Global deoffshorization has fundamentally changed the ranking of jurisdictions popular for company registration. Moreover, this ranking does not remain stable. Tax incentives now often have time limitations. At the same time, the general trend of international business today is the registration of a company and the opening of a bank account in the same country.

 

AA Lawrange specializes in the registration of offshore and onshore companies, as well as the opening of corporate accounts in foreign banks and payment systems. By monitoring trends in this field, we offer clients the most advantageous options. Among them currently is Portugal, namely the free economic zone of Madeira with a special tax regime.

 

General Information on Opening a Company in Portugal

The state policy of Portugal is aimed at attracting foreign investment through various means. At the legislative level, one of the most advantageous programs in Europe for obtaining citizenship through investment in the economy has been established.

 

At the same time, the country includes the autonomous region of Madeira, which is fully integrated into the economic and political system of Portugal but has its own tax and corporate legislation. The official name of the territory with special status is International Business Center of Madeira.

 

Among the advantages of the jurisdiction:

  • Madeira is part of the EU; accordingly, companies are provided with a European image.
  • By registering a company here, it is possible to open an account in a Portuguese bank, meaning the company and the account will be in the same country.
  • No requirements or restrictions are imposed regarding the citizenship or residency of the director, founder, or beneficiary.
  • Preferential tax conditions are in force, which in the current conditions of deoffshorization have practically no analogues.

 

Important! Tax regime and incentives in Madeira

  • Corporate income tax for companies with a legal address in Madeira is 14.7%.
  • If an IBCM license is obtained, issued by Sociedade de Desenvolvimento da Madeira, SA, and a number of conditions are met, it is possible to benefit from a tax incentive — to pay corporate income tax at 5%.
  • New companies may apply the indicated corporate tax rates until the end of 2027.

 

Attention! The free economic zone of Madeira was established in the 1980s. In order to attract foreign investment to this region located 1,000 kilometers from the mainland of Portugal, a set of tax incentives was introduced. Such incentives proved effective. Currently, this jurisdiction is very popular among entrepreneurs from various countries of the world, especially among representatives of IT and e-commerce.

 

Choice of Business Form in Portugal

Depending on the specifics of your entrepreneurial activity, two forms of business may be registered.

  • Features of LDA (Sociedade por Quotas) – equivalent of an LLC

 

The most popular form of company in the country for residents and non-residents.

  • One founder of any nationality and residency is allowed.
  • The minimum share capital is only €1.
  • The capital must be fully paid up by the end of the first financial year.
  • Only registered shares may be issued.
  • Participants bear liability for financial obligations proportionally to their quotas (shares).
  • Management may be carried out by one director.

 

  • Features of SA (Sociedade Anónima) – joint-stock company

 

An optimal choice for large enterprises..

  • Minimum number of participants – 5.
  • Minimum share capital – €50,000.
  • 30% of the capital is paid immediately after registration; the remaining 70% may be deferred for 5 years.
  • It is allowed to issue registered shares and bearer shares, ordinary and preferred shares.
  • In the first years, it is necessary to form a reserve fund – 20% of the share capital.
  • Business management is carried out by a board of directors.

 

Lawrange Service Packages for Company Registration in Madeira

Before submitting documents, it is important to determine the tax strategy and business format. We offer two options:

 

  1. A “classic” Portuguese company in the legal form of LDA or SA + a bank account in Portugal – corporate income tax 14.7%.

  2. LDA or SA + bank account + IBCM license – corporate income tax 5% and 0% on dividends.

 

*Note: Portuguese legal entities are obliged to pay tax on all their profits, including those earned outside the country.

 

Can a business be registered in Portugal remotely? Yes.

How long does company registration in Portugal take? 1–2 days.

How long does it take to obtain an IBCM license? 15 working days.

 

Registration of LDA or SA with Corporate Income Tax of 14.7%

The budget for launching a “classic” Portuguese company is calculated individually, as it depends on the ownership structure and the list of required options.

