Looking for a startup guide? Incorporating a startup in Portugal may lead to a wealth of opportunities, especially when leveraging the current advantages of the Madeira International Business Centre (MIBC).
Why Choose Madeira for Your Startup?
Madeira, as an Autonomous Region of Portugal, is not just the Pearl of the Atlantic but a strategic business hub within the Portuguese foreign investment landscape. Madeira’s IBC, established in the 1980s as a state aid, offers a range of incentives specifically designed to attract foreign direct investment and diversify the regional economy of this Outermost Region of the European Union. Key benefits include:
- Competitive Tax Rates: Companies licensed under the MIBC and complying with the required economic substance requirements benefit from a reduced corporate tax rate of 5% (instead of the standard 14,7%) on income derived from non-Portuguese clients.
- Full EU Market Access
- Skilled Workforce: Madeira has a highly educated and multilingual (mainly English and Spanish) workforce, with a University producing IT Engineers graduates every year. It is ideal for startups aiming for international reach.
- Business-Friendly Environment: The region offers a stable political and social environment with supportive business infrastructure.
Startup Guide: Essential Steps to Launch Your Startup in Madeira
1. Choose the Appropriate Business Structure
Select a business structure that aligns with your startup’s long-term goals:
- Limited Liability Company (Lda): Ideal for small to medium enterprises, requiring a minimum share capital of €1 per share (although we strongly recomend more).
- Branch: Suitable for foreign companies seeking a local presence without forming a separate legal entity.
- Holding Company (SGPS): Designed solely to manage investments, participations and subsidiaries.
2. Register Your Company
The registration process involves:
- Documentation: Prepare identification documents for shareholders and directors, articles of incorporation, and a business plan.
- Registration: Apply for MIBC licensing, submit the necessary documents to the Commercial Registry, and obtain a provisional identification card.
- Timeline: Company formation typically takes 4 weeks if all documentation is in order.
4. Fulfil MIBC Licensing Requirements
To benefit from MIBC incentives, your company must meet stringent economic substance requirements:
- Employment: Create 1–5 full-time local jobs, regardless of employees’ nationality, within the first six months of activity.
- Investment: Make a minimum investment of €75,000 in tangible or intangible assets within the first two years. This requirement is only needed if the company employs fewer than six employees.
5. Compliance and Reporting
Maintain compliance with Portuguese regulations:
- Accounting: Adhere to Portuguese accounting standards and file annual corporate tax returns by engaging a Certified Accountant as required by law.
- Substance Requirements: Ensure ongoing compliance with MIBC substance requirements to retain tax benefits.
Double Taxation Treaties: Portugal, and therefore Madeira, has an extensive network of double taxation agreements, reducing the tax burden on international operations.
Conclusion
Launching a startup in Portugal, particularly within the Madeira International Business Centre, presents a strategic advantage for entrepreneurs aiming for international growth. With its favourable tax regime, access to the EU market, and supportive business environment, Madeira stands out as an ideal location for new ventures.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
