Madeira


Madeira began to appear on the maps since 1339. Officially, it was discovered in 1419 by two captains under service to Prince Henry the Navigator, João Gonçalves Zarco and Tristão Vaz Teixeira. Soon first settlers inhabited the island, then the archipelago was promulgated the part of Porugal. The British occupied Madeira as a result of the Napoleonic Wars, a consented occupation starting in 1807 and concluding in 1814 when the island was returned to Portugal. Since 19th century the island has become famous as a resort area. On 1 July 1976, following the democratic revolution of 1974, Portugal granted political autonomy to Madeira, celebrated on Madeira Day. The region now has its own government and legislative assembly.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

12 280 USD

17 280 USD

17 780 USD

I want to order «»

Contact method: and / or

Core Services

12 280 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

970 USD

— Annual government fees

Stamp Duty and Commercial Registry incorporation fee

2 190 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

150 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

500 USD

— Apostilled set of Statutory documents

Basic set of documents

Optional services

от 3 610 USD

Nominee Director

Paid-up “nominee director” set includes the following documents

от 1 290 USD

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

250 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

350 USD

For client with high risk Status

Cost of incorporation, including first year servicing 12280
Cost of nominee director services per year, including an apostilled set of documents 3660
Cost of nominee shareholder services per year, including an apostilled set of documents 1340
Cost of annual service, starting from the second year 2190
Open account in 26764
Incorporation timescale for a turnkey company 1 week
Government tax 750
Country 26680

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
801 sq.km 267.785 (2011) Funchal 18.8% (2013) 33
Location An island in the Atlantic Ocean; 1, 000 km from mainland Portugal
National currency Euro
Conditional reduction of currency EUR
Against USD 0.73
Climate, average max and min t° Subtropical climate; avg. maximum temperature (July) +23°; avg. minimum temperature (January) +15°
Time difference from Moscow - 4 hours
Dialing code +351 (291)
State language Portuguese
Ethnic groups Portuguese
Literacy rate 93.3%
Credit rating BBB
Government type autonomous region of Portugal
Executive branch President and Regional Government
Legislative branch Regional Parliament
Judicial branch a part of Portuguese judicial branch: Constitutional Court, the Supreme Court of Justice, the Court of Auditors, the Supreme Administrative Court, and lower courts
GDP per capita rank 38 (2012)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
No civil law 1 week No No
Types of entity sole proprietor (Empresário em Nome Individual); individual limited liability establishment (Estabelecimento Individual de Responsabilidade Limitada); partnership company (Sociedade em Nome Coletivo); limited partnership company (Sociedades em Comandita); cooperative; limited liability company (Sociedade por Quotas); public limited company (Sociedade anônima); branch of a foreign entity
Incorporation timescale for a new company 1 day
Company suffix Limitada (Lda)
Sensitive words 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
Local registered agent No
Information to be kept at the registered office VAT number; Name (certificate of admissibility); Directors information (copy of the identification document); Share capital (proof of the deposit of the share capital), Shareholders information (fiscal number and address)
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Directors’ meetings/frequency/location No requirements
Company secretary required No
Residency requirements for a secretary No
Qualified secretary required No
Corporate secretary permitted No

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Meetings/frequency/location Yes / annually / at the registered office in Madeira
Beneficiary info disclosure to No

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
1 1 1 No requirements No
Issued capital payment deadlines By the end of the first accounting year
Standard currency Евро
Standard authorized share capital 1
Standard par value of shares 1
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
21% No 23% 25%/25%/25% No
Personal tax 14,5-48%
Corporate tax (in detail) The standard tax rate is 21%. In some regions and for small enterprises, the rate may be lower in terms of part of income.
Capital gains tax. Details Madeira has no capital gains tax
VAT. Details Стандартная ставка НДС составляет 23%. В отношении некоторых товаров и услуг применяются пониженные ставки в размере 13% и 6%
Other taxes No
Stamp duty Rates vary by transaction

