News: Registration of Company in Madeira-LDA

Company registration in Madeira

Madeira enjoys a high level of confidence among the world's largest economic centers. Registration of a company in its territory allows obtaining the status of the Portuguese corporation. The foregoing entails a lot of tax benefits, which attracts foreign investors.

Advantages of the company in Madeira

Offshore in Madeira is notable for high level of protection of personal data and loyal tax policy. Corporations, trading companies and holdings of this jurisdiction receive the most favourable taxation conditions, which allows them to invest more in business development.

A company registered within the jurisdiction of Madeira allows its owners to participate in the international free trade area (FTZ) (exempt from taxes on income and capital gains).

The cost of modern telecommunications systems in Madeira, real estate and utilities is optimal for any business.

Madeira, compared to other jurisdictions in Europe, has a much more affordable cost of living.

Company registration

The main corporate law in Madeira is the Code of Portuguese Companies (Codigo das Sociedades Comerciais). Specified powers and objects of the company must be fixed in the Charter. Corporate documentation should be maintained in Portuguese, but translations are acceptable. The procedures for incorporation are simplified as much as possible, so its process can take no more than 3-4 days.

Registration is carried out in several stages:

• selection and approval of a unique name;
• opening of a corporate bank account and contribution of minimum authorized capital;
• provision of the required package of documents for registration;
• receipt of an extract from the Commercial Register;
• assignment of tax number;
• registration  in the regional center of social security and insurance;
• publication of the Charter in the local press.

Populartypes of companies to be registered

For international investors, the most profitable companies are those of two types:

1. Sociedade Anónima, S.A. - public joint-stock company. The required number of shareholders is 5, the authorized capital should be 50,000 euros and more. Bearer shares and registered shares are available, and registered office is required;
2. Sociedade por Quotas, Lda. - responsibility of shareholders is directly proportional to the amount of their contributions. Minimum authorized capital is from 1 euro (for financial and insurance sectors - from 5,000 euros). Registeredshares are allowed, 1 director and 2 shareholders are required, and registered corporate office is necessary.

The director of an offshore company can only be an individual, and residency does not matter.

Certain companies are required to employ a public auditor if:

1. their annual balance exceeds 900,000;
2. turnover and profit in the aggregate equal to or exceed 2 000 000 euros;
3. number of employees exceeds 50 people.

Trade and economic activities are subject to the following restrictions:

• it is forbidden to conduct business contrary to the current legislation of Portugal;
• it is prohibited to work in the banking, insurance or stock exchange spheres without licensing.

Offshore companies are not subject to income tax, and corporate tax ranges from 1% to 3%. The VAT rate is 12%.

Reporting on corporate activities should be provided to the relevant services by May 31 of each year.

If you have any additional questions about registering a company in Madeira, please contact the lawyers of Law&Trust International for legal advice.