Christiano Ronaldo’s hometown of Madeira is a secret tax haven in Portugal, unknown to many foreigners. The island’s unique position as an EU-approved low-tax jurisdiction sets it apart from many traditional tax havens.
Golden visa investors can also incorporate a company in Madiera, to take advantage of just 5% corporate tax, lowest in Europe for a limited time.
Madeira is presently one the best locations in the E.U. for companies with operations in the European single market and worldwide. Madeira’s appeal to international investors have been the result of the island’s consistently low inflation rate, low taxation, and its extremely competitive operational costs, in comparison with other European locations.
With reduced taxation, adequate infrastructures, competitive operational costs, safety and quality of life, Madeira is positioned to provide investors with a unique package of benefits, offering a wide range of solutions to enhance the efficiency and performance of various forms of investment.
The present tax regime allows the incorporation of new entities within the legal framework of the International Business Centre of Madeira (IBC) until the 31st of December, 2026, granting a reduced corporate tax rate of 5%, applicable on the taxable income, until the 31st of December, 2028.
Non-resident single and corporate shareholders of Madeira’s IBC companies will benefit from a full exemption from withholding tax on dividend remittances from the Madeira companies, provided that they are not resident in jurisdictions included in Portugal’s “black list”. Moreover, Portuguese corporate shareholders will also be exempt if holding a participation of at least 10% for 12 consecutive months.
In addition, the following benefits will be applicable:
- Exemption on capital gains payments to shareholders not resident in black listed jurisdictions;
- No withholding tax on the worldwide payment of interest, royalties and services.
Documents, contracts and other operations carried out by IBC companies will benefit from an 80% exemption on stamp (capital) duty, provided that other parties involved are not resident in Portuguese territory or are also companies operating within the legal framework of the IBC of Madeira.
Companies licensed in the IBC of Madeira will also benefit from an exemption of 80% applicable to municipal property tax and property transfer tax, regional and municipal surtax as well as any other local taxes.
To qualify for the tax reductions, companies incorporated in Madeira’s IBC have to comply with one of the following pre-established requirements:
- Creation of one to five jobs in the first 6 months of operation and undertake a minimum investment of €75.000 in the acquisition of fixed assets, tangible or intangible, in the first two years of operation;
- Creation of six or more jobs in the first 6 months of operation.
