Madeira Island has emerged as a burgeoning hub in the dynamic world of cryptocurrency, attracting a global audience for its unique business opportunities. However, for crypto trading and exchange companies, navigating the landscape involves understanding the interplay of European Union laws and the specificities of the Madeira International Business Centre (MIBC) regime.
Under the EU’s Markets in Crypto-Assets (MICA) Regulation, recently approved by the European Parliament, crypto trading and exchange are classified as digital finance activities, significantly impacting these businesses. Notably, under MIBC rules, as endorsed by the European Commission, financial activities are exempt from the tax benefits typically available under this regime. This exemption is crucial for any crypto company considering establishing operations in Madeira or Portugal.
Despite these regulatory nuances, Madeira still presents a viable option for crypto companies. The island offers a corporate tax rate of 14.7%, which, while not as advantageous as the MIBC benefits, remains competitive. Understanding and complying with these regulatory frameworks is essential for investors and crypto companies looking to set up in Madeira.
At Madeira Corporate Services, we recognise the complexities of crypto companies in this environment. To assist in navigating these challenges, we offer to connect investors with our partner law firm in Lisbon. This collaboration aims to ensure crypto companies achieve regulatory compliance, an essential step for successful operation in the EU.
Exploring alternatives is recommended for crypto companies seeking more crypto (and tax) friendly jurisdictions. The global landscape for cryptocurrency is rich, with regions offering tailored regulatory frameworks and incentives designed to foster the crypto industry’s growth.
In conclusion, while Madeira presents certain limitations for crypto companies under EU regulations and MIBC rules, it remains an attractive option for its competitive corporate tax rate. For those looking to establish a crypto company in Madeira, partnering with knowledgeable legal experts can pave the way for successful compliance and operation. Investors and crypto businesses should stay informed and consider jurisdictions that align with their operational and financial objectives in the rapidly evolving crypto sector.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal, financial, or investment advice. Please consult with our professionals who specialise in Portuguese taxation before making any tax-related decision.
Miguel Pinto-Correia holds a Master Degree in International Economics and European Studies from ISEG – Lisbon School of Economics & Management and a Bachelor Degree in Economics from Nova School of Business and Economics. He is a permanent member of the Order of the Economists (Ordem dos Economistas)… Read more
