The International Business Centre of Madeira

The International Business Centre of Madeira (IBCM) offers a very attractive tax regime that has been approved by the European Union:

• Fully integrated into the Portuguese and European legal systems;
• Barrier-free access to the European market;
• Reduced operating costs;
• Free movement of capital in Europe;
• Part of the Eurozone;
• The EU VAT system is fully applicable.

The International Business Centre of Madeira is:

• Advantageous
• Credible
• Transparent
• Safe

What Advantages Does the IBCM – International Business Centre of Madeira – Offer to Licensed Companies?

Companies licensed at the International Business Centre of Madeira benefit from one of the most advantageous tax regimes within the European Union:

• The corporate income tax rate is 5%;
   
• No withholding tax on royalties, services, or interest paid to third parties;
   
• Tax credit for International Double Taxation;
   
• Exemption from withholding tax on the distribution of dividends to shareholders (provided they are not residents in Portugal or tax havens);
   
• Full application of the Portuguese participation exemption regime;
   
• Exemption from withholding tax on the payment of interest and other forms of remuneration through increases, allowances, or advances to shareholders;
   
• An 80% reduction in stamp duty, Real Estate Transfer Tax (IMT) and Municipal Property Tax (IMI), regional and municipal surcharges and taxes, and notary and registration fees;
   
• Reduction in the special payment on account and autonomous taxation in proportion to the applicable corporate income tax rate (in this case, a 66% reduction).

Which Companies can Register with the IBCM – International Business Centre of Madeira?  

The International Business Centre of Madeira welcomes a wide range of international companies:

As part of the Eurozone, operations carried out within the scope of the International Business Centre of Madeira benefit from low operating costs, free movement of capital, and elimination of foreign exchange risk.

Essential Requirements for IBCM – International Business Centre of Madeira Companies

Companies that are registered with the International Business Centre of Madeira and who wish to benefit from the reduced rate of income tax (5%) must begin their activity within six months in the case of international services, and one year in the case of industrial or shipping activities, beginning from the licensing date. 

They must also comply with the following eligibility requirements:

• Creation of one to five jobs in the first six months of activity and realization of a minimum investment of €75,000 in the acquisition of tangible or intangible fixed assets in the first two years of activity;
• Creation of six or more jobs in the first six months of activity.

The number of jobs is determined by referring to the number of people with a dependent employment contract with the licensed entity (full-time), provided that they reside for tax purposes in Madeira or, if not residing there, carry out their activity there.

Indefinite, part-time, or floating workers are considered in relation to full-time workers in a comparable situation, measured in the number of annual working units (AWU). For this purpose, the following are not considered:

• Workers provided by temporary employment companies, taking into account their respective user entities;
  
   
• Workers on an occasional assignment basis, taking into account the hiring entity;
  
   
• Workers under a plurality of employers regime, when the employer who represents the others within the scope of the employment relationship is not licensed with the International Business Centre of Madeira.

The benefits granted to IBCM – International Business Centre of Madeira – companies are limited to certain ceilings, which depend on the number of jobs created in Madeira.

Tax benefits are limited to one of the following maximum annual percentages:

• 15.1% of turnover generated in Madeira;
• 20.1% of the gross added value generated in Madeira;
• 30.1% of labor costs incurred in Madeira.

Income and gains, as well as expenses and losses, attributable to the activity carried out by the company through an appropriate business structure located in Madeira are considered to be generated, supported or carried out in Madeira.

Advantages for Specific IBCM – International Business Centre of Madeira – Sectors

Within the scope of the International Business Centre of Madeira, there are advantages applicable only to some specific economic sectors.

• They contribute to modernizing the regional economy, namely through technological innovation of products and manufacturing processes or business models;
   
• They contribute to the diversification of the regional economy, namely through new activities with high added value;
   
• They promote the hiring of highly qualified human resources;
   
• They contribute to improving environmental conditions;
   
• They create at least 15 jobs that must be maintained for at least 5 years.