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  Professional offshore incorporations and offshore banking services since 1996

 

Company Incorporation
Madeira

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The fees for  incorporation services of a Madeira Limited Company:
$4,700
include:

Incorporation Fee: $2900 Include:

- all outgoing charges and out-of pocket expenses (i.e. fax, courier charges, etc.).
- Prepared General Power of Attorney with minutes and resolution which will appoint you to be the lawful Representative Agent of the Company and which will allow you to act for the Company in all matters, including opening and operating bank accounts.

Registered Office/Agent: $800 p.a. 
Government Licence: $1,000 p.a.
Initial capital of PTE400,000 that is approx. US$2,100 which need to paid -in
.
   Once the share certificates are issued and the company active, these funds remain blocked with Madeira authorities

Total First Year: $4700 + (paid-in capital of $2100)

Annual Maintenance After First Year:
Registered Office/Agent: $800 p.a. 
Government Licence: $1000 p.a.
Total: $1800

Optional Services:
Nominee Corporate Director  (one) $300 p.a.
We to act as the fiscal agent for the company and being responsible for V.A.T and audit/accounting compliance matters: US$600 p.a.
Filling in monthly or quarterly VAT returns and annual accounts in the Portuguese language and currency: US$900 p.a. + the charges for the preparation and submission of quarterly V.A.T. returns and accounts will be made on a time spent basis and will obviously vary according to the amount of activity undertaken by the company

VAT and annual accounts
A Madeira company must register for V.A.T. as a matter of Company Law, and submit
quarterly V.A.T. returns. Additionally all Madeira companies must submit full audited accounts at the end of each financial year. We are able to arrange for the registration of the Company for V.A.T., the preparation and submission of quarterly V.A.T. returns and the preparation and filing of full audited accounts upon request. The charge for having us act as the fiscal agent for the company and undertake the responsibility for V.A.T and audit/accounting compliance matters is a minimum of US$900 per annum and the charges for the preparation and submission of quarterly V.A.T. returns and accounts will be made on a time spent basis and will obviously vary according to the amount of activity undertaken by the company.

Timescale:
Due to the fact that the initial steps of incorporation of a Madeira company follow the same pattern as that for a Portuguese mainland company, the inevitable Portuguese bureaucracy causes substantial delays and a minimum of two months should be allowed for incorporation.

Than it does take approximately 2 weeks for documents to arrive from Madeira by DHL courier services.

A normal Madeira company is exempt from taxation until 31st December 2011 but must pay tax at a rate of 36% on dividends received from EU subsidiaries but 95% of that income is exempt from tax making an effective rate of tax on those dividends of 1.8%. The company is otherwise exempt from all tax.
The capital
of PTE400,000 that is approx. US$2,100 MUST be issued and fully paid-up!

Double taxation treaties:
Madeira companies which are located within the Offshore Financial Centre can be structured so as to be completely exempt from all forms of Madeira taxation until 31st December 2011. Notwithstanding this attractive tax treatment, a Madeira company is considered to be the same as a normal Portuguese tax paying company and therefore falls within the terms of the taxation treaties signed by Portugal with Austria, Belgium, Brazil, Denmark, Finland, France, Germany, Italy, Japan, Mozambique, Norway, Spain, Switzerland and the United Kingdom. The terms of these treaties provide that payments from these countries can be made with a much lower rate of tax being withheld at source. For example, royalties being paid by a UK company to a non-resident corporation or individual would normally be subject to a withholding tax of 25%. However, if those same royalties are paid to a Madeira company the rate of withholding tax may be reduced to10% by virtue of the provisions of the UK/Portugal tax treaty. This is despite the fact that those same royalties would not be subject to tax on arrival within the accounts of the Madeira company.


We are pleased to provide a summary of the salient features of companies incorporated in Madeira.


[ BACKGROUND ] [ COMPANY FORMATION ]
[ SHARE CAPITAL, TAXATION, LICENCE FEES & COMPLIANCE ]
[ STRUCTURE OF MANAGEMENT
]


 

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

Two*

Three*

Bearer Shares Allowed

No

Yes

Corporate Directors Permitted

No

Yes

Company Secretary Required

No

No

Standard Authorised Share Capital

Esc. 1m

Esc. 10m

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

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).


COMPANY FORMATION

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.

NAMES REQUIRING CONSENT OR A LICENCE
The Portuguese names and their foreign language equivalent for bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, asset management, investment fund or any name that may imply an activity associated with the banking and insurance industries.

SUFFIXES TO DENOTE LIMITED LIABILITY
Limitada (Lda).

Sociedade Anónima (SA).

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
None.


SHARE CAPITAL, TAXATION, LICENCE FEES AND COMPLIANCE MATTERS

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, Spain1, Switzerland, United Kingdom and Venezuela. Negotiations are nearing completion with other countries.

1Treaty relief denied to Madeira companies controlled by non-residents of Portugal.

LICENCE FEES

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 STATEMENT REQUIREMENTS
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.


STRUCTURE OF MANAGEMENT

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. Unipersonal companies may have one shareholder.

SHAREHOLDERS
The minimum number of shareholders for a Lda company is two, and five for a SA company. Companies incorporated as a "Sociedade Unipessoal" may have one shareholder.


ORDER


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