Madeira- autonomous region of Portugal, located on the North Atlantic islands about a thousand kilometers from the mainland. Archipelago first mentioned in the 14th century, and the island was officially discovered and colonized in 1419. Madeira and Porto Santo is the only inhabited islands in whole archipelago. In the 18th century the island is already known as a resort. In the second half of the 20th century, after the Revolution, the island was given a special administrative status; it is a part of EU as particularly remote area.
From an economic point of view Madeira is one of the most famous zones, it has stable and sufficiently dynamic economy. Archipelagos’ free economic zone has a special industrial development zone. SEZ tax benefits and advantages have made Madeira the second most successful region in Portugal, after Lisbon. Despite the high degree of autonomy in financial matters and distance from the capital city, the archipelago is almost entirely subject to all legislation of Portuguese central authority.
The most common business entities
The easiest foreign business registration possibility is public limited company (PLC).
The main features
Madeira offers the advantages of the EU company, SEZ with a sufficiently low level of taxation, as well as loyal business requirements.
Madeira's legal system is based on Portuguese law, corporate legislation is regulated by trade code adopted in the nineteenth century, and European Union legislation largely affects the legislation.
There is no minimum capital, but the limited liability company has a certain minimum stock limits. For companies with one shareholder that is one Euro, while the other - two Euros. The registered capital must be paid till the end of the first financial year.
The main requirements for the directors and shareholders
Portuguese PLC company must have at least one director with no restrictions to his/her nationality and citizenship, but each director must be registered in Tax Service and get a special tax number. If the director is a legal person, he must have a representative, who must then obtain a registration number. There is an important nuance that the directors are fully responsible if the company does not pay taxes or fees.
The requirements are similar to shareholders- there must be at least two shareholders, but it is possible to register a company with one shareholder. Shareholders must be registered in the Registration Chamber. All information on the directors and shareholders is available on the open register.
Disclosure of the company’s beneficial to the government bodies
Information on the beneficiaries is not publicly available and can be disclosed only with the court's decision or to the Tax Service during the inspection.
Overall, the tax system copies the Portuguese system, but thanks to the SEZ, there are several beneficial cues. For example, it has reduced income tax- 5%, the exemption from withholding tax, state fees and notary fees, and a number of other advantages. At the same time the company must meet certain requirements to have these benefits.
Tax return must be submitted at the end of the tax year, using the Portuguese tax administration website. For some companies there is income tax prepayment.
For the companies which are registered in Madeira it is necessary to keep accounting reports in Portuguese and they must be kept at the registered office of the company. Accounting officer should be member of the Portuguese Accountants guild. Financial statements must be submitted annually in Portuguese and they are freely available.