Advantages of Setting Up a Company in Madeira

As an integral part of Portugal and the European Union, the Autonomous Region of Madeira offers several advantages for setting up companies. Companies incorporated in Madeira are Portuguese companies for all intents and purposes.

When you set up a company in Madeira you benefit from one of the lowest tax rates in Europe – 14.7%. There are also other advantages:

  • Participation exemption for dividends and capital gains;
  • Close to 80 conventions to avoid double taxation;
  • Double taxation tax credit;
  • Patent Box Regime: 85% tax exemption on income from intangible assets.

Shareholders of companies in Madeira also enjoy several advantages:

  • Exemption from capital gains on the sale of Portuguese companies, if the requirements of the participation exemption are met;
  • Tax exemption on the distribution of profits and dividends to corporate shareholders, if the participation exemption requirements 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 who are not residents of Portugal (only for companies of the International Business Centre of Madeira (IBCM);
  • Exemption or reduced rates of personal income tax, under the tax regime for non-permanent residents;
  • Portugal has the 5th best passport in the world.

Advantageous Tax Regime

Companies in Madeira benefit from a reduced rate of Corporate Income Tax – 14.7% or 5% if licensed to operate in the International Business Centre of Madeira.

When you set up a company in Madeira you also have full access to the Portuguese participation exemption regime, to the network of conventions signed by Portugal to eliminate double taxation (more than 80) and unilateral double taxation tax credit.

The International Business Centre of Madeira

The International Business Centre of Madeira offers a tax rate of only 5%.

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Full Integration in the European Union

All the principles of the European Union Treaty are applicable to companies in Madeira and their investors, ensuring a modern, well-regulated legal regime that protects the interests of investors.

Security and Excellent Quality of Life

Portugal is the third safest country in the world. Madeira is the safest region in Portugal.
With an impressive variety of unique natural landscapes, Madeira allows you to enjoy an active and healthy life between mountain hikes and seaside strolls. More than 8,000 expats from all over the world live in Madeira, bringing with them diversity and cultural richness.

Government Support to Companies

The Regional Government of Madeira supports the setting up of companies in Madeira, and offers recruitment incentives, through various support mechanisms.

Central Geographic Location

Madeira is centrally located, at the intersection between the Americas, Europe, and Africa. It is only 90 minutes from Lisbon and has regular flights to many European, American, and African cities. It is a stopping point for various cruise ships and cargo ships, ensuring a constant flow of people and goods.

Excellent Network of Infrastructure and Roads

Madeira has an excellent infrastructure network, the result of a continued commitment to the creation and maintenance of good conditions for housing and support for companies. Internet access is fast, and Madeira is one of the Portuguese regions with the fastest internet access speeds.

Qualified and Productive Workforce

The Madeiran workforce is productive and skilled. Most locals speak English well. There are several co-working spaces throughout the island and incentives for hiring skilled professionals.

Good Education and Health Care

Access to Education and Health Care is free for all residents. The Autonomous Region of Madeira has 3 higher education establishments, offering education in areas such as management, engineering, medicine, nursing, art, research, and computer sciences. There are international schools that teach in English.

Investment Opportunities in Madeira

Madeira offers several investment opportunities.

International Services

Big data, SaaS, e-commerce, IT services, intellectual property and trading companies find Madeira, and the International Business Centre of Madeira in particular, an attractive tax regime.

Industrial Activities

The Industrial Free Trade Zone of the International Business Centre of Madeira is home to industrial activities which, in addition to all the other advantages offered by the IBCM, can also benefit from a 50% income tax deduction.

Holding Companies

Holding companies are important instruments for the management of international investments and can benefit from mechanisms for the elimination of international double taxation and the extremely advantageous tax framework of the International Business Centre of Madeira.

Real Estate

Madeira is one of the Portuguese regions with the highest growth in the real estate sector, not only in the residential sector, but also in the tourism sector. Operating properties under the local accommodation scheme is a popular option, as well as rural and sustainable tourism establishments.

Intellectual Property

The creation, protection, and management of intangible assets, such as intellectual property, are issues that are of great concern to companies in this day and age. Thanks to the tax benefits available at the International Business Centre, Madeira is an excellent option for the management of various types of intellectual property, such as:

Organic Farming and Wine Production

The number of organic farmers has grown significantly in recent years, with more and more land being set aside for organic farming.
There are already several Madeiran start-ups developing new organic and sustainable production techniques.
At the same time, the production and export of Madeira Wine and still wine have also been growing. 

Renewable Energy

Both Madeira and Porto Santo offer ideal conditions for the implementation of solar, wind and wave energy projects. The Region aims to get 50% of its energy from renewable sources by 2025.

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