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Setting up a Company in Madeira

Madeira is an excellent choice for setting up international businesses. Located in the Atlantic Ocean, Madeira has a population of around 250,000 and is an Autonomous Region of Portugal with its own government. Madeira enjoys political and administrative autonomy, whilst being fully integrated into the Portuguese legal system and, as such, into the European Union.

Here, the attractive and thriving business environment is combined with a stable and safe social environment. Add to this the stunning scenery and mild climate, and it is no surprise that more and more investors are choosing to set up a company in Madeira. 

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Advantages of setting up a company in Madeira

As well as enjoying the advantages afforded to Portuguese companies, all companies in Madeira also benefit from a reduced tax rate of up to 5 per cent, provided they are licensed to operate within the Madeira International Business Centre (IBC).

  • Participation exemption applicable to dividends and capital gains
  • Nearly 80 double taxation agreements
  • Tax credit for double taxation
  • Patent Box scheme: 85% tax exemption on income from intangible assets
  • Full integration into the European market
  • Security, stability and a thriving business environment
Advantages of setting up a company in Madeira

Shareholders of companies in Madeira also enjoy a number of advantages:

  • Exemption from capital gains tax on the sale of Portuguese companies, provided the requirements for the participation exemption are met;
     
  • Tax exemption on the distribution of profits and dividends to corporate shareholders, provided the requirements for the participation exemption are met;
     
  • Residence permits for investment, entrepreneurship or skilled employment;
     
  • Exemption from withholding tax or withholding tax at reduced rates on the distribution of dividends to individual shareholders not resident in Portugal (for companies licensed to operate in the IBC);
     
  • Exemption from or reduced rates of personal income tax under the tax regime for non-habitual residents;
     
  • Possibility of permanent residence or citizenship after 5 years.

Companies licensed by the IBC benefit from a special tax rate of 5%. When setting up a company in Madeira that is not licensed by the IBC (and is therefore subject to Madeira’s general tax regime), you will also benefit from a reduced tax rate of 13.3%.

Why choose NEWCO?

Without local knowledge, it is difficult to anticipate the unknown. Working with an experienced local partner, such as NEWCO, is what distinguishes a well-executed company formation from one that will cause problems later on. 

It is by underestimating the complexity of this process that the most common mistakes arise: poorly chosen structures, ignored tax obligations, missed deadlines and avoidable fines. 

Setting up a Company in Madeira

What sets us apart

  1. We bring together legal, tax and accounting expertise under one roof, meaning you won’t have to coordinate multiple service providers or worry about gaps in service. Your company will be structured coherently from the outset, ensuring ongoing legal and tax compliance.
     
  2. Our team will guide you through every stage of the process, with solutions tailored to your needs. We have extensive experience in cross-border operations and working with international investors. We are well acquainted with the complexities that arise when different tax and legal systems intersect, and we know how to structure your presence in Madeira in an efficient and defensible manner.
     
  3. We communicate in English, Spanish or French, so that nothing is lost in translation.

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Business services in Madeira

We offer a personalised service. We analyse your situation and propose strategic solutions that enable you to optimise results and take full advantage of setting up a company in Madeira:

  • Selection of the type of company and advice on its structure (LDA, SA)
  • Incorporation and registration of the company (Tax Authority, RCBE, Social Security)
  • Licensing at the Madeira International Business Centre
  • Support with opening a business bank account
  • Management support (including director services)
  • Accounting and tax support (corporate tax, VAT, payroll)
  • Tax consultancy and ongoing advice
  • Support with property investment

Tailor-made solutions for international operations

We work with all types of entities, from foreign entrepreneurs setting up their first European entity, to international groups establishing a subsidiary in Portugal, and expanding SMEs that need a solid legal and tax structure from day one.

We also work with lawyers, tax advisers and other intermediaries who need a trusted local partner to assist clients investing in Portugal.

