes, which attest to the quality and credibility of the work carried out by maritime regulatory authorities at the international level.

Looking ahead

The continued commitment to the Madeira International Ship Register (MAR), together with the extension of the tax regime of the IBC, provides a stable and predictable framework for the sustained growth of the registry.

Looking ahead, it will be important to preserve the innovative and flexible approach that sets this regime apart, while reinforcing the foundations of a competitive and resilient model that responds to the needs of the international maritime sector and supports its continued success.

NEWCO is available to assist with a full understanding of the MAR regime and to provide expert advice throughout the entire process.