Madeira International Business Center

Investing in Madeira remains an attractive solution for those looking to operate in Portugal and abroad.

The International Business Center of Madeira (MIBC, also known as Madeira Free Trade Zone) remains attractive for foreign and Portuguese investors, representing the single Portuguese fiscal incentive created to directly support the internationalization of worldwide companies.

Duly licensed companies benefit from one of the lowest corporate income tax (CIT) rates in the EU, 5%, to which 0% withholding tax on interest, capital gains, services, royalties and dividends is added (provided that certain requirements are met).

The MIBC is a real European incentive for the internationalization of exporting companies or international services providers.

Most service providers can benefit from the MIBC, including those engaged in trading, e-business and telecommunications, consultancy and marketing services, as well as intellectual property management, real estate project development or holding-related services.

Another important feature of the MIBC related benefits is that once the licensing process is done, the tax benefits become immediately effective. Unlike European funds there is no waiting period between the approval of the incentive and its implementation.

The MIBC is a tax benefit scheme granted under the Portuguese Tax Benefits Statute and duly approved by the European Commission.

Since the MIBC is governed by Portuguese and European Law, it offers the required legal certainty to its investors. All companies duly licensed to operate within the MIBC comply with all legal requirements to operate in Portugal, and therefore in the EU.

Given the above, all e-commerce directives have been duly transposed into Portuguese law, including those relating to electronic billing, digital signatures and data protection.

Such facts make it clear that, in addition to being a completely transparent tax incentive, the MIBC also allows a for an effective tax saving that can be used in the internationalization of the licensed company.

In addition to all the above-mentioned benefits, companies that are duly licensed in the MIBC may cumulatively apply for European funding under the Madeira 14-20 program and other financial instruments available to companies based in the Autonomous Region of Madeira.

Last, but not least, Madeira has all kinds of high quality support services, such as a broad network of information technology companies, consulting firms, financial services and administrative support, thus making operational costs low when compared to other European markets.

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EU Citizens – Residency Requirements

EU citizens who remain in Madeira (or in any Portuguese territory) for longer than 3 months have to formalize their right of residence by registering.After 3 months in Madeira (or in any Portuguese territory), EU citizens have 30 days to register, after which they receive a registration certificate.They must apply at their local town hall (Câmara Municipal) and provide the following documents:Workers

  • a valid identity document
  • a declaration on oath that they are employed or self-employed in Madeira (or in any Portuguese territory)

or

  • a declaration on oath that they have sufficient financial resources for themselves and their family members, and a health insurance policy, if the country of which they are citizens has the same requirement for Portuguese citizens.

Pensioners

  • a valid identity document
  • a declaration on oath that they have sufficient financial resources for themselves and their family members, and a health insurance policy, if the country of which they are citizens has the same requirement for Portuguese citizens.

Students

  • a valid identity document
  • a declaration on oath that they are registered with an officially accredited public or private educational establishment
  • a declaration or other means of proof that they have sufficient financial resources and a health insurance policy, if the country of which they are citizens has the same requirement for Portuguese citizens.

Failure to register is an offence punishable by a fine of between EUR 400 and 1500.Registering or remaining registered without meeting the necessary conditions is an offence punishable by a fine of between EUR 500 and 2500.In the event of an abuse of the law, fraud, or false marriage or partnership of convenience, residence rights will be refused and withdrawn.For further information please and assistance in complying with immigration requirements in Madeira, please do not hesitate to contact us management@mcs.pt and request a fee quote.

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