 

Support from the Lawrange team includes:

  • carrying out registration actions (preparation of the articles of association, payment of all state duties and Lawrange services);
  • obtaining a NIF (identification number) for each beneficiary;
  • assistance with renting a legal address and arranging mail and address services;
  • notarial expenses and translation of documents into Portuguese;
  • opening an account in a Portuguese bank.

 

*Note: the VAT number (Value Added Tax, аналог of VAT) is included in the cost.

 

List of documents for registration of LDA or SA:

  1. Power of attorney for company registration in the registrar’s form (we will provide it), notarized and apostilled.
  2. Beneficiary’s passport, notarized and apostilled.
  3. Utility bill (as proof of residence address) not older than 3 months.

 

Attention!  A power of attorney is not required for opening a bank account. Company registration takes 1–2 working days; opening a bank account – from 7 working days and more.

 

When registering a company in Portugal, it is necessary to comply with certain legal requirements:

  • draft the articles of association;
  • confirm the existence of a registered office in the country;
  • appoint an accountant;
  • open a bank account;
  • pay state duties.

 

Stages of company formation:

  1. Selection of the legal form and a unique name, resolving the issue of legal address and office, submission of an application to the authorized authority.
  2. Opening a bank account and depositing the initial share capital in an amount depending on the chosen business form.
  3. Registration of the company in the National Register of Legal Entities (Registo Nacional de Pessoas Colectivas) and the Commercial Registry (Conservatórias do Registo Comercial), registration with the tax authorities and social insurance authorities.

 

Company Registration with IBCM License and 5% Corporate Income Tax

The right to apply for tax benefits for companies registered in Madeira is granted upon obtaining a license from the specially authorized body – Sociedade de Desenvolvimento da Madeira, SA. A wide range of business activities is permitted in Madeira, among which appropriate options may be selected. These include consulting services and programming, accounting activities and online advertising services, trade, real estate activities, etc.

 

Importantly! Main advantages of IBCM:

  • corporate income tax rate until 2027 – 5%;
  • exemption from income tax on dividends, including dividends from subsidiaries;
  • taxation of royalties – 0%.

 

The final budget for registering a company with preferential status in Madeira depends on the complexity of the company structure and the chosen bank. Since obtaining a license involves additional checks, the cost is calculated individually.

Order a consultation

 

Launch costs include:

  • submission of the application and obtaining a license from S.D.M.;
  • payment of the registration fee and IBCM insurance contribution;
  • registration actions: preparation of incorporation documents, registration with the tax authorities and social security bodies;
  • obtaining NIFs for beneficiaries and directors;
  • ensuring real presence (substance) and mail servicing;
  • professional translations of documents into Portuguese and their certification;
  • support of the procedure for opening an account in a Portuguese bank.

 

*Note 1: the VAT number (Value Added Tax, аналог of VAT) is included in the cost.

 

*Note 2:the list of documents is identical to that specified in the section on registration of a “classic” company.

 

Attention! A power of attorney is not required for opening a bank account. Company registration with obtaining an IBCM license takes 15 working days; opening a bank account – from 7 working days and more.

 

Importantly! Company registration and opening of bank accounts in the Portuguese bank Novo Banco are carried out remotely.

 

In addition to the costs of registration in the low-tax jurisdiction of IBCM, certain expenses for company maintenance will be required:

  1. During the first six months, it is necessary to hire at least one local employee and ensure payment of wages not lower than the statutory minimum. We assist in resolving all personnel hiring issues.
  2. During the first two years of operation, the company must invest a certain amount in fixed assets (equipment, real estate, etc.) and reflect this in reporting.

 

Also, maintaining the IBCM license requires regular payment of a fixed contribution in favor of the regulator.

 

Opening a Corporate Account in a Portuguese Bank

AA Lawrange offers services for opening an account with the Portuguese bank Novo Banco, which is an institution with modern services and reasonable tariffs.