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes Yes No No No
Requirement to prepare accounts Yes
Double tax treaties network 79
Tax Exchange Information Agreement network 16
OECD member Yes
Offshore/onshore status according to the RF laws No

GENERAL INFORMATION

General info

Madeira is the Autonomous region of Portugal and a Portuguese archipelago that lies in the north Atlantic Ocean, about 1000 km south-west of Portugal and 500 km west of African coast. Madeira is an outermost region of the European Union. The archipelago includes the islands of Madeira, Porto Santo, and the Desertas, administered together with the separate archipelago of the Savage Islands.
Total area of Madeira is 801 sq. km. Population of Madeira is 267,785 people (2011). Most of the population is Portuguese.
Official language of Madeira is Portuguese.
Official currency is Euro.
Climate of Madeira is subtropical. Average maximum temperature in July is +23°; average minimum temperature in January is +15°.
Time difference with Moscow is -4 hours.
Literacy rate is 93%.
Calling code of Madeira is +351 (291).

History

Madeira began to appear on the maps since 1339. Officially, it was discovered in 1419 by two captains under service to Prince Henry the Navigator, João Gonçalves Zarco and Tristão Vaz Teixeira. Soon first settlers inhabited the island, then the archipelago was promulgated the part of Porugal. The British occupied Madeira as a result of the Napoleonic Wars, a consented occupation starting in 1807 and concluding in 1814 when the island was returned to Portugal.
Since 19th century the island has become famous as a resort area.
On 1 July 1976, following the democratic revolution of 1974, Portugal granted political autonomy to Madeira, celebrated on Madeira Day. The region now has its own government and legislative assembly.

Government Type

Madeira is an autonomous region of Portugal.
Head of the Region is the President of the Regional Government. The President of the Regional Executive (Presidente do Governo Regional) is appointed by the Representative of the Republic according to the results of the parliament election. The today president Alberto João Jardim has ruled since 1978.
Executive power is exercised by the President and the Regional Government. However, Government of Madeira cannot overstep the decision of the Central Government in Lisbon and cannot violate political stability in Portugal.
Legislative power belongs to the Regional Parliament which is elected for a 4-year term and decides on budget. 5 elected members represent Madeira in Lisbon.
Despite the autonomous status of Madeira, the most part of the laws introduced by the Central government and Portuguese Parliament, are in force in Madeira as well.
Judiciary branch is a part of Portuguese system of courts including the Constitutional Court, the Supreme Court of Justice, the Court of Auditors, the Supreme Administrative Court, and lower courts.

Economy

Madeira is a free trade zone with stable growing economy. It is one of the main offshore zones in the world with numerous tax incentives. The Free Zone of Madeira, also called the Madeira International Business Centre, being a tax-privileged economic area, provides an incentive for companies, offering them financial and tax advantages via a whole range of activities exercised in the Industrial Free Zone, the Off-Shore Financial Centre, the International Shipping Register organisation, and the International Service Centre.
At present, the island is the second richest region of Portugal after Lisbon. GDP of Madeira comprises 104% of European GDP.
GDP growth is provided by service sector, industrial sector (food and beverages production), construction, and tourism.

CORPORATE INFORMATION

Legal system

The Madeira (Portuguese) legal system is a civil law or continental legal system, based on Roman law. Portuguese law is mainly influenced by French law. EU law is now a major driving force in many respects, such as corporate law, administrative law and civil procedure.
Basic corporate Law of Madeira (Portugal) is found in the Commercial Code (1888, as amended).

Types of entity

Under Portuguese legislation, the following types of commercial entities may be established in Madeira to carry on business:
  • sole proprietor (Empresário em Nome Individual);
  • individual limited liability establishment (Estabelecimento Individual de Responsabilidade Limitada);
  • partnership company (Sociedade em Nome Coletivo);
  • limited partnership company (Sociedades em Comandita);
  • cooperative;
  • limited liability company (Sociedade por Quotas);
  • public limited company (Sociedade anônima);
  • branch of a foreign entity.

The most common type is limited labiality company (Lda.).

