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BACKGROUND
Geographical Location
The Madeira archipelago is made up of the islands of Madeira, Porto Santo, Deserta and Selvageno. The name
of the group islands is taken from the largest island Madeira.The Madeiran landmass encompasses approximately 300
square miles and is located in the Atlantic Ocean 625 miles from mainland Portugal and 545 miles from North Africa.
Population
The population is approximately 266,500 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
Madeiran Regional Parliament is an elected body which legislates on Madeiran interests such as the budget and its
responsibilities are also defined in the constitution. The Madeiran Government cannot however, overrule decisions
made by the Central Government in Lisbon nor over-ride political unity with Portugal.
Infrastructure and Economy
Communications are good, there are six daily flights to and from Lisbon, the Portuguese capital which 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, but English is taught in schools and is therefore used widely 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)
KEY FEATURES TABLE
| General |
| Political Stability |
Good |
| British Based Legal System |
No |
| Type of Company |
Exempt LDA |
| Disclosure of Beneficial Owner |
No |
| Migration of Domicile Permitted |
No |
| Tax on Offshore Profits |
Nil |
| Non-English Language Names Allowed |
Yes |
| Corporate Requirements |
| Minimum Number of Shareholders |
Two |
| Minimum Number of Directors |
Two |
| Bearer Shares Allowed |
No |
| Corporate Directors Permitted |
No |
| Secretary Required |
Yes |
| Standard Authorised Share Capital |
Esc 400,000 |
| Local Requirements |
| Registered Office/Agent |
Yes |
| Company Secretary |
Yes |
| Local Directors |
No |
| Local Meetings |
No |
| Government Register of Directors |
Yes |
| Government Register of Shareholders |
Yes |
| Annual Requirements |
| Annual Return |
Yes |
| Audited Accounts |
Yes |
| Recurring Government Costs |
| Annual Tax/Licence Fee |
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| Annual Return Filing Fee |
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COMPANY FORMATION
Type of Company for International Trading
Sociedade por Quotas - Limitada (Lda) or Sociedade Anonima (S.A.)
In 1993, Portuguese Legislation allowed the incorporation of LDA.'s or S.A.'s with one sole quota/share holder
for companies operating within the Madeira Free Trade Zone - so called "Sociedada Unipessoal" - unipersonal
companies.
Portuguese Legislation also foresees the incorporation of a pure holding company called SGPS (Sociedade Gestora
de Participacoes Sociais).
Procedure to Incorporate
Name approval, Obtain Licence to operate within the Madeira Free Trade Zone, Capital Deposit, Public Deed before
Notary Public, Registration at Commercial Registry.
Restrictions on Trading
No, but restricted to objects clause. Also please note that financial entities are subject to licensing and
supervision by the Bank of Portugal.
Powers of Company
A Company incorporated in Madeira has the same powers as a natural person.
Language of legislation and corporate documents
Portuguese, but translations can be provided.
Shelf Companies available
Yes
Time Scale to Incorporate
6 - 8 weeks
Name Restrictions
Yes, has to include reference to Objects Clauses.
Language of Name
The name of a company operating within the Maderian Free Trade Zone does not have to be in Portuguese, but
must make reference to the Company's main object clause. Legislation was passed in September 1995 allowing the
approval of foreign names for companies operating within the Maderian Free Trade Zone.
Names requiring Consent or a Licence
None, unless they refer to a restricted activity, i.e. financial, insurance, etc.
Suffixes to denote Limited Liability
Lda or S.A.
Disclosure of Beneficial Ownership to Authorities
None
SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS
Authorised Share Capital
PTE 400,000 minimum authorised and issued for LDA.
PTE 5,000,000 minimum authorised and issued for S.A.
Classes of Shares Permitted
Lda - Quotas - Registered only. No share certificates are possible. S.A. can issue shares with voting rights
and/or profit rights in either Registered or Bearer form. Unipersonal Companies cannot issue Bearer Shares.
Bearer Shares Permitted
In S.A.s only
Taxation
Exempt from tax on income obtained from activities carried on outside of Portugal until the year 2011. Specific
taxation is foreseen for pure holdings companies - SGPS. These are taxed on EU dividends at an effective rate of
1.8% (36% 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 benefit from the Double Taxation Treaties signed by Portugal. Currently, Portugal has signed
Double Taxation Treaties with the following countries:
- Austria
- Belgium
- Brazil
- Bulgaria
- Finland
- France
- Germany
- Ireland
- Italy
- Mozambique
- Norway
- Spain
- Switzerland
- The United Kingdom
Licence Fees
US$750.00 Application Fee and US$1,500.00 Annual fee. Both are reduced by 1/3rd to US$500.00 and US$1,000 respectively
for companies represented by licensed management companies.
Financial Statement Requirements
The accounts of a Maderian company must be prepared in the Portuguese Language and made according to Portuguese
accounting rules. The Fiscal year ends on 31st December annually, and the accounts regarding that year must be
approval by the shareholders before the 31st March of the following year. The relative tax form must be filed with
the Authorities prior to the end of May.
STRUCTURE OF MANAGEMENT
DIRECTORS
Minimum number of Directors
One for Lda and S.A. However, if the S.A. share capital exceeds 20 million Escudoes, a minimum of three is
required.
COMPANY SECRETARY
Company Secretary Required
Only for S.A.s when a Board of Directors is appointed.
SHAREHOLDERS
Minimum number of Shareholders
Lda - 2. S.A. is five, but both are allowed with one shareholder as long as they are incorporated as a "Sociedade
Unipessoal" and includes this phrase in the company name.
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