Registration of Company on Madeira-SA

Company registration in Madeira

The island of Madeira is an autonomous Portuguese territory. The archipelago of volcanic origin was discovered more than five hundred years ago. Nowadays Madeira is governed by its own government and controls the territory of 770 km2. The population of the island is approximately 270 thousand people.

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

In Madeira, you can enjoy summer heat all year round. The proximity of the Gulf Stream determines the nature of the climate there. Naturally, one of the leading sectors of the economy of Madeira is tourism, attracting connoisseurs of rather expensive luxury leisure to the island.

Blooming gardens and variety of flora make Madeira truly paradise for guests from the most remote parts of the world.

Besides tourists, Madeira represents growing interest for international investors. Many entrepreneurs are tending to register or buy company in Madeira today.

Forms of doing business in Madeira

Given significantly wide range of forms of companies in Madeira, the most effective from a practical standpoint is the registration of companies with limited liability in Madeira. This type of company is most popular among foreign investors.

It is possible to register limited liability company in Madeira in two forms:

• Public joint-stock company (SA);
• Private joint-stock company (LDA).

The legislative framework in Madeira

The main legislative act regulating registration and activities of business in Madeira is the "Company Act in Portugal".

SA company registration in Madeira - Main provisions

• At least 5 shareholders, either natural persons or legal entities, are required for the establishment. The residency does not matter;
• Minimum amount of the authorized capital shall be equal to € 50 000;
• By the moment of registration, 30% of the abovementioned amount should be paid. Not more than within the subsequent 5 years, it is necessary to pay the remaining 70%;
• Issue of registered and bearer shares is permitted. The latter should be paid in full. It is possible to re-issue shares (from registered to bearer shares and vice versa) in accordance with the norms of Portuguese legislation and the company's charter. Shares can be ordinary and privileged. The privileged shares can be:

- without the right to vote, but with the right to receive dividends (from 5% of the par value of shares). Issue of 50% and not more than such shares is allowed.

- fully paid and subject to redemption by the company after the expiry of specified period.

• The Board of Directors shall manage the company.
• The company should form reserve fund, the amount of which is 20% of the authorized capital. Before the final formation of the fund, at least 5% of the company's annual income shall be deducted to the fund.
• The company registrar in Madeira provides official approval of the company's charter and prospectus.

LDA company registration in Madeira - Main peculiarities

• It is necessary to have 1 or 2 shareholders (natural persons or legal entities, residents of any country) for the establishment;
• The amount of minimum capital is not set, but each equity position (share) shall have minimum value of 2 EUR;
• Only registered shares can be issued;
• Even one director can manage the company.

Regardless of selected form of the company in Madeira, the business owner should undergo standard procedure:

- compile application for the Registrar of Companies for the purpose of obtaining permission to use the company name;

- preliminary contribute minimum capital to the local bank account;

- register the enterprise with the tax authorities, and it is necessary to notify the Financial Department concerning obtaining the taxpayer's card;

- register the company with the Social Security Administration;

- If non-residents of Madeira are employed at the enterprise, the application regarding registration of employment agreements (contracts)  shall be submitted to the Ministry of Employment;

- register with the Commercial Register of the region in which the enterprise is located;

- publish the contents of the company's Charter in the local newspaper;

- books of minutes and accounting books should be registered in the Commercial Register and tax authorities.

Information about directors and shareholders of the company in Madeira is publicly available. There are no requirements regarding the place of storage of the company’s documents.

Taxes in Madeira

The tax rate for all the enterprises in Madeira is uniform and equals to 27.5%.

Miscellaneous taxes include the following:

• VAT (12%);
• On dividends (25%);
• On interest (20%);
• On royalties or license fee (15%);
• On payouts on winnings (ranges from 23% to 35%);
• On income from rentals (15%);
• On payment for consulting and management services (15%).

Taxes are paid quarterly by advance payments.

Bookkeeping in Madeira

• Enterprises are required to submit annual audit report;
• It is also necessary to maintain accounting records;
• The appointment of state auditor is mandatory for the enterprise which has met two of the following conditions within 2 years after registration:
  - The annual balance equals to € 900,000 and more;
  - In combination with other incomes, the annual turnover is € 2,000,000 and more;
  - The average number of employees is at least 50 people for the year.

Do You need to quickly register or buy company or business in Madeira? We will gladly help! Registration of company in Madeira is the best way to start your own international business in Madeira.

We will register any organizational and legal forms of business (such as trusts, companies, holdings, etc.) for you within the shortest time possible and anywhere in the world.