REGISTRATION

Company name

The usual company name format in Portugal is “Name – Business Activity, Extension”.
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, marketing and trading.
As regards the extension, a quota company must end its name with Lda. If the quota company has a single quota holder, then the name must end with “Unipessoal, Lda”.
Legislation was passed in September 1995 allowing the approval of foreign names for companies operating within the Madeira Free Trade Zone.
Company names which contain the following words and their equivalent require special consent or license:
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 .

Registration

Registration procedure of a company in Madeira includes the following steps:
  1. Name approval: A name approval certificate and a provisional identification card must be requested from the National Company Registrar (RNPC – Registo Nacional de Pessoas Colectivas). This request may also be made through the internet. The certificate will be valid for 180 days for registration purposes and for one year after the company incorporation.
  2. Company incorporation: Formation and registration of IBC companies must be requested to the Private Deeds Registry Office. The following documentation must be submitted to the notarial office upon the request: 1) Company name approval certificate; 2) Provisional company identification card; 3) Copy of the identification documents of the applicants: single person - identification and fiscal cards, collective person - certificate of the conservatory of the commercial registry, company identification card, initial public deed, identification and fiscal number of the company’s legal representative; 4) Report from the Official Account Auditor for capital shares entrances in goods; 5) License and Authorization from the Regional Secretary for Planning and Finance. IBC companies are exempt from fees and notarial costs.
  3. Declaration of beginning of activity: Companies must declare the beginning of activity at the local tax dependency. The following documentation must be submitted together with the declaration: 1) Specific form, available at the tax office, in triplicate and duly certified, with information regarding the official accountant responsible for the company’s books of accounts; 2) Provisional company identification card; 3) Copy of the public deed; 4) Copy of identification and fiscal cards of the shareholders and official accountants. Companies must submit the declaration before the beginning of the activity or within 90 days to the RNPC registration (date of issue of the provisional card).
  4. Commercial and RNPC registration, publication at the Official Journal (JORAM): To be submitted to the private conservatory of the commercial registry, until 90 days from the public deed, through the following documentation: 1) Company’s incorporation public deed; 2) Company name approval certificate; 3) Beginning of activity declaration. The official publication will be at JORAM, the Official Journal of the Autonomous Region of Madeira. Companies may also request the publication at a local newspaper.
  5. Social Security Registration: Companies must proceed with the registration at the Regional Social Security Centre within 30 days of the beginning of activity. The following documents must be presented: 1) Tax payer’s identification card; 2) Company’s incorporation public deed; 3) Company’s identification card; 4) Record of proceedings of the election of the members of the board and forms of income; 5) Copy of the fiscal card of the members of the board; 6) Fiscal document of beginning of activity.

The procedures for the incorporation of a Madeira company are the same, except that, to be established in the Madeira Free Zone it is required to get a license that can take 1 week to be issued, and electronic registration is not applicable in Madeira.

Areas of Business Activity

Business activities may be conducted in the following fields:
  • International services: Trading, consulting, technical and professional services, holding companies, telecommunications, e-commerce and other international services
  • Industrial Free Trade Zone: Industrial and warehousing activities in Madeira, provided they do not pose a risk to health and public order
  • International Ship Register (MAR): Shipping activities, registration of vessels, commercial and pleasure yachts.

Thanks to the advantages offered by the IBC, Madeira currently hosts a broad range of international companies, operating in diversified sectors, such as petroleum, pharmaceuticals, information technology, shipping and many others.

EU Integration

The International Business Centre of Madeira offers a special tax regime fully integrated within Portuguese and EU legislation:
  1. All activities undertaken within the IBC are subject to the same regulations and supervision applicable at national level;
  2. The IBC is a State aid programme, which has been approved by the EU and is subject to all its treaties and legislation;
  3. All principles of the EU Treaty apply to Madeira companies and their investors, allowing IBC operators to have unrestricted access to the internal European market without discrimination;
  4. The EU VAT system is fully applicable;
  5. Being part of the Eurozone, operations carried out within the scope of the IBC benefit from low operating costs, free movement of capital and elimination of foreign exchange risk.

