Portugal Company Registration for EU & Non-EU Residents

19 April 2023

Madeira is a beautiful island known for its pleasant weather, stunning beaches, and its rich cultural history with mainland Portugal. It is also known as a world-class company registration destination with a friendly business environment and efficient legal system. Company registration in the region is highly streamlined due to recent reforms in mainland Portugal and Madeira’s status as a Special Economic Zone. The article below will provide an overview of the company registration process in Madeira for EU and non-EU residents, including the potential benefits and the necessary steps to follow.

The Advantages Of Registering A Company In Madeira, Portugal

Choosing to incorporate or register a company in Madeira offers a few significant benefits. The list of benefits below represents some of the biggest advantages attracting businesses (and people who wish to register businesses) to this Portuguese island.

  • Tax incentives. The regular corporate tax rate for a Local Portuguese Company based in the Autonomous Region of Madeira is only 14.7% (compared to 21% in Mainland Portugal). The Autonomous Region of Madeira is thus the most tax-friendly region in Portugal for business and investment. Additionally, the first EUR 25.000 of taxable profit earned by a Local Portuguese Company registered in Madeira and qualifying as a small and medium enterprise is 11.7%.
  • Straightforward company registration process. Madeira has streamlined its company formation process in recent years, making it easy for international businesses to establish a presence on the island. Company registration can be completed in as little as two weeks, pursuant of document acceptance and validation by the relevant authorities.
  • Access to the European Union market. Madeira has easy access to the European market through its status as an autonomous zone of Portugal. This allows the island to trade goods and services freely within the EU, which allows it to fully tap into the benefits of the EU’s single market economy.
  • Strategic location. While the island of Madeira falls administratively under Portugal (and enjoys strong ties to the rest of Europe as a result), it is also in close proximity to continental Africa. This makes it an attractive location for businesses who wish to tap into these markets.
  • World-class ship registry. Madeira adheres to all shipping conventions ratified by Portugal and accepts the registration of all commercial vessels (with the exception of fishing vessels). Shipping companies, yachts, and other vessels enjoy a highly beneficial tax regime, which will remain in place until the end of 2027 (when it is scheduled for review).
  • Skilled workforce. Madeira has a highly skilled and multilingual workforce and provides companies with a large pool of talent from various industries. Madeira also has several universities and trade schools at its disposal to ensure a steady stream of skilled workers is generated to meet the demands of local and international businesses.
  • Modern infrastructure. The island has well-developed infrastructure, including a stable telecommunications network, public transport, and modern healthcare facilities. The island’s status as a tourist destination has also led to investments in infrastructure for accommodation, entertainment, and leisure.

How Registration Differs For EU and Non-EU Residents

Company registration in Madeira is regulated by the Portuguese Commercial Companies Code, which means that similar rules will apply to companies looking to register there as in mainland Portugal.

Company formation is relatively straightforward for European Union residents. Applicants need a tax number, a Portuguese bank account into which share capital is to be deposited, and the company name needs to be registered with the Portuguese Commercial Registry. EU residents also benefit from the freedom of establishment within the EU, which means they can incorporate their business in any EU country without having to comply with additional requirements outside of those mentioned above.

In addition to the abovementioned requirements, non-EU residents need to present additional documents and take additional steps in order to qualify. Non-EU residents must have a resident or local tax representative to liaise with the tax authorities, and they need to submit additional records such as a valid and certified proof of address.

How To Register A Company In Madeira, Portugal

To register a local company in Madeira, you need to follow these steps:

  1. Obtain a tax number ("NIF" or "Número de Identificação Fiscal") for the shareholders and directors of the company to incorporate at a tax office in Portugal or through a representative.
  2. Apply for the approval of the company name and business purpose (activity) at RNPC;
  3. Prepare the articles of association (to be signed and notarised by all members) as well as an acceptance letter to be signed by the future director(s).
  4. Register the company and the articles of association with the Portuguese Commercial Registry and obtain an official registration certificate.
  5. The VAT number will be granted and valid for use within 2 - 3 days following the company registration.

Unlock The Benefits Of Company Formation In Madeira, Portugal

Madeira is a sought-after destination for company registration. It offers business-friendly tax incentives, easy access to the EU market, and a highly efficient company registration process. While the registration process is relatively straightforward, it may still be necessary to consult with a qualified corporate service provider or the relevant Portuguese consulate or embassy to get a better understanding of the requirements of company formation in Madeira.

SFM Corporate Services can render additional assistance with the company registration process in Madeira. We are familiar with the legal structures and regulations of this Special Economic Zone of Portugal and we are able to guide clients throughout the process.

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