Background:

Madeira is located in the Atlantic Ocean and is 625 miles from mainland Portugal and 545 miles from North Africa. Madeira was discovered and colonised by the Portuguese in 1419 and in 1976 it was granted partial political autonomy. Being a region of Portugal it enjoys the benefits of full membership of the European Community and enjoys the benefits of a considerable number of Double Taxation Treaties Portugal has with other countries. Although Madeira cannot be termed as a "tax haven" it has certain fiscal benefits in that local companies are licensed within the International Free Trade Zone.

It takes about three or four weeks to incorporate a company in this jurisdiction. The incorporation procedure is quite complex.

Type of Company(s):

There are two types of company, the Limitada (Lda) and Sociedade Anonima (S.A.). All company names should be in Portuguese unless the name of the owner of the company is used. The company should also reflect the purpose for which the company has been incorporated, that is, the business which it will be carrying out. The name must end with either the words Limitada or Societe Anonima.
 
The Lda and SA:

The Lda must have a minimum paid up capital  of ESC400,000. The capital is subscribed to in quotas instead of shares and the minimum number of subscribers (quotaholders) is two.  The minimum value of each quota is ESC20,000.  Lda's do not require a full audit and accounts do not have to be filed with the Public Registry and are therefore not available for inspection to the public.

The SA requires a share capital of ESC5,000,000 of which 30% must be paid up on incorporation and the remainder within 5 years of  the incorporation date. An SA can issue bearer shares. Contrary to the Lda, the SA must file audited accounts annually with the Tax Authorities and Public Registry.

Both companies can have a minimum of one director, however, if the share capital of an SA exceeds ESC20,000,000 it must have a minimum number of three directors. The directors do not have to be Madeiran or Portuguese residents, however, corporate directors are not allowed.

Registered Office:
The Registered Office of both types of company must be in Madeira and an Annual General Meeting must be held at the Registered Office. Proxies, however, can be appointed.

The names of the directors and quotaholders/shareholders appears on the Certificate of Incorporation. To secure anonymity local nominees should be appointed.

Taxation:
Until the year 2011, companies registered within the Free Trade Zone are not liable to corporate gains, capital gains or inheritance taxes. To operate within the Free Trade Zone an annual licence fee of US$1000 is payable.


Summary Benefits:

• Exemption from domestic Madeiran and Portuguese taxes until 2011
  

• Exemption from exchange control
  

• Full member of the European Community
  

• An extensive double taxation treaty structure
  

• Non disclosure of beneficial ownership
  

• Well developed economically