Restriction of activity

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) and certain other activities without prior consent and licensing including:
  • Road Transport of Goods
  • Travel and Tourism Agencies
  • Real Estate Agents
  • Motor Vehicles for Hire Industry
  • Temporary Work Companies
  • Private Security
  • Nursery Schools
  • Vocational Training Schools
  • Driving Instruction Schools
  • Nursing Activities
  • Catering and Drinks Establishments
  • Veterinary Clinics Kindergartens
  • Day Centres
  • Home Support Services
  • Free-time Activity Centres
  • Homes for Children / the Disabled / the Elderly
  • Management of Sports Facilities

Local registered office

All businesses in Madeira are required to have a registered office. Post office boxes are not permitted. If the registered office is not indicated in the memorandum of association the same may be rendered null and void. The company may only possess one registered office, notwithstanding the fact that private domiciles may be indicated for certain business areas. Unless otherwise stated in the memorandum of association, management may relocate the company’s registered office within national territory.
VAT number; Name (certificate of admissibility); Directors information (copy of the identification document); Share capital (proof of the deposit of the share capital), Shareholders information (fiscal number and address) must be kept at the registered office of the business.

Seal

Under Portuguese law, a company is not required to have a corporate seal. The standard practice is to have a rubber stamp, but even this is becoming less common.

Bank Account

All transactions of companies in Madeira must be duly reported in one or more bank accounts exclusively assigned to the associated business activity. All transactions relating to capital contributions, loans or advance payments from shareholders must be made through such accounts. Other transactions from or to companies must also be made through these accounts.
Payment of invoices or similar documents greater than EUR 1,000 must be carried out by using payment methods that allow the recipient to be identified, namely by current account cheque or bank transfer.
Portuguese banks will always request a copy of the supporting documents for any transaction above EUR 12,500.

Redomicile

Portuguese legislation provides for redomiciliation of companies from and to Madeira as long as the law of said country allows such re-domiciliation. It is possible to transfer the head office of foreign companies to Madeira and vice-versa, even from and to tax havens. The taxation applicable to the redomiciliation to another EU or EEA Member State of a company residing in Portugal can be deferred, subject to certain conditions applied, identical to those that would normally be agreed, accepted and applied between independent entities in like-for-like operations.
To transfer to another country, the shareholders decision must be taken by at least 75% of the votes corresponding to the share capital.
To transfer to Portugal, the company must adapt its articles of association in order to comply with the Portuguese law. In order to re-domicile a company to Madeira, the following documents are requested:
  1. Certified copy of the respective country’s law that foresees the possibility of re-domiciling companies;
  2. Certified copy of the articles of association of the company;
  3. Certified copy of the certificate of registration of the company;
  4. Certified copy of the resolution of the shareholders of the company with the following decisions: a) to change its head-office to Madeira;
 b) to approve the new articles of association adapted to Portuguese law;
 c) to appoint the director(s).

All these documents should be legalized with the apostil of the Hague Convention.
Before preparing all these documents it is recommended that a first enquiry/pre-application is made in advance to the Portuguese authorities regarding the name approval of the company to be re-domiciled. Should the name not be approved in Portugal, then the above mentioned resolution must also mention that the company will adopt another name in Portugal.
Steps needed in order to complete the re-domiciliation:
  • 
To request the approval of the name and object of the company;
  • To apply for the licence for the company to operate within the scope of the International Business Centre of Madeira;
  • To register the company.

COMPANY STRUCTURE

Directors

In Portuguese companies at least one director is required. There are no legal restrictions on the nationality or place of residence of Portuguese company directors. But please note that each of them has to have or obtain a Portuguese taxpayer identification number and that non-EU/EEA entities must have a resident tax representative.
Corporate directors are permitted, but in this case an individual representative of the corporate director must be appointed and registered with the registry office.
It should be noted that under Portuguese law a company director can be personally jointly liable with the company in connection with any company's unpaid taxes and social security contributions that originated or became due during his/her term as a director. For this reason, the availability of nominee directors is very scarce, those available are relatively highly paid and as a rule will not issue general powers of attorney - only specific ones.
There are no requirements to meeting of Board of directors.
Names of directors do appear in public records.

