Madeira

> Key Corporate Features
> General Information
> Company Information
> Compliance

Key Corporate Features

* Both Limitada and SA companies may be incorporated with a single shareholder, as Sociedade Unipessoal.

General Information

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.

The population is approximately 265.00 of which 100.00 live in the capital Funchal and are all mainly of Portuguese origin, with a small expatriate British community.

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.

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.

Portuguese is the national language, English is taught in schools and is used daily in commerce and international trade.

The currency is the Euro €.

There is no exchange control.

The type of law is Civil Law.

Company Information

The principal corporate legislation is the Portuguese Companies Code (Código das Sociedades Comerciais).

The types of company for international trading are: Sociedade por Quotas - Limitada (Lda) 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 Participações Sociais).

The procedure to incorproate is: 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.

A Madeira company can’t undertake any business that is not specified in its constitution. A Madeira Company can’t undertake the business of banking, insurance, assurance, reinsurance, fund management and asset management (other than its own assets) and certain other activities without prior consent and licensing.

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

The language of legislation and corporate documents is portuguese, but translations can be provided.

A registered office is required and must be maintained in Madeira.

Shelf companies are available.

The time to incorporate is approximately 60 working days. Ready made companies are available.

A name that is similar to or identical to an existing company is forbidden. Also a name that in the opinion of the Registrar may be considered undesirable or offensive, a name that may imply an illegal activity and 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.

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.

The following names require 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.

The suffixes to denote limited liability are: Limitada (Lda) and Sociedade Anónima (SA)

There is no disclosure of beneficial ownership to authorities.

Compliance

The following capital requirements apply: € 5.000 minimum authorised and issued for Lda., € 50.000 minimum authorised and issued for SA.

These classes of shares are 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.

Madeira Companies licensed prior to 1st January 2000 are exempt from tax on income obtained from activities carried on outside of Portugal until 31 December 2011. Companies licensed after this date are subject to a different and special regime and clients should seek advice from us.

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, Netherlands, Norway, Poland, Republic of Korea, Spain, Switzerland, United Kingdom and Venezuela. Negotiations are nearing completion with other countries.

The following licence fees apply: € 750 application fee and € 1.500 annual fee. A discount of € 500 on the annual fee is granted to companies managed by a licensed management company provided that settlement of the fee is made within one month of the due settlement day.

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.

It is normal to appoint two directors to a Limitada and three to a SA. SA companies must have an odd number of directors. The directors must be natural persons of any nationality and need not be resident in Madeira (SA's may have a corporate director represented by a named individual).

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.

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