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Madeira – A region fit for investment

Madeira, an integral part of Portugal fully integrated in the E.U., is located in the Atlantic Ocean, 900 km southwest of Lisbon. The archipelago, with a total population of nearly 254,000 inhabitants, has the city of Funchal as its most important centre.

Madeira enjoys political and social stability, as an Autonomous Region of Portugal and having its own democratically elected governing bodies – the Regional Parliament and the Regional Government.

A significant contribution to Madeira’s appeal as a business jurisdiction has been brought about by Madeira’s International Business Centre, the island’s main tool for attracting foreign investment. The MIBC has been formally approved by the European Union as a legitimate programme of economic development. Such fact, coupled with the MIBC’s full integration in the Portuguese and the E.U.’s legal system, have made of Madeira not only an efficient investment location, but also a well-regulated business centre recently regarded by the OECD as a model to follow.

The International Business Centre of Madeira

The IBC of Madeira is designated to attract foreign investment in order to diversify and modernize the island’s economy. It has been conceived as a programme of State aid fully approved and supported by Portugal and the European Union, with the objective of providing the investor with a unique package of benefits. The wide scope of activities which may be carried out in the IBC, ranging from manufacturing and trading to shipping activities, and the various synergies which can be found among themselves, demonstrate that the MIBC has been carefully structured to serve the investor with a global package.

A Wise Investment

Companies from all over the world have chosen Madeira as their business location. Some are small firms, establishing a presence away from their home markets for the first time. Others are well-known and large multinationals continuing to expand their operations in Europe.

A win-win location

  • Significantly reduced taxation. The corporate tax applicable on the island may be reduced to effective rates ranging from 4% to 5% until the end of 2020, within pre-established ceilings. Such fact becomes crucial in the application of CFC rules and Double Taxation Agreements;
  • Full-membership in the European Union, providing duty-free access to a market of 370 million people, the elimination of transaction costs, consistently lower interest rates and a generally more stable economic environment;
  • Low operational costs in comparison with other european countries;
  • High quality support services – existence of an efficient network of banks, management companies, local university, international schools and modern telecommunications infrastructure;
  • Pro-business attitude – Deep commitment by the Madeiran authorities and the local population to develop the island’s economy by encouraging and welcoming foreign investment and the consequent transfer of know-how;
  • Existence of an intercontinental airport, with ten daily connections from and to Lisbon as well as with frequent connections every week to London and other major european cities such as Milan, Amsterdam, Paris and Berlin;
  • Multi-lingual character of the local population. English, German and French are widely spoken on the island due to the influence of tourism-related activities. The average madeiran has 6 years of English in public schools;
  • Madeira enjoys a great quality of life, having a mild climate, one of the safest living environments in the world as well as one of the lowest costs of living in the European Union. The island’s capital, Funchal, is a cosmopolitan city, while the unspoiled interior of Madeira is characterized by abundant vegetation and spectacular scenery. Residents on the island enjoy a vast range of leisure activities, such as golf, surfing, sailing, fishing, horse-riding, mountain-climbing, complemented by a diversified network of hotels and restaurants. The existence of numerous foreign communities living in Madeira is a good illustration of the island’s appealing life-style;
  • The existence of the University of Madeira, a source of skilled professionals for international companies. Currently, nearly 300 students graduate from the university every year;
  • Possibility to recruit highly qualified professionals from a large pool of Madeirans studying in Portuguese universities or working abroad and no restrictions on the employment of foreign qualified staff;
  • Young available workforce. In fact, 35% of the population are under the age of 24;
  • High productivity of the local workforce, matching the level of the E.U. average.