Secretary

For Madeira limited companies, secretary is optional.

Shareholders

A Madeira limited company must have at least 2 shareholders or just one shareholder if a company with one shareholder is incorporated. There are no legal restrictions on the nationality or place of residence of the shareholders of a Portuguese company and they may be either individuals or corporate bodies. But please note that each of them has to have or obtain a Portuguese taxpayer identification number and that non-EU/EEA entities must have a resident tax representative.
Names of shareholders of Lda do appear on public records.
Shareholders must hold General Assembly annually to approve the annual financial statements within 3 months from the close of the fiscal year to which it relates. General Assembly should take place at the registered office in Madeira.

Beneficiary

Despite the fact that many jurisdictions are discussing an issue of introducing an open register of beneficiaries, there is no such a register yet, including Portugal. This means that beneficiaries’ details do not appear on a public profile. Generally, service providers including firm specializing in company formation, trust managers, lawyers, and accountants, keep beneficiaries’ information in strict confidentiality. It can only be disclosed to regulatory authorities (e.g. during examinations for its existence) or in compliance with a court order.

Share capital and shares

Since January 2011, there is no minimum capital required for Limited Liability Companies in Portugal. Partners must define a certain amount which is represented by “quotas” (shares), each one with a minimum value of € 2.00 and may assume different values. In the case of unipersonal company minimum value is €1.00.
Shares in a private company are usually transferred by a written agreement duly registered at the appropriate Registry Office.
Bearer shares and shares with no par value are not allowed.

TAXATION

General information

Since Madeira is part of Portugal, Portuguese tax principles apply here. A preferential treatment was established for companies registered before the end of 2020.

Personal income tax

Portuguese tax residents pay tax on their worldwide income and non-residents on income from sources in Portugal.
Non-residents are subject to 25% tax on their remuneration.
Income tax is paid at progressive rates:
  • Income up to EUR 7,112 – 14.5%
  • Income from EUR 7,112 to 10,732 – 23%
  • Income from EUR 10,732 to 20,322 – 28.5%
  • Income from EUR 20,322 to 25,075 – 35%
  • Income from EUR 25,075 to 36,967 – 37%
  • Income from EUR 36,967 to 80,882 – 45%
  • Income over EUR 80,882 – 48%

Taxpayers with an income of more than EUR 80,000 pay an additional solidarity tax at 2.5% to 5% rate.
Investment income is taxed at 28%, but there is an option to pay tax at progressive rates. If a bank account or investment is located in a jurisdiction blacklisted by Portugal as a “tax haven”, a higher tax rate of 35% applies.
Capital gains are generally taxed at the rate of 28%.
Fifty per cent of capital gains from the sale of real estate are included in the taxable income and taxed at progressive rates. There is a relief for the primary residence.
Non-residents are taxed at 28% rate on 100% of the profits from the disposal of Portuguese assets.
Individuals who have moved to Portugal are eligible for a special preferential tax regime, subject to certain conditions. Their remuneration for work in a number of industries can be taxed at the rate of 20%, and their foreign income is exempt from taxation.

Corporate income tax

Corporate income tax is paid on the company’s worldwide income.
There is an optional regime to exclude from the tax base the profits and losses allocated to foreign permanent establishments, subject to certain conditions.
The standard tax rate is 21%. The rate may be lower in some regions and for small businesses in relation to some part of the income.
There is a state surtax levied at rates from 3% to 9% on profits exceeding certain thresholds, as well as surtaxes of up to 1.5% at the level of municipalities. Some regions also charge a regional surtax.
In relation to some expenses (representation expenses, undocumented expenses and others), companies are required to pay tax calculated as a percentage of such expenses.
Dividends received are exempt from tax if the conditions for the substantial participation exemption are met: the participation interest is at least 10%, the holding period is at least 1 year, the company is not from a "blacklisted” country and is subject to corporate income tax specified in the EU Parent-Subsidiary Directive or at a rate not lower than 60% of the Portuguese rate, and some other conditions.
Capital gains are generally taxed at regular tax rates.
Profit from the sale of shares may be tax exempt if the conditions for the substantial participation exemption are met: the participation interest is at least 10%, the holding period is at least 1 year, the company is not from a "blacklisted” country and some other conditions.

