Investing in Madeira Matters

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Investing in Madeira Matters

by | Tuesday, 21 April 2020 | Corporate Income Tax, Investment

Investing in Madeira Matters

Investing in Madeira matters, not only for the (international) growth of your business/company, but also because through it you can be part of a group of international investors re-shaping the archipelago’s economy.

The creation of the International Business Center of Madeira (also known as the Free Trade Zone of Madeira), resulted from a set of circumstances:

  • The ancestral aspirations of the Madeirans were founded on the existence of a free port of consumption existing in the Canary Islands.
  • The movement that, under the auspices of the Commercial and Industrial Association of Funchal (ACIF), led, given the situation of the Madeira’s economy in the 70’s. XX; and
  • The reflection of the free zone model most appropriate and in line with the geographical, geological, morphological, economic and social characteristics of Madeira.

Thanks to the combined efforts of all the stakeholders involved in the process, the Autonomous Region of Madeira was able to fully implement the International Business Center of Madeira in 1986. Since that date international investors have taken the tax benefits granted by the Regional Government to not only grow economically but also to promote the archipelago’s development.

Today international investors operating within the advantageous tax regime of the International Business Center, with a corporate tax rate of 5% (the lowest in Europe), contribute actively to the diversification of the island’s tourism dominated economy.

Here is why investing in Madeira matters, from a corporate perspective:

  • 5% Corporate Income Tax Rate;
  • 0% Withholding on payment of dividends/profit distribution to non-resident shareholders;
  • 0% Withholding tax on the payment of interests, royalties and services;
  • 0% Taxation on capital gains payments to shareholders;
  • 80% exemption on stamp duty;
  • Access to a qualified labour force;
  • Access to European and international markets;
  • Excellent IT and Communications Infrastructures.

Here’s why investing in Madeira matters, from an economic perspective, apart from the economic substance requirements foreseen to benefit from the above tax benefits:

  • Your company will be among those in the International Business Center contributing for 21% of the archipelago’s GDP;
  • Your company will be among those in the International Business Center contributing for 43% of the total corporate income tax revenue of the archipelago;
  • Your company will be among those in the International Business Center contributing 14,1% of the total tax revenue of the archipelago.

All in all, your investment in Madeira matters not only for your business, which is granted the ideal conditions for international growth and competitiveness, but it also matters because your investment also helps to change the lives of the population of an Outermost Region of the European Union, through the small tax revenue you will be charged for.

Our team at MCS, with more than 20 years of experience in the sector, is able to assist you in setting up and managing a company within the MIBC or Portugal. For more information click here.

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