Portugal and Malta

Should you wish to incorporate a non-MIBC company, i.e. a general taxation regime company, we at MCS are available to assist you in incorporating a company in Portugal and Madeira.

In accordance with the Portuguese law, from one of the following types of company can be incorporated:

  • Private Limited Company (Lda.);
  • Single Partner Limited Company (Unipessoal Lda.);
  • Private Limited Company (S.A.);
  • Holding Company (SGPS);
  • Limited Partnership Company;
  • General Partnership Company.

Nevertheless, the most common types of companies incorporated in Portugal are either a (Single Partner) Private Limited Company or a Private Limited Company.  This is due to the fact that no minimum share capital is required for these types of companies.

Currently, under Portuguese tax law, companies incorporated in Portugal are subject to a 21% corporate tax rate. Should you incorporate a company in Madeira, under the general taxation regime rules, the corporate income tax rate is 20% and 13,6% for the first EUR 15 000 of profit made by small and medium enterprises.

Note that if you are looking into incorporating a trust in Portugal, this can only be done within the MIBC.

If neither Portugal, nor the MIBC serve your investment and business purposes, or you are planning in either internationalizing your business or restructuring your estate for whatever reason, we at MCS can help you incorporate companies, trusts and foundations in Malta.

Since 1995, our team of legal and tax experts have assisted international investors, UHNWIs and businesses with complying with international and OECD rules. Therefore, we understand the implications and requirements of correctly incorporating and organizing a fully compliant business structure in Malta. Our team’s experience with the Maltese structures dates back to the foundation of MCS itself.

Malta has emerged, over the past decades, as fully efficient and tax compliant jurisdiction within the European Union and in the heart of the Mediterranean sea.

The Maltese tax system is full imputation tax system. This means that  tax on profits paid by the company distributing dividends is “converted” into a tax credit for the shareholder receiving such dividends. This unique legal clause allows the avoidance of double taxation on the same income (for the company and for the shareholder).

Given the fact that the 35% tax rate applied to the company is equal to the maximum tax rate on personal income, paying out dividends through Malta does not lead to further taxation for shareholders. Furthermore,  a shareholder receiving profit dividends can request a tax refund on those profits paid by Maltese company.

The above-mentioned refund depends on the nature of the distributed profits and if these have benefited, or not, of any double taxation relief mechanisms foreseen by the extensive network of Double Taxation Agreements signed between Malta and other 70 countries.

Portugal and Malta

Should you require assistance in incorporating a Portuguese, an MIBC company, or a company in another jurisdiction, namely Malta, do not hesitate to contact us.