Madeira’s your Brexit opportunity

22 January 2018
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Miguel Pinto-Correia
MCS Madeira Corporate Services Director of Strategic Development
Low Taxes

Today more than 10% of Madeira’s International Business Centre (MIBC) are British companies, operating in one of Europe’s most tax efficient and tax compliant jurisdictions.
Approved the tax benefits were approved by the European Commission and allow the licensing and installation of new companies, which benefit from a reduced corporate tax rate of 5% and exemption from withholding of payment of dividends, among other fiscal benefits.

The change of the VAT regime in the transactions and other tax regulations caused by the Brexit make Madeira one of the best places for companies who want to relocate in the EU.

MIBC currently has 2,000 companies operating in three economic sectors, International Services, the Industrial Free Trade Zone and the International Ship Registry of Madeira (MAR).
When compared with Malta or Cyprus, which also offer reduced corporate tax rate regimes, Madeira’s main advantage is that its regime has been approved by the EU, while other territories will have to harmonize their legislation by 2020.

Expat Paradise

The Portuguese special personal income tax regime, the NHR Regime (Non-Habitual Resident), is specifically designed for individuals wishing to transfer their residency to Portugal and currently presents and excellent opportunity to all the British wishing to relocate before or after Brexit is conclude.

Provided that all requirements are fulfilled the main characteristics of the regime are:

  • Foreign sourced income such as dividends, interest, capital gains (duly structured), rental income, occupational pensions, together with self-employment income and professional income can be exempt from personal income tax;
  • Portuguese sourced employment and self-employment income are liable to a special flat rate of 20%.

If you have not been a resident, for tax purposes, in the previous five years prior to taking up residence in Portugal you are able to benefit from the potential advantages of the NHR Regime, which can be combined with the Portuguese Golden Visa.