Tax Advantages.

Companies licensed in the Madeira International Business Centre receive a complete package of tax incentives, all approved by the European Commission under EU State Aid rules for outermost regions.

Corporate income tax (IRC): 5%

Licensed MIBC companies pay 5% IRC on qualifying income from international activities. The comparison points are stark: 19% in mainland Portugal in 2026, and 13.3% even under Madeira's general regional rate.

The 5% rate applies up to an annual income cap set by the number of full-time employees kept in Madeira:

1. 1 to 2 employees: €2,730,000
2. 3 to 5 employees: €3,550,000
3. 6 to 30 employees: €21,870,000
4. 31 to 50 employees: €35,540,000
5. 51 to 100 employees: €54,680,000
6. More than 100 employees: €205,500,000

Income above the cap is taxed at Madeira's standard regional rate of 13.3%. The total benefit also cannot exceed the highest of: 20.1% of annual gross value added in Madeira, 30.1% of annual staff costs in Madeira, or 15.1% of annual turnover in Madeira.

Withholding tax: 0%

• Dividends to non-resident shareholders: 0% (where the shareholder is not in a Portuguese-blacklisted jurisdiction)
• Interest on shareholder loans: 0%
• Royalties and service fees to non-resident entities: 0%
• Portuguese corporate shareholders holding 10% or more for at least 12 months: 0%

Capital gains tax: 0%

Capital gains on qualifying participations are fully exempt under Portugal's Participation Exemption, provided the MIBC company holds at least 10%, the holding period is at least 12 consecutive months, and the subsidiary is not in a blacklisted jurisdiction.

Non-resident shareholders selling their stakes in MIBC companies are also exempt from Portuguese capital gains tax, provided they are not based in blacklisted jurisdictions.

Surtaxes: substantially reduced

• Municipal surtax (Derrama Municipal): 0% in most Madeiran municipalities, including Funchal
• Regional surtax (Derrama Regional): capped at about 1.26% for MIBC companies, against up to 9% on the mainland

Property and stamp taxes: 80% exemption

MIBC-licensed companies get an 80% exemption on stamp duty, municipal property tax (IMI) and property transfer tax (IMT) on transactions with non-residents or other MIBC entities.

Patent and Software Box

Portugal's Patent and Software Box regime grants an 85% IRC exemption on income from patents, registered software and industrial designs. Combined with the MIBC 5% rate, the effective tax rate on qualifying IP income can fall to roughly 0.75%.

Access to double taxation treaties

MIBC companies are Portuguese companies, so they have full access to Portugal's network of more than 79 double taxation treaties, including the US, UK, Germany, France, China, Brazil and every EU member state, along with EU directives such as the Parent-Subsidiary Directive and the Interest & Royalties Directive.

For a personal analysis of how these advantages apply to your structure, contact MadeiraLab for a confidential consultation.