CFC rules

A foreign company is considered a controlled foreign company if a resident owns, directly or indirectly, at least 25% of its capital, voting rights, or rights to its profits and assets, and the company's profit is taxed at a rate below half of the Portuguese corporate income tax rate, or the company is from a blacklisted jurisdiction.
CFC rules may not apply to EU or EEA companies if a company is established for real economic purposes and conducts the relevant business.
Nor should CFC rules apply if the company's passive income does not exceed 25%. Passive income includes not only interest, dividends, profits from the sale of securities, etc., but also profits from trading with related parties.

Withholding tax

Withholding tax on dividends and interest is 25%.
The rate rises to 35% if the recipient is from a blacklisted country. Dividends can generally be exempt from tax if the recipient is from a DTT (double tax treaty) country or from an EU or EEA member state, is taxed in the country of residence at a rate not less than 60% of the Portuguese rate and has held at least 10% of the Portuguese company’s shares for at least a year.
Royalties are subject to 25% withholding tax.
The tax may be withheld on certain other income payments.
Withholding taxes are reducible under the applicable double tax treaties and EU directives.

VAT

The standard VAT rate is 23%.
Reduced rates of 13% and 6% apply to some goods and services.

Social security contributions

Social security contributions, including contributions to cover pension, family, and unemployment benefits, are paid by employees at the rate of 11% and by employers at the rate of 23.75% of the employee’s remuneration.
Employers must also purchase insurance against occupational accidents; the premiums vary by industry.

Municipal property tax

The annual property tax is generally levied at the rate of 0.8% in rural areas and at the rates from 0.3% to 0.45% in urban areas.
There is also an additional municipal property tax on land for development and residential property.
The rates vary depending on the category of the owner and the value of the property.

Property transfer tax

When transferring real estate located in Portugal, a municipal tax is levied at rates of up to 6.5% for urban real estate, 5% for rural real estate, and 10% if the buyer is a company from a blacklisted country.

Stamp duty

Stamp duties are payable on various transactions and documents.
The rates vary greatly depending on the transaction.

Exchange control

Portugal has no exchange control.

Double tax agreements

Portugal has tax treaties with 94 countries:
81 DTCS: Algeria, Angola, Andorra, Austria, Bahrain, Barbados, Belgium, Brazil, Bulgaria, Canada, Cape Verde, Chile, China, Colombia, Croatia, Cuba, Cyprus, Czech Republic, Cote d'Ivoire, Denmark, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Guinea-Bissau, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Korea (Republic of), Kuwait, Latvia, Lithuania, Luxembourg, Macao (China), Malta, Mexico, Moldova, Montenegro, Morocco, Mozambique, Netherlands, Nigeria, Norway, Pakistan, Panama, Peru, Poland, Oman, Qatar, Romania, Russian Federation, San Marino, Saudi Arabia, Senegal, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Sao Tome and Principe, Timor-Leste, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, Vietnam.
11 TIEA: Andorra, Antigua and Barbuda, Bermuda, British Virgin Islands, Cayman, Islands, Gibraltar, Liberia, St. Kitts and Nevis, St. Lucia, Turks and Caicos.

ACCOUNTS

Financial statements

Every Portuguese company is required to prepare annual financial statements which must be approved by the general meeting of members within 3 months of the financial year-end. Publication of financial statements is not mandatory, but they must be filed electronically by the end of June. Filing is done by an accountant.
Financial statements must be prepared in accordance with Portuguese Chart of Accounts. They should include a balance sheet, income statements, a cash flow statement, etc.
Financial statements are publicly accessible.