What happens after you contact NEWCO

Initial consultation – no obligation

Initial consultation – no obligation

We analyse your situation, the nature of your business and your objectives. Shortly afterwards, we send you a clear and detailed proposal for our services.

Onboarding (due diligence)

Onboarding (due diligence)

Once you have accepted the proposal, we carry out a due diligence process in accordance with AML/CFT legislation. This is a mandatory, straightforward step, which we handle ourselves.

Incorporation

Incorporation

We handle the entire incorporation process:

  • Approval of the company name and Certificate of Admissibility
  • Drafting and signing of the Articles of Association
  • Company registration
  • Declaration of Commencement of Business
  • Registration of the beneficial owner
  • Registration with Social Security
Your company is up and running

Your company is up and running

NEWCO remains by your side. We take care of your accounts, tax obligations and ongoing support. You’ll have direct contact with your dedicated chartered accountant and account manager. Whenever you need us, simply send an email.

What our customers say.

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Frequently Asked Questions

Please feel free to contact us directly with any specific questions you may have.

Setting up a company in Madeira involves several steps, including defining the corporate structure, choosing the business activity, preparing the documentation, registering the company, obtaining a tax identification number (NIPC), opening a bank account and complying with legal and tax obligations. Depending on the project, eligibility for the Madeira International Business Centre (IBC) may also be assessed.

The documents required may vary depending on the profile of the shareholders and the company’s structure. As a general rule, the following are required: identification documents for the shareholders and directors, proof of address, tax identification numbers, information on the company’s business activity, and additional documentation relating to the source of funds or shareholder structure, where applicable.

Yes. You do not have to be a resident of Portugal to set up a company in Madeira. Foreign investors and entrepreneurs may incorporate a company and operate from Madeira, provided they comply with the applicable legal and substance requirements.

In most cases, no. The process can be handled through local representatives and appropriate legal arrangements, reducing the need for in-person visits.

Yes. Currently, much of the process can be carried out remotely. Depending on the company’s structure and specific requirements, incorporation can be carried out via a power of attorney and with specialist local support, such as that provided by NEWCO.

Yes. As with any company, there are recurring costs associated with running the business, including accounting, tax obligations, administrative fees, regulatory compliance and other charges that may vary depending on the nature and size of the business. Companies licensed to operate within the Madeira International Business Centre are also subject to an additional fee relating to the renewal of their licence.

Madeira offers a highly competitive tax framework, particularly through the Madeira International Business Centre (IBC). Depending on eligibility and compliance with the applicable requirements, IBC companies can benefit from specific tax conditions under a framework that is recognised at European level.

The Madeira International Business Centre (IBC) is an economic and tax regime created with the aim of attracting international investment to the Autonomous Region of Madeira. This framework offers a range of benefits and incentives for eligible companies, including a reduced tax rate of 5 per cent. The IBC operates in accordance with rules approved and supervised by national and European authorities.

Setting up a company in Madeira means incorporating a company under the general Portuguese regime, albeit whilst benefiting from a more advantageous tax framework. A company operating under the IBC, on the other hand, can benefit from a specific framework with its own incentives, provided it meets the established criteria and requirements. Not all companies are automatically eligible for this scheme.

Yes. Madeira can be an attractive jurisdiction for holding company structures, depending on the company’s objectives, its international structure and the desired tax regime. The ideal solution will always depend on an analysis of your specific case.

Madeira combines legal stability, full integration into the European Union, a strategic location, an international business environment and access to competitive regimes for certain activities. The region has been establishing itself as an attractive option for both domestic and international companies.

Working with a local partner, such as NEWCO, allows you to streamline processes, reduce risks and ensure specialist support at every stage of the company’s incorporation and management. NEWCO has experience and knowledge of the local legal, tax and administrative framework, which helps to identify opportunities, avoid mistakes and ensure greater efficiency throughout the process. Contact us!

Learn more about:

Advantages of Setting Up a Company in Madeira

The International Business Centre of Madeira

Registration of Ships in Madeira