 

Key information regarding Novo Banco:

  • no requirements for the amount of the initial deposit;
  • no requirements for the minimum balance amount;
  • no limits on the number of transfers per month;
  • minimum annual turnover of a corporate client – €1,000,000;
  • tariffs for outgoing SEPA transactions via the “Client-Bank” system up to €100,000 – free of charge; over €100,000 – €20;
  • incoming transactions – free of charge;
  • tariffs for outgoing transactions outside the EU (via SWIFT) through the “Client-Bank” system – 0.25% of the payment amount, but not more than €110;
  • possibility of remote account opening is provided.

 

Package of documents for account opening:

  1. Set of incorporation documents.
  2. Personal documents of beneficiaries.
  3. Special bank forms.
  4. Documents confirming the fiscal address and mailing address of the company.
  5. Certain other documentation requested within the KYC procedure.

 

Important! In addition to Novo Banco, we can offer another Portuguese bank for account opening. AK Lawrange cooperates with such banks as Millennium BCP, Santander Portugal, and Caixa Geral de Depósitos. However, to open an account with these banking institutions, the client’s personal visit is required.

 

Cost of Registration and Maintenance

Launching a business in Portugal is a comprehensive process. The final project budget is formed based on several criteria:

  • Type of license. Registration of a “classic” company or obtaining IBCM status in Madeira (which requires additional approvals).
  • Organizational form. Popular options – LDA (equivalent of LLC) or SA (joint-stock company).
  • Substance requirements. This generates expenses for renting a real office and mail servicing.
  • Banking support. Choice between remote account opening or options requiring a personal visit.
  • Additional services. For example, obtaining a tax number (NIF) for beneficiaries, translations and apostilling of documents.

 

To receive a detailed calculation tailored to your business model, contact a Lawrange consultant. We will prepare a personalized offer, taking into account current state duty rates and administrative expenses.

 

Accounting Features of a Company in Portugal

All legal entities conducting business activities in Portugal (including within the IBCM) are required to maintain accounting records in accordance with international standards in the Portuguese language. In line with the trends toward “transparency” in international business, nominee services are not used in companies.

 

  • The reporting period is 1 calendar year. The company must hold annual general meetings of shareholders/participants, submit financial statements for the previous year, and provide a report from the director.
  • Reporting is submitted electronically on a monthly, quarterly, and annual basis.
  • Every month, a payroll report is submitted and contributions are made to the social security fund (if the beneficiary is also the director, the contributions amount to approximately €150 per month).
  • Quarterly, VAT reports are submitted.
  • Annual reporting is submitted by July 15. If reporting is not submitted for two consecutive years, the company may be subject to compulsory liquidation.
  • Reports of legal entities in the organizational and legal form of Sociedade Aberta and companies meeting certain criteria are subject to audit.
  • The corporate tax return must be submitted within five months after the end of the reporting period.
  • Taxes are paid quarterly (advance payments).

 

Factors affecting the cost of accounting services:

  • Type of company. Servicing companies with an IBCM license requires specific reporting that differs from “classic” Portuguese companies.
  • Number of transactions. The final amount depends on the number of accounting entries (transactions) during the month.
  • Additional reports. The need to prepare VAT reports, payroll calculations for employees, and other financial documents.

 

To receive an accurate calculation of accounting costs for your project, please contact our specialist. We will determine the price based on the expected business activity.

 

If the company meets the following criteria, an audit becomes mandatory (it is sufficient to meet two out of three criteria):

  1. Annual profit (within two years after registration) – more than €3,000,000.
  2. Number of employees – 50 or more.
  3. Net assets exceed €1,500,000.

 

Such companies must have their own auditor on staff, who signs documentation together with other company representatives.

By choosing Portugal as a jurisdiction for opening an international company and Lawrange as your legal services partner, you ensure excellent prospects for successful business development and profit generation.

 

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