Taxation is one of the main reasons that hinder the economic growth of a startup and finding the correct jurisdiction for your rising business can be troublesome. That is why Portugal has come up with a taxation business that is startup-friendly.
Startups looking into expanding their international business, have access to a skilled workforce (namely IT engineers), good and speedy internet connections should be looking into locating their business in Madeira Island, Portugal.
Why start Startups on Madeira Island?
Madeira Island is located 1h 30min by plane from Lisbon, as offers a 5% corporate rate on all income derived from profit with non-Portuguese companies, full exemption from withholding tax on dividend remittances from the Madeira, among other tax benefits.
The MIBC is a tax benefit scheme granted under the Portuguese Tax Benefits Statute and duly approved by the European Commission.
Since the MIBC is governed by Portuguese and European Law, it offers the required legal certainty to its investors. All companies duly licensed to operate within the MIBC comply with all legal requirements to operate in Portugal, and therefore in the EU.
Given the above, all e-commerce directives have been duly transposed into Portuguese law, including those relating to electronic billing, digital signatures and data protection.
Such facts make it clear that, in addition to being a completely transparent tax incentive, the MIBC also allows for an effective tax saving that can be used in the internationalization of the licensed company.
In addition to all the above-mentioned benefits, companies that are duly licensed in the MIBC may cumulatively apply for European funding under the Madeira 14-20 program and other financial instruments available to companies based in the Autonomous Region of Madeira.
Apart from the above, employees of startup companies and other technological companies might also be entitled to a 20% flat rate on their salary for a period of 10-years and a 0% tax rate on the foreign income they earn. These incentives not only allow you easily bring your team to live in on the world’s most beautiful islands but also to attract the best of the best worldwide.
We know that bureaucracy and costs can slow down your vision and hinder your will to relocate to another jurisdiction, but we at MCS believe that Madeira Island, Portugal, holds the key to its growth.
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