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Company Incorporation
Madeira
The fees for incorporation services of a
Madeira Limited Company:
$4,700 include:
Incorporation Fee: $2900 Include:
- all outgoing charges and out-of pocket
expenses (i.e. fax, courier charges, etc.).
- Prepared General Power of Attorney with minutes and resolution which will
appoint you to be the lawful Representative Agent of the Company and which
will allow you to act for the Company in all matters, including opening and
operating bank accounts.
Registered Office/Agent: $800 p.a.
Government Licence: $1,000 p.a.
Initial capital of PTE400,000 that is approx. US$2,100 which need to paid -in.
Once the share certificates are issued and the company active,
these funds remain blocked with Madeira authorities
Total First Year: $4700 + (paid-in capital of $2100)
Annual Maintenance After First Year:
Registered Office/Agent: $800 p.a.
Government Licence: $1000 p.a.
Total: $1800
Optional Services:
Nominee Corporate Director (one) $300 p.a.
We to act as the fiscal agent for the company and being responsible for V.A.T
and audit/accounting compliance matters: US$600 p.a.
Filling in monthly or quarterly VAT returns and annual accounts in the
Portuguese language and currency: US$900 p.a. + the charges for the preparation
and submission of quarterly V.A.T. returns and accounts will be made on a time
spent basis and will obviously vary according to the amount of activity
undertaken by the company
VAT and annual accounts
A Madeira company must register for V.A.T. as a matter of Company Law, and submit
quarterly V.A.T. returns. Additionally all Madeira companies must submit full
audited accounts at the end of each financial year. We are able to arrange for
the registration of the Company for V.A.T., the preparation and submission of
quarterly V.A.T. returns and the preparation and filing of full audited accounts
upon request. The charge for having us act as the fiscal agent for the company
and undertake the responsibility for V.A.T and audit/accounting compliance
matters is a minimum of US$900 per annum and the charges for the preparation and
submission of quarterly V.A.T. returns and accounts will be made on a time spent
basis and will obviously vary according to the amount of activity undertaken by
the company.
Timescale:
Due to the fact that the initial steps of incorporation
of a Madeira company follow the same pattern as that for a Portuguese mainland
company, the inevitable Portuguese bureaucracy causes substantial delays and a
minimum of two months should be allowed for incorporation.
Than it does take approximately 2 weeks for documents to arrive from Madeira by
DHL courier services.
A normal Madeira company is exempt from taxation
until 31st December 2011 but must pay tax at a rate of 36% on dividends received
from EU subsidiaries but 95% of that income is exempt from tax making an
effective rate of tax on those dividends of 1.8%. The company is otherwise
exempt from all tax.
The capital of PTE400,000 that is approx.
US$2,100 MUST be issued and fully paid-up!
Double taxation treaties:
Madeira companies which are located within the Offshore Financial Centre can
be structured so as to be completely exempt from all forms of Madeira taxation
until 31st December 2011. Notwithstanding this attractive tax treatment, a
Madeira company is considered to be the same as a normal Portuguese tax paying
company and therefore falls within the terms of the taxation treaties signed by
Portugal with Austria, Belgium, Brazil, Denmark, Finland, France, Germany,
Italy, Japan, Mozambique, Norway, Spain, Switzerland and the United Kingdom. The
terms of these treaties provide that payments from these countries can be made
with a much lower rate of tax being withheld at source. For example, royalties
being paid by a UK company to a non-resident corporation or individual would
normally be subject to a withholding tax of 25%. However, if those same
royalties are paid to a Madeira company the rate of withholding tax may be
reduced to10% by virtue of the provisions of the UK/Portugal tax treaty. This is
despite the fact that those same royalties would not be subject to tax on
arrival within the accounts of the Madeira company.
We are pleased to provide a summary of the salient features of
companies incorporated in Madeira.