Audit

Limited liability companies are generally exempt from audit of their financial statements. However, if a company exceeds two of the following three thresholds during two consecutive years, it must appoint a registered auditor (“Revisor Oficial de Contas”) for the purpose of auditing the financials:
  • Amount of income: EUR 3 million;
  • Net assets: EUR 1.5 million;
  • Number of employees: 50.

Annual Return

As Russian law does not have an equivalent of the Annual Return, we think it appropriate to explain this concept. The Annual Return is a summary of the company’s current structure prepared annually by the company secretary. It usually includes:
  • incorporation information (date of registration, registered office);
  • details of the directors and their resignations;
  • details of the secretaries and their resignations;
  • details of the authorized capital, par value of shares, and number of shares issued;
  • details of the shareholders and share transfers.

Portugal does not have a requirement to file an Annual Return.

Tax returns

The tax year corresponds to the calendar year. There may be exceptions in some cases.
Corporate income tax returns are filed electronically by the end of May of the year following the reporting year.
Three advance tax payments are made during the year. The final payment is due upon filing the annual tax return.

INVESTMENT VISA

Investment and a Residence Permit

The Portuguese authorities, through Law n. 29/2012, of August 9th approved the legal regime through which it is now possible for Non-EU nationals to obtain a residence permit for the development of an investment activity in Portugal. Non-EU country nationals can apply for a residence permit in Portugal for the purposes of carrying out an investment activity provided the legally required criteria are met. In order to obtain the Investment Visa, Non-EU nationals must:
  • hold a valid Schengen visa when entering Portugal;
  • formalize their stay in Portugal within 90 days counting from the date of the first entry (by applying for the “investment visa”);
  • carry out an “investment activity”.

The approved Law defines as an “Investment activity” any activity carried out by a Non-EU country national, personally or through a company, that leads to the fulfillment of at least one (1) of the following conditions in Portuguese territory:
  1. Capital transfer of at least €1M; or
  2. Creation of, at least, 10 jobs; or
  3. Acquisition of (1 or more) real estate with a value of at least €500k.

Such investment activity must last at least 5 years.

Renewal of the Residence Permit

The requirements of the Ministry of State for Foreign Affairs and Ministry of the Interior confirms that the applicants/investors, for the purposes of renewing their residence permits, should prove they have met the following minimum periods of stay in Portugal:
  • 7 days in the first year and;
  • 14 days in the subsequent periods of two years (again 7 days per year).

After a period of 6 years legally residing in Portugal it is legally permitted for individuals to apply for the Portuguese citizenship further being granted with a Portuguese Passport. There is, however, a requirement to have sufficient knowledge of the Portuguese language.

Combining Investment Visa with NHR –Non Habitual Residents

There is therefore the possibility for a Non-EU country national to simultaneously apply for the NHR and the Investment regime.
The NHR status can be granted to individuals, who become resident for tax purposes in Portugal, provided they have not been residents in Portugal for the previous five years. NHR individuals may enjoy such status for a ten-year period, after which they will be taxed under the standard personal income tax rules in Portugal regime.
Under the NHR regime, income deriving from employment or independent personal services of a domestic source or from a foreign source, if not exempt, will be taxed at a special 20% flat rate. Employment income not originated in Portuguese territory will be exempt from personal income tax in Portugal, if the source country taxes the relevant income under the terms of a Tax Treaty celebrated by Portugal with said country, or, should there be no tax treaty in place, if the income is taxed in the other country and the income is not considered to be obtained in Portugal.
Pensions enjoy a ten-year exemption if taxed by the source state under existing tax treaty, or, if there is no treaty, there does not exist any connection of the income with the Portuguese territory under the rules for the personal income tax rules in Portugal.
The passive income received by NHR’s will be exempt from personal income tax in Portugal, although it may be taxed in the Origin State under the rules of a tax treaty entered into by Portugal. If no treaty exists, such income:
  • may be taxed in the source State; and
  • will not be taxed if not considered to arise from a Portuguese source; and
  • will not be taxed if the source State, region or territory is not included in the Portuguese tax havens’ black list.

