Madeira company formation recently emerged as a popular choice for businesspeople. Madeira, as part of the European Union, offers a level of credibility not typically offered by other offshore jurisdictions. Those incorporating in Madeira will benefit by being considered a Portuguese corporation, after completing registration. Furthermore, Madeira corporation filing provides effective tax breaks, which make it a very attractive jurisdiction for many investors. With the stability of its government, and excellent connections with the European Union as well as having multiple double taxation treaties, Madeira emerges as a fantastic jurisdiction for incorporation. The name of the island is often misspelled, Maderia and Madiera.
Madeira Company Benefits
There are many benefits for business owners choosing to incorporate in Madeira. Some of these benefits include:
- Madeira provides an excellent tax efficient solution for those looking to incorporate offshore. Corporations, trading companies, and holding companies in this jurisdiction all provide tax breaks and business assistance.
- Madeira allows for company owners to incorporate in an international Free Trade Zone (FTZ). A company incorporated in a Madeira Free Trade Zone is exempt from both income and capital gains taxes.
- Madeira offers much opportunity to company owners with its workforce. There is a vast amount of both skilled and unskilled labor in Madeira that is both readily and easily employable. Furthermore, the workforce, in general, speaks multiple languages and reasonable wages make them relatively affordable to employ.
- When compared to other offshore jurisdictions in the European Union, Madeira offers not only low wage employees, but low operating costs overall. The telecommunications are modern and reasonably priced, facilities are reasonably priced and accommodating for workers, and energy costs are affordable, offering the business owner extremely low operating costs.
- Madeira, when compared to other jurisdictions in the European Union, has a much more affordable cost of living. It costs about 50% less to live in Madeira than it does to reside in many other regions of the European Union.
- International Entity Business Status is available to certain company industries incorporating in Madeira. Businesses that obtain this status exist outside the scope of the GST. Most of the companies that qualify are not providing goods and services to the region, but instead work as trust or fund companies.
- EU VAT numbers can be obtained for entities incorporating in Madeira.
- Companies incorporated in Madeira can be located anywhere in the world as long as they list a registered office address located inside Madeira as well, for receipt of official documents.
- Those forming their corporations in Madeira as an IBC are likely to only pay 5% corporate taxes for many years, as of this writing.
- A Madeira corporation can remit dividends to non-residents without incurring withholding taxes, as long as the corporation is correctly formed.
- Another advantage is that corporate formation in Madeira provides limited company owners is credibility. Many do not consider corporations from Madeira to be “offshore” since Madeira is a part of the European Union. According to the EC Treaty, Article 299. A Madeira corporation is considered a Portuguese business with special tax benefits.
- As a Portuguese company, a Madeira IBC company can provide a Certificate of Residence issued by the Portuguese Tax Agency.
Madeira Corporate Legislation
As stated above, Madeira corporations are considered to be Portuguese corporations. Therefore, the corporate legislation they follow is the Portuguese Companies Code. Also as mentioned, Madeira is part of the European Union. As such, their companies are not considered “offshore,” but actual as actual Portuguese companies with certain tax benefits, as outlined in EC Treaty, Article 299.
Corporate Name in Madeira
Business owners looking to incorporate in Madeira must find unique corporate names that do not share similarities with already registered entities.
The corporation’s name is required to end with the word “Limitada” or its abbreviation “LDA”.
If the company has only one member, the corporation’s name must end with “Sociedade Unipessoal” or word “Unipesso.”
Madeira Office Address and Local Agent
Those incorporating in Madeira are required to have both a registered local office and agent located in Madeira for process server paperwork.
Madeira Shareholders
A company incorporating in Madeira is required to have at least two shareholders, although in some cases, one is allowed, if a “unipersonal” company is formed. This type of company is an LDA with one owner. LDAs with one owner are restricted from owning other unipersonal companies. Furthermore, there are no requirements for shareholders to reside in Madeira. Companies can utilize shares as registered or to a bearer.
Directors and Officers
Limited company owners incorporating in Madeira must have one or more directors. LDAs must have directors who are natural persons, that is, they cannot appoint corporate directors. Either shareholders or third parties can be directors of the corporation.
Directors must be stated in the corporation’s articles of association, and elected or removed from office at the company’s yearly meeting by the shareholders. The Directors can be remunerated or non-remunerated.
Companies are required to have an auditor, who is elected at their yearly general meeting. Both the auditor and the directors are responsible for submitting yearly tax and auditing information, as required by Madeira’s government.
Authorized Capital
The minimum authorized capital of €50,000 is required, as of this writing. The capital is divided into shares with or without a nominal value, each representing the same fraction in the capital.
Taxes
Those forming their corporations in Madeira as an IBC are likely to only pay 5% corporate taxes, as of this writing.
Annual Fees
The yearly fees for company owners incorporating in Maderia is €1800, at the time of this writing.
Public Records
Registered shares allow the issuer to know at any time the identity of its holders.
Accounting and Audit Requirements
Annual accounts must be submitted to the local tax authorities even in cases where there is neither liability to taxation nor any activity. The reporting is relatively simple.
Annual General Meeting
A Shareholders meeting must be held at least once every year to approve the annual accounts and can be held whenever required by law or deemed convenient by the board of directors or supervisory board, or shareholders.
Time Required for Incorporation
The time required to complete the incorporation process in Madeira is 15-30 days.
Shelf Companies
Shelf companies are available in Portugal for those who wish to have a corporation in their hands more quickly.
