Is Madeira being overlooked by small business owners?

Madeira is presently one of the best locations in the European Union for small companies, self-employed consultants or online trading companies to base their business. We will take a closer look into why Madeira should be the only choice for your business and the outstanding tax incentives on offer to both save your business corporate taxation, while growing your overall business through some unique competitive advantages that will give your business the edge.

Profitable advantage

The Madeira International Business Centre or MIBC was created inside the European Union to allow The Madeira Islands to grow through business investment in Madeira via creation of local jobs, the purchase of investment property and development of specialized local skill sets in Madeira. The Madeira Islands have a unique legislation approved by the European Union allowing a reduction in the normal 20% corporation tax rate down to just a 5% level, this is one of the lowest rates in the world. The reduced tax rate is fixed until 2027 before being subject to further review and possible extension.

World beating advantage

Inside Madeira there lays one very special ingredient, the local workforce. The educated workforce has two significant advantages, firstly English is the second language, speaking it with very little or no accent. Secondly the wage costs in The Madeira Islands are very competitive when compared to the rest of Europe, giving any new company trading here a lower mark for outgoing wage commitments. For example, the minimum nett monthly wage in Madeira is €550.

A quiet tax regime

The MIBC in Madeira has never been considered a tax-haven by any country or international institution. The tax regime is deemed as a state-aid by the European Union, therefore many businesses have either re-located or opened a new business trading in The Madeira Islands, some of these companies have even opted to have the company dividends paid overseas, in doing so they have the second advantage of the dividend leaving Madeira free of any withholding tax, effectively allowing the tax to be paid in another country of residence. It should be noted that Portugal has a list of blacklisted jurisdictions where dividends will be taxed before leaving Madeira.

Investment in infrastructures

In terms of internal development The Madeira Islands have benefited from a substantial investment in quality infrastructures, from the airport to the road network, to the extensive and impressive tunnel network right down to the shipping and harbour facilities, Madeira has a sophisticated and growing communication system and the autonomous Madeira government has pledged that future investment will be aimed in turning Madeira into an advanced IT hub.

European Funding for business

Madeira is considered a location for development by the European Union and a special fund exists supported by the local government of Madeira and the EU. This fund is to help support and grow small and medium enterprises that are considered qualified to benefit from the funds. A new or existing small business can benefit from up to €50,000 of non-refundable investment assistance. Companies who are registered in the MIBC are also entitled to apply for this special funding. The funds cannot be used in the day to day running of a business but towards the initial start-up cost of a new business or / and as a new venture / initiative for an existing business. The funds are also available every year and require an application procedure.

Business relocation

Not every type of business is considered suitable for the low tax benefits of the MIBC and there are some restrictions and rules that govern the programme. Here are just some business examples that are considered ideal for the MIBC; Trading companies with international business, businesses who work in software development, website design, the IT sector, websites and consultants with substantial earnings. Opening a business in Madeira is both straightforward and surprisingly easy, we do advise contacting a recommended accountant specialist in the MIBC as a first step.

In conclusion

While some companies have relocated offices or just opened a new business venture, many other business owners remain completely unaware of the competitive benefits of locating their business to Madeira. While those that have moved their business to Madeira are enjoying a great deal of success, quality support and good weather, other small business owners just don’t realize the advantages a Madeira business relocation could do to their trading potential and personal quality of life!

If you are a business owner and would like more information on the MIBC and the opportunities trading in Madeira, then please contact Robert Webb at Bespoke Villas on +351 9666 77630 or email and request our ‘fact packed PDF’ about the MIBC.