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Company registration in Madeira Advocate Cyprus CYWORLD WEALTH

Company registration in Madeira

Madeira Island is an autonomous Portuguese territory. The volcanic archipelago was discovered more than five hundred years ago. Madeira is currently run by its own government and controls an area of ​​770 km2. The population of the island is about 270 thousand people.

Madeira is located 1000 km south of Portugal. The official language on the island is Portuguese.
The capital is Funchal.

Apart from tourists, Madeira is interesting for international investors. Many entrepreneurs today are looking to register or buy a company in Madeira.

What are the forms of doing business in Madeira?
Given the significantly wide range of forms of companies in Madeira, the most efficient from a practical point of view is the registration of limited liability companies. This type of company is most popular with foreign investors.

There are two ways to register a limited liability company in Madeira:

  • Public Joint Stock Company (SA).
  • Private Joint Stock Company (LDA).

The main piece of legislation governing the registration and operation of a business in Madeira is the Portuguese Companies Act.

What are the main features of company registration in Madeira?

  • The creation requires at least 5 shareholders, individuals or legal entities.
  • The place of residence does not matter.
  • The minimum share capital is EUR 50,000.
  • By the time of registration, you must pay 30% of the indicated amount. Not more than within the next 5 years, the remaining 70% must be paid.
  • Issue of registered and bearer shares is allowed. The latter must be paid in full. Re-issue of shares is possible (from registered to bearer shares and vice versa) in accordance with the rules of Portuguese law and the company’s charter. Shares can be ordinary and preferred.
  • The board of directors manages the company.
  • The company needs to form a reserve fund, the size of which is 20% of the authorized capital. Before the final formation of the fund, at least 5% of the company’s annual income must be transferred to the fund.
  • The Madeira company registrar officially approves the charter and prospectus of the company.

What are the taxes in Madeira?

The tax rate for all Madeira businesses is the same at 27.5%.

Other taxes include the following:

  • VAT (12%).
  • Dividends (25%).
  • Interest (20%).
  • Royalty or license fees (15%).
  • Payments on winnings (from 23% to 35%).
  • Based on rental income (15%).
  • Payment for consulting and management services (15%).
  • Taxes are paid quarterly in advance payments.

What are the features of keeping an accounting report in Madeira?

  • Enterprises are required to submit an annual audit report.
  • It is also necessary to keep accounting records.

The appointment of a public auditor is mandatory for an enterprise that has fulfilled two of the following conditions within 2 years after registration:

  • The annual balance is 900,000 euros or more.
  • Together with other income, the annual turnover is 2,000,000 euros or more.
  • The average number of employees is at least 50 people per year.

The above is for informative purposes only.  Further professional advice should be sought for each particular case. Our firm does not accept any responsibility for any loss or damage occurring by acting on the basis of this information.