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Madeira company formation recently emerged as a popular choice for businesspeople. Madeira, as part of the European Union, offers a level of credibility not typically offered by other offshore jurisdictions. Those incorporating in Madeira will benefit by being considered a Portuguese corporation, after completing registration. Furthermore, Madeira corporation filing provides effective tax breaks, which make it a very attractive jurisdiction for many investors. With the stability of its government, and excellent connections with the European Union as well as having multiple double taxation treaties, Madeira emerges as a fantastic jurisdiction for incorporation. The name of the island is often misspelled, Maderia and Madiera.
Madeira Company Benefits
There are many benefits for business owners choosing to incorporate in Madeira. Some of these benefits include:
Madeira Corporate Legislation
As stated above, Madeira corporations are considered to be Portuguese corporations. Therefore, the corporate legislation they follow is the Portuguese Companies Code. Also as mentioned, Madeira is part of the European Union. As such, their companies are not considered “offshore,” but actual as actual Portuguese companies with certain tax benefits, as outlined in EC Treaty, Article 299.
Corporate Name in Madeira
Business owners looking to incorporate in Madeira must find unique corporate names that do not share similarities with already registered entities.
The corporation’s name is required to end with the word “Limitada” or its abbreviation “LDA”.
If the company has only one member, the corporation’s name must end with “Sociedade Unipessoal” or word “Unipesso.”
Madeira Office Address and Local Agent
Those incorporating in Madeira are required to have both a registered local office and agent located in Madeira for process server paperwork.
A company incorporating in Madeira is required to have at least two shareholders, although in some cases, one is allowed, if a “unipersonal” company is formed. This type of company is an LDA with one owner. LDAs with one owner are restricted from owning other unipersonal companies. Furthermore, there are no requirements for shareholders to reside in Madeira. Companies can utilize shares as registered or to a bearer.
Directors and Officers
Limited company owners incorporating in Madeira must have one or more directors. LDAs must have directors who are natural persons, that is, they cannot appoint corporate directors. Either shareholders or third parties can be directors of the corporation.
Directors must be stated in the corporation’s articles of association, and elected or removed from office at the company’s yearly meeting by the shareholders. The Directors can be remunerated or non-remunerated.
Companies are required to have an auditor, who is elected at their yearly general meeting. Both the auditor and the directors are responsible for submitting yearly tax and auditing information, as required by Madeira’s government.
The minimum authorized capital of €50,000 is required, as of this writing. The capital is divided into shares with or without a nominal value, each representing the same fraction in the capital.
Those forming their corporations in Madeira as an IBC are likely to only pay 5% corporate taxes, as of this writing.
The yearly fees for company owners incorporating in Maderia is €1800, at the time of this writing.
Registered shares allow the issuer to know at any time the identity of its holders.
Accounting and Audit Requirements
Annual accounts must be submitted to the local tax authorities even in cases where there is neither liability to taxation nor any activity. The reporting is relatively simple.
Annual General Meeting
A Shareholders meeting must be held at least once every year to approve the annual accounts and can be held whenever required by law or deemed convenient by the board of directors or supervisory board, or shareholders.
Time Required for Incorporation
The time required to complete the incorporation process in Madeira is 15-30 days.
Shelf companies are available in Portugal for those who wish to have a corporation in their hands more quickly.