The regime requires only that there is potential taxation in the source State, therefore no effective taxation is required. The passive income included in this regime comprises interest, dividends, capital gains, other income from capital, income from immovable property and pensions. Example: individual granted with the NHR regime that receives interest from a bank in UK will be subject to the following tax treatment:
  • Interest won’t be taxed in the UK as he is a (non-habitual) resident of Portugal;
  • As there is a Tax Treaty in place between the UK and Portugal such income will be exempt in Portugal.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes civil law 79 Yes No

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Commercial Companies Act commercial companies
Corporate Income Tax Code corporate tax
Personal Income Tax Code personal tax
Decree-Law n.313/93 prevention of the use of the financial system for the purpose of money laundering
Decree-Law No. 500/80 creation of a free trade zone in Madeira
Regulatory Decree No. 53/82 operations in Madeira
Act n. 29/2012 residence permit
Regional Regulative Decree no. 21/87/M industrial, commercial and service activities, integrated within the scope of Madeira’s Free Zone
Decree-Law no. 212/94 constitution and permanence of companies licensed to operate in the Madeira Free Zone
Decree-Law no. 250/97 registration and publication the revocation and forfeiture of licenses granted to entities operating in the Madeira Free Zone
Decree-Law no. 352-A/88 уestablishment and operation of companies or branches of offshore trusts in the Madeira Free Zone
Decree-Law no. 149/94 incorporation of fiduciary management instruments (trusts)
Ordinance of the Autonomous Region of Madeira no. 222/99 tax rates for entities licensed to operate within the institutional framework of the International Business Centre of Madeira
Decree-Law no. 96/89 establishment of the International Shipping Register of Madeira
Ordinance no. 715/89 International Shipping Register of Madeira
Decree-Law no. 192/2003 recreational crafts registered or to be registered in the International Shipping Register of Madeira
Ordinance no. 134/92 tax rates for merchant ships registered in the International Shipping Register of Madeira
Ordinance no. 135/94 applicable taxes for recreational crafts registered under the International Shipping Register of Madeira
Tax treaties entered Algeria, Andorra, Austria, Bahrain, Barbados, Belgium, Brazil, Bulgaria, Canada, Cape Verde, Chile, China, Colombia, Croatia, Cuba, Cyprus, Czech Republic, Côte d'Ivoire, Denmark, Estonia, Ethiopia, Finland, France, Germany, Greece, Guinea-Bissau, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Kazakhstan, South Korea, Kuwait, Latvia, Lithuania, Luxembourg, Macao, Malta, Mexico, Moldova, Montenegro, Morocco, Mozambique, Netherlands, Norway, Pakistan, Panama, Peru, Poland, Qatar, Romania, Russia, San Marino, Saudi Arabia, Senegal, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, São Tomé and Príncipe, Timor-Leste, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, Viet nam
Tax Exchange Information Agreement (TEIA) Andorra, Anguilla, Antigua and Barbuda, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Gibraltar, Guernsey, Isle of Man, Jersey, Liberia, Saint Kitts and Nevis, Saint Lucia, Turks and Caicos Islands
List of state regulatory authorities
Madeira Regional Government https://www.madeira.gov.pt/
International Business Center of Madeira https://www.ibc-madeira.com/en/
Ministry of Finance https://www.portugal.gov.pt/pt/gc21/area-de-governo/financas
Portuguese Business Portal https://bde.portaldocidadao.pt/evo/LandingPage.aspx
Portugal Trade & Investment Agency http://www.portugalglobal.pt/EN/InvestInPortugal/Pages/index.aspx
Portuguese Tax administration http://www.portaldasfinancas.gov.pt/at/html/index.html
Portuguese Tourism Board http://www.turismodeportugal.pt/english/TurismodeportugalIP/Pages/TurismodePortugalIP.aspx
Portuguese Chamber of Chartered Accountants https://www.occ.pt/en/institution
Banco de Portigal https://www.bportugal.pt/

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