Madeira offers the perfect conditions to attract digital nomads with its natural beauty, nature activities, culture and fantastic climate conditions all year round.
With reduced taxation, adequate infrastructures, competitive operational costs, safety and quality of life, Madeira is positioned to provide digital nomads with a unique package of benefits, offering a wide range of solutions to their specific needs.
Being speedy a internet a must in a digital nomad way of life, Madeira benefits from a Submarine Cable Station, hosted in the “Madeira Datacenter”, operating several international optical submarine cables, allowing interconnectivity with national and international SDH networks and providing, as such, significant advantages in terms of quality, cost, bandwidth and scalability.
Another available infrastructure is the Internet Gateway provided by Marconi Internet Direct (MID). This MID offers international Internet access without any kind of contention and using diversity in the access to international backbones.
Last, but certainly, not least he IP platform has its international connectivity distributed by: 3 PoPs (London, Amsterdam and Paris), peering connections with hundreds of major international ISPs and IP transits to Europe and the USA.
All the above infrastructures combined with an easy going island life, makes Madeira a unique destination, within Europe, to relocate as a digital nomad.
EU-Citizens, EEA Citizens and Swiss Citizens
EU citizens living 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.
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of an abuse of the law, fraud, or false marriage or partnership of convenience, residence rights will be refused and withdrawn.
If you are third-country national, kindly note that you are not entitled to perform any job to a Portuguese entity without visa. Furthermore, prior to your relocation be sure to have proper entry visa if you plan to stay longer than the visa-free period.
At the moment Portugal does not have any form of digital nomad visa. Given this should you be planning to stay for an extended period of alternative visas such as the passive income visa or the golden visa may be routes you may consider. It is also important to note that different visas have different minimum staying requirements.
Prior to your relocation be sure to understand what type of visa is more appropriate to your specific situation and engage a Bar certified lawyer to guide you through this process.
Generally speaking, those digital nomads residing up to 183 days in a given year in Madeira are not considered residents, for taxation purposes, and therefore not subject to personal income tax on their worldwide income.
Notwithstanding the above, should you have a real estate property (either rented or purchases) that you can occupy in 183 days in a given year or should you engage Portuguese entities as a free-lancer during that time period then personal income tax implications could arise. Under theses circumstances be sure to engage a tax consultant in order to avoid any unpleasant surprises.
If you are considering a longer stay, either as a free-lancer or an employee, there are tax benefits for expats wishing to effectively relocate to Madeira, namely those foreseen under the Non-Habitual Tax Resident scheme.
Personal Income Tax
Digital nomads wishing to relocate for an extensive period, more than 183 days, may be liable to Portuguese personal income tax on their worldwide income. Having that said exploring take the Non-Habitual Tax Resident (NHR) route may be an option that one should consider.
Generally speaking, under the NHR scheme foreign sourced income is exempt from personal income tax in Portugal, provided some requirements are met under the scheme’s rules. In addition, Portuguese sourced income may be subject to a flat tax of 20% if the activity carried our by the digital nomad is deemed as a high-added value activity.
Income derived from buying and selling crypto is not taxable in Portugal, as of this date. Nevertheless the Portuguese Central Bank is set to regulate crypto-trading platforms and given how old (2015) and somewhat ambiguous the tax ruling on crypto income tax exemption is, an application for a new tax ruling is something that you should give a thought before relocating to Portugal.
Alternatively, your income structures should be in line the current rules of the NHR scheme for said crypto income to be exempt from personal income taxation. Tax advice on this matter should be sought after prior to any conversion to crypto to fiat currency as Portuguese tax resident.
Furthermore, as of this date, banks in Portugal are not crypto-friendly and the Portuguese Blockchain Association has informed us that banks are only willing to accept fiat funds from duly accredited (by the Portuguese Central Bank) trading platforms.
Corporate Income Tax
The corporate tax rate applicable to companies in Portugal may vary, depending on which part of the Portuguese territory said companies are incorporated and domiciled. From the get go, the Madeira is the Portuguese territory with the highest tax efficiency for companies.
|Type of entity incorporated||MIBC*||Autonomous Region of Madeira||Portuguese mainland|
|Resident entities and permanent establishments of non-resident entities||5%||14,7%||21%|
|Resident entities characterized as a small or medium enterprises, on the first € 25 000 of taxable profit||11.9%||17%|
* Incorporation of entities within the MIBC – Madeira International Business Center allows for a 5% tax rate is only applicable on taxable profit deriving from non-resident entities (otherwise the normal rates apply) along with additional tax benefits for shareholders. For more detailed information, please click here.
|Type of rates||Autonomous Region of Madeira||Portuguese mainland|
|Normal rate (most goods and services)||22%||23%|
|Intermediate Rate (F&B services)||12%||13%|
|Reduced Rate (food and essential goods)||5%||6%|