Madeira

CORPORATE FEATURES

GENERAL
Type of Company
Limitada
SA
Political Stability
Good
Common or Civil Law
Civil
Disclosure of Beneficial Owner
No
Migration of Domicile Permitted
Yes
Tax on Offshore Profits
Nil
Language of Name
Latin Alphabet
CORPORATE REQUIREMENTS
Minimum Number of Shareholders

Two

Five
Minimum Number of Directors
One
One
Bearer Shares Allowed
No
Yes
Corporate Directors Permitted
No
Yes
Company Secretary Required
No
No
Standard Authorised Share Capital
Euro 5,000
Euro 50,000
LOCAL REQUIREMENTS
Registered Office/Agent
Yes
Yes
Company Secretary
No
No
Local Directors
No
No
Local Meetings
No
No
Government Register of Directors
Yes
Yes
Government Register of Shareholders
Yes
Yes
ANNUAL REQUIREMENTS
Annual Return
No
No
Submit Accounts
Yes
Yes
RECURRING GOVERNMENT COSTS
Minimum Annual Tax/Licence Fee
US$ 1,000
Annual Return Filing Fee
Nil
Nil

GENERAL INFORMATION:

The Madeira archipelago is made up of the Islands of Madeira, Porto Santo, Desertas and Selvagens. The name of the group islands is taken from the largest island Madeira. The Madeira landmass encompasses approximately 770 sq. km and is located in the Atlantic Ocean, 1,000 km from mainland Portugal and 870 km from North Africa. The topography is mountainous and the highest point is 1,862 metres. The scenery is spectacular and the vegetation diverse.

POPULATION

The population is approximately 265,000 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 Madeira Regional Parliament is an elected body, which legislates on Madeira interests such as the budget, and its responsibilities are defined in the constitution. The Madeira Government cannot however, overrule decisions made by the Central Government in Lisbon nor override political unity with Portugal.

INFRASTRUCTURE AND ECONOMY

Communications are good; there are six daily flights to and from Lisbon, the Portuguese capital, and Lisbon Airport 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, English is taught in schools and is used daily 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).

TYPE OF COMPANY FOR INTERNATIONAL TRADING

Sociedade por Quotas - Limitada (Lda s) or Sociedade Anónima (SA).

In 1993, Portuguese legislation allowed the incorporation of Lda's or SA's with one sole quota/share holder for companies operating within the Madeira Free Trade Zone - so called "Sociedade Unipessoal" - Single Member companies.

Portuguese legislation provides for the incorporation of a pure holding company called SGPS (Sociedade Gestora de Participacoes Sociais).

PROCEDURE TO INCORPORATE

Once name approval has been obtained and a Licence obtained for the proposed entity to operate within the Madeira Free Trade Zone, a Public Deed is executed before a Notary Public. The Public Deed is then registered at Commercial Registry of Madeira..

RESTRICTIONS ON TRADING

A Madeira company cannot undertake any business that is not specified in its constitution.

A Madeira Company cannot undertake the business of Banking, Insurance, Assurance, Reinsurance, Fund Management and Asset Management (other than its own assets) without prior consent and licensing.

POWERS OF COMPANY

The powers and objects of a Madeira Company are contained within its constitution and have to be specific.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS

Portuguese, but translations can be provided.

REGISTERED OFFICE REQUIRED

Yes, must be maintained in Madeira.

SHELF COMPANIES AVAILABLE

Yes.

TIME TO INCORPORATE

60 working days.

NAME RESTRICTIONS

A name that is similar to or identical to an existing company. A name that in the opinion of the Registrar may be considered undesirable or offensive. A name that may imply an illegal activity. A name that may imply government patronage.

All Madeira companies must include words to describe clearly the objects of the company, e.g. consulting, engineering, marketing and trading..

LANGUAGE OF NAME

Legislation was passed in September 1995 allowing the approval of foreign names for companies operating within the Madeira Free Trade Zone. A company name must refer to a company's main object clause.

SUFFIXES TO DENOTE LIMITED LIABILITY

Limitada (Lda).

Sociedade Anónima (SA).

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES

None.

COMPLIANCE:

AUTHORISED AND ISSUED SHARE CAPITAL

Esc. 1 million minimum authorised and issued for Lda.

Esc. 10 million minimum authorised and issued for SA.

CLASSES OF SHARES PERMITTED

Madeira Limitada (Lda) Companies do not issue shares. Instead quotas are registered at the Commercial Registry of Madeira and members are issued with notarised extracts from the Commercial Registry of Madeira to record their ownership.

Madeira Sociedade Anónima (SA) companies may issue either registered or bearer shares with voting or non-voting rights.

Madeira Sociedade Unipessoal (Single Member) SA companies must issue registered shares with voting or non-voting rights, but may not issue bearer shares.

BEARER SHARES PERMITTED

SA companies only.

TAXATION

All Madeira companies are exempt from tax on income obtained from activities carried on outside of Portugal until 31 December 2011. Nominal taxation is levied on pure holding companies (SGPS). These are taxed on EU dividends at an effective rate of 1.7% (34% 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 in most cases benefit from the double tax treaties signed by Portugal.

Portugal has signed double tax agreements with the following countries: Austria, Belgium, Bulgaria, Brazil, Czech Republic, Finland, France, Germany, Hungary, Ireland, Italy, Mozambique, Norway, Poland, Republic of Korea, Spain, Switzerland, United Kingdom and Venezuela. Negotiations are nearing completion with other countries.

LICENCE FEES

US$ 750 Application Fee and US$ 1,500 Annual fee. Both are reduced by 1/3rd to US$ 500 and US$ 1,000 respectively for companies represented by licensed management companies.

FINANCIAL STATEMENTS REQUIRED

The accounts of a Madeira company must be prepared in the Portuguese language in accordance with Portuguese accounting rules. Normally the fiscal year ends on 31st December, and accounts must be approved by the shareholders before the 31st March of the following year. A tax form must be filed with the authorities before the end of May.

DIRECTORS

It is normal to appoint two directors to a Limitada and three to a SA. The directors must be natural persons of any nationality and need not be resident in Madeira.

SHAREHOLDERS

The minimum number of shareholders for a Lda company is two, and five for a SA company. SA companies must have an odd number of directors*. Companies incorporated as a "Sociedade Unipessoal" may have one shareholder