Zona Franca da Madeira
A Portuguese special regime for companies licensed to operate from Madeira. Not a separate country, and not a secrecy jurisdiction.
The legal name is Zona Franca da Madeira. English sources usually call the services part the Madeira International Business Centre (MIBC). In Portuguese it is the Centro Internacional de Negócios da Madeira (CINM).
It sits inside the Autonomous Region of Madeira, which is Portuguese territory and an EU outermost region. The tax cut is state aid. It exists only while the European Commission authorises it, and only for companies that hold a licence from Sociedade de Desenvolvimento da Madeira (SDM).
Three pieces share that umbrella: service companies in the international business centre, the industrial free-trade zone, and the Madeira International Shipping Register (MAR).
A licensed company is an ordinary Portuguese company — an Lda, an Unipessoal Lda, or an SA. The reduced IRC rate applies to profit from the licensed activity, inside a ceiling tied to jobs created in Madeira and to the authorisation that covers that licence. The figure people quote is 5%, but the ceiling and the end date move with the authorisation. Confirm the number on the SDM licence. Profit from anything outside the licence is taxed at the normal Portuguese corporate rate.
It is not a separate jurisdiction, not a zero-tax island, and not a secrecy product. Accounts, the beneficial-ownership register, and CRS/FATCA stay fully Portuguese.
Advantages
- Reduced IRC on profit from the licensed activity, inside the ceiling for that licence
- Portuguese company: EU law, Portuguese courts, Portugal's tax-treaty network
- Same corporate forms as the mainland (Lda, Unipessoal, SA)
- Industrial free zone and the international shipping register sit in the same framework
- SDM is set up to license international groups
Disadvantages
- Only the licensed activity gets the reduced rate; everything else is normal IRC
- Substance is mandatory: jobs and a real establishment in Madeira, not a mailbox
- The regime is time-limited and renegotiated with the European Commission
- SDM fees, a local office, payroll, and a certified accountant are fixed costs
- Banks and counterparties often run extra KYC on MIBC companies
- Not a secrecy or zero-tax product: full Portuguese filing and beneficial-ownership disclosure
General description. Not legal or tax advice. The licence and the Código das Sociedades Comerciais control.