[ BACKGROUND ] [ COMPANY FORMATION ]
[ SHARE CAPITAL, TAXATION, LICENCE FEES &
COMPLIANCE ]
[ STRUCTURE OF MANAGEMENT ]
CORPORATE FEATURES
| GENERAL |
| Type of Company |
Limitada |
SA |
| Political Stability |
Good |
| Common or Civil Law |
Civil |
| Disclosure of Beneficial Owner |
No |
| Migration of Domicile Permitted |
Yes |
| Tax on Offshore Profits |
Nil |
| Language of Name |
Latin Alphabet |
| CORPORATE REQUIREMENTS |
| Minimum Number of Shareholders |
Two* |
Five* |
| Minimum Number of Directors |
Two* |
Three* |
| Bearer Shares Allowed |
No |
Yes |
| Corporate Directors Permitted |
No |
Yes |
| Company Secretary Required |
No |
No |
| Standard Authorised Share Capital |
Esc. 1m |
Esc. 10m |
| LOCAL REQUIREMENTS |
| Registered Office/Agent |
Yes |
Yes |
| Company Secretary |
No |
No |
| Local Directors |
No |
No |
| Local Meetings |
No |
No |
| Government Register of Directors |
Yes |
Yes |
| Government Register of Shareholders |
Yes |
Yes |
| ANNUAL REQUIREMENTS |
| Annual Return |
No |
No |
| Submit Accounts |
Yes |
Yes |
| RECURRING GOVERNMENT COSTS |
| Minimum Annual Tax/Licence Fee |
US$ 1,000 |
US$ 1,000 |
| Annual Return Filing Fee |
Nil |
Nil |
GENERAL INFORMATION
The Madeira archipelago is made up of the Islands of Madeira, Porto Santo,
Desertas and Selvagens. The name of the group islands is taken from the largest island
Madeira. The Madeira landmass encompasses approximately 770 sq km and is located in the
Atlantic Ocean, 1,000 km from mainland Portugal and 870 km from North Africa. The
topography is mountainous and the highest point is 1,862 metres. The scenery is
spectacular and the vegetation diverse.
POPULATION
The population is approximately 265,000 of which 100,000 live in the
capital Funchal and are all mainly of Portuguese origin, with a small expatriate British
community.
POLITICAL STRUCTURE
Madeira was discovered and colonised by the Portuguese in 1419 and partial
political autonomy was eventually granted in 1976. Madeira is represented in Lisbon by
five members who are elected by universal suffrage.
Portugal has a written constitution, which defines the political structure
and the role of the legislature.
The Madeira Regional Parliament is an elected body, which legislates on
Madeira interests such as the budget, and its responsibilities are defined in the
constitution. The Madeira Government cannot however, overrule decisions made by the
Central Government in Lisbon nor override political unity with Portugal.
INFRASTRUCTURE AND ECONOMY
Communications are good; there are six daily flights to and from Lisbon,
the Portuguese capital, and Lisbon Airport is an international air transport hub. The
flight from Lisbon to Madeira is one hour and thirty minutes. There are also flights from
Madeira to other European countries including five direct scheduled flights a week to
London.
Madeira has an excellent digital telecommunications system with direct
dialling to most countries. Postal and courier services are also good offering next day
deliveries to mainland Portugal.
LANGUAGE
Portuguese is the national language, English is
taught in schools and is used daily in commerce and international trade.
CURRENCY
Portuguese Escudo.
EXCHANGE CONTROL
None.
TYPE OF LAW
Civil Law.
PRINCIPAL CORPORATE LEGISLATION
Portuguese Companies Code (Codigo das Sociedades Comerciais).
COMPANY FORMATION
TYPE OF COMPANY FOR INTERNATIONAL TRADING
Sociedade por Quotas - Limitada (Lda’s) or Sociedade Anónima (SA).
In 1993, Portuguese legislation allowed the incorporation of Lda’s or
SA’s with one sole quota/share holder for companies operating within the Madeira Free
Trade Zone - so called "Sociedade Unipessoal" - Single Member companies.
Portuguese legislation provides for the incorporation of a pure holding
company called SGPS (Sociedade Gestora de Participacoes Sociais).
PROCEDURE TO INCORPORATE
Once name approval has been obtained and a
Licence obtained for the proposed entity to operate within the Madeira Free
Trade Zone, a Public Deed is executed before a Notary Public. The Public Deed is
then registered at Commercial Registry of Madeira.
RESTRICTIONS ON TRADING
A Madeira company cannot undertake any business that is not specified in
its constitution.
A Madeira Company cannot undertake the business of Banking, Insurance,
Assurance, Reinsurance, Fund Management and Asset Management (other than its own assets)
without prior consent and licensing.
POWERS OF COMPANY
The powers and objects of a Madeira Company are contained within its
constitution and have to be specific.
LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
Portuguese, but translations can be provided.
REGISTERED OFFICE REQUIRED
Yes, must be maintained in Madeira.
shelf COMPANIES AVAILABLE
Yes.
TIME TO INCORPORATE
60 working days.
NAME RESTRICTIONS
A name that is similar to or identical to an existing company. A name that
in the opinion of the Registrar may be considered undesirable or offensive. A name that
may imply an illegal activity. A name that may imply government patronage.
All Madeira companies must include words to describe clearly the objects
of the company, e.g. consulting, engineering, marketing and trading.
LANGUAGE OF NAME
Legislation was passed in September 1995 allowing the approval of foreign
names for companies operating within the Madeira Free Trade Zone. A company name must
refer to a company’s main object clause.
NAMES REQUIRING CONSENT OR A LICENCE
The Portuguese names and their foreign language equivalent for bank,
building society, savings, loans, insurance, assurance, reinsurance, fund management,
asset management, investment fund or any name that may imply an activity associated with
the banking and insurance industries.
SUFFIXES TO DENOTE LIMITED LIABILITY
Limitada (Lda).
Sociedade Anónima (SA).
DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
None.
SHARE CAPITAL, TAXATION, LICENCE FEES AND
COMPLIANCE MATTERS
AUTHORISED AND ISSUED SHARE CAPITAL
Esc. 1 million minimum authorised and issued for Lda.
Esc. 10 million minimum authorised and issued for SA.
CLASSES OF SHARES PERMITTED
Madeira Limitada (Lda) Companies do not issue shares. Instead quotas are
registered at the Commercial Registry of Madeira and members are issued with notarised
extracts from the Commercial Registry of Madeira to record their ownership.
Madeira Sociedade Anónima (SA) companies may issue either registered or
bearer shares with voting or non-voting rights.
Madeira Sociedade Unipessoal (Single Member) SA companies must issue
registered shares with voting or non-voting rights, but may not issue Bearer Shares.
BEARER SHARES PERMITTED
SA companies only.
TAXATION
All Madeira companies are exempt from tax on income obtained from
activities carried on outside of Portugal until 31 December 2011. Nominal taxation is
levied on pure holding companies (SGPS). These are taxed on EU dividends at an effective
rate of 1.7% (34% corporate tax on 5% of profits).
DOUBLE TAXATION AGREEMENTS
Companies licensed to operate within the Madeira Free Trade Zone are for
all purposes Portuguese resident, and therefore can in most cases benefit from the double
tax treaties signed by Portugal.
Portugal has signed double tax agreements with the following countries:
Austria, Belgium, Bulgaria, Brazil, Czech Republic, Finland, France, Germany, Hungary,
Ireland, Italy, Mozambique, Norway, Poland, Republic of Korea, Spain1,
Switzerland, United Kingdom and Venezuela. Negotiations are nearing completion with other
countries.
1Treaty relief denied to Madeira
companies controlled by non-residents of Portugal.
LICENCE FEES
LICENCE FEES
US$ 750 Application Fee and US$ 1,500 Annual fee. Both are reduced by
1/3rd to US$ 500 and US$ 1,000 respectively for companies represented by licensed
management companies.
FINANCIAL STATEMENT REQUIREMENTS
The accounts of a Madeira company must be prepared in the
Portuguese language in accordance with Portuguese accounting rules. Normally the fiscal
year ends on 31st December, and accounts
must be approved by the shareholders before the 31st March of the following year. A tax
form must be filed with the authorities before the end of May.
STRUCTURE OF MANAGEMENT
DIRECTORS
It is normal to appoint two directors to a Limitada and three to a SA. The
directors must be natural persons of any nationality and need not be resident in Madeira.
Unipersonal companies may have one shareholder.
SHAREHOLDERS
The minimum number of shareholders for a Lda company is two, and five for
a SA company. Companies incorporated as a "Sociedade Unipessoal" may have one
shareholder.
ORDER
FIND/BUY RELATED
BOOKS!
Whilst
every effort has been made to ensure that the details contained herein are correct and
up-to-date, it does not constitute legal or other professional advice. We do not accept
any responsibility, legal or otherwise, for any errors or omissions.
Please go to our Uses of offshore Companies Page where you will
find interesting information on the benefits of using offshore companies and trusts for
business and personal use, links to information on other locations and details of our
products and services.
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