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Presentation of New Madeira and the tax benefits of Madeira

Presentation of New Madeira and the tax benefits of Madeira

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  • 1. WHY NEW MADEIRA
  • 2. INTERNATIONAL BUSINESS CENTRE OF MADEIRA NEW MADEIRA _framework _our company _principles _our strategy _activities _our services _tax regime _certainty MADEIRA _key-factors _benchmarking _general framework _institutional framework MAIN OPPORTUNITIES _other characteristics CONTACTS
  • 3. NEW MADEIRA _our company New Madeira Investment Serviços, S.A. is an independent company that operates since 1990 in the ambit of Madeira’s IBC, resulting from a spin-off of the largest law firm in Madeira. New Madeira has: • Experience and know-how in the four main areas of the IBC • A global portfolio of clients, including leading multinational companies • A long-standing cooperation with multinational professionals, law and consulting firms • Experience in the implementation and management of all kinds of structures, including e- business and industrial projects • Effective management and know-how in Madeira • All services are provided locally 4
  • 4. NEW MADEIRA _our strategy Mission To add value to its customers, partners, staff-members and shareholders through the provision of professional services that facilitate the implementation of successful companies in Portugal. Our Vision Management company of reference in Portuguese market and market leader in Madeira Strategic Values Customer’s satisfaction, integrity, excellency of services and innovation 5
  • 5. NEW MADEIRA _ our services New Madeira provides all services necessary to efficiently implement any structure in Madeira: • Incorporation and registration of companies • Registered office and respective services • Companies’ management and administration • Fiduciary services • Bookkeeping and all related legal formalities • Tax planning, legal and financial advice • Consultancy and assistance for implementation of investment projects • Services aiming at facilitating the creation of substance (offices, equip., human resources, etc.) 6
  • 6. NEW MADEIRA _ our services New Madeira provides all services necessary to guarantee the good integration of investors and respective collaborators in Madeira: • Visas and other entrance formalities • Tax planning • Translators and interpreters • Assistance in whole process of setting up personnel plus respective families in Madeira, including: • Domestic services • Insurance, health and social security procedures • Real Estate / Housing • Schools • Social networking
  • 7. MADEIRA _ general framework • Portuguese Region located in the Atlantic Ocean, 1h20m off Lisbon • Same time zone as London • A modern economy based in International Services (Tourism: 28% and International Business Centre of Madeira: 21%) • GDP per capita and productivity rate above national average • Wager in simplifying procedures and e-government 8
  • 8. MADEIRA _ general framework • Modern infra-structures • Political and social stability • Local University with international partnership programs (ex: Carnegie Mellon) • Highly specialized and efficient professional services providers • Qualified workforce, proficient language skills • Aptitude in attracting external human resources 9
  • 9. MADEIRA _ institutional framework • Autonomous Region of Portugal • Portugal is a member-state of the European Union (EU) for more than 20 years • Portugal is a member of the OECD • Own Parliament, democratically elected, with legislative powers • Regional Government nominated by the Parliament • Autonomous Tax Administration with extensive powers, including that of issuing “rulings” 10
  • 10. MADEIRA _ other characteristics • Quality of life • Safety, reduced criminality • Mild climate • Natural beauty • Reduced operational costs • Good Hotel and Housing facilities 11
  • 11. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ framework The International Business Centre of Madeira (IBC) is an instrument of economic development of Madeira Created with the goals of: • Modernizing, diversifying and internationalizing the productive structure of goods and services of the Region; • Compensating structural weaknesses resulting from the reduced size of the internal market and from the ultra peripheral status of Madeira Through the granting of tax benefits as a way to attract Foreign Direct Investment 12
  • 12. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ principles The IBC was created with the following basic principles: Full integration in the Portuguese legal order - Activities of the IBC are subject to the same regulations and supervision applicable at national level Full integration in the European Union - Preferential tax regime (state aid) previously approved by the E.U. - Total compliance with all EU treaties and law - All principles of European Union Treaty are applicable to Madeira companies and their investors, namely the principle of freedom of establishment and of provision of services - Free access to the European Internal market without discrimination - EU VAT System is fully applicable - Part of the European monetary system (reduction of operational costs, free movement of capitals and elimination of exchange risk) Competitiveness at global scale 13
  • 13. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ principles Credibility: Credible jurisdiction, approved by the EU and supported by the 27 member states – not a tax haven Safety: The European Directives apply to Madeira, ensuring a modern legal framework Transparency: Not included in any of the official black lists issued by the international organizations identifying the territories and regions qualified as tax havens; abides by all criteria defined by the OECD in terms of transparency and exchange of information. 14
  • 14. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ activities Activities may be undertaken in the following sectors: International Services Trading, consultancy, technical and professional services, holding, telecommunications, e- commerce and any other services of international nature Industrial Free trade Zone Industrial and warehousing activities, as long as they do not put at risk national health and public order International Shipping Register – MAR Shipping activities, registration of vessels, commercial yachts and pleasure crafts 15
  • 15. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime Madeira companies, licensed as from the 1st of January 2007, benefit from the following tax regime: At the level of the shareholders of the Madeira Company (MadCo) – Exemption from withholding tax (WHT) on dividends and interests – Exemption from capital gains tax on sale of shareholdings in the MadCo [1] – Exemption on the proceeds of liquidation At the level of the Madco – 3% - 5% corporate income tax (CIT) – Exemption from WHT – Exemption from local and municipal taxes – Exemption from stamp or capital duty – Lowest VAT in Europe (14%) – Exemption from notary’s and registration fees _____________________________________________________________ [1] Not applicable to countries that form part of the black list (other exemptions apply even to such shareholders) 16
  • 16. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _ access conditions Access conditions to the preferential tax regime: • To be licensed by the Regional Government of Madeira • Benefits to shareholders only accessible to non residents in Portugal • Withholding tax exemption only accessible to payments to non residents in Portugal • Corporate tax income reduction only applicable to income obtained outside Portugal • Some substance requirements are applicable 17
  • 17. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _ substance requirements Substance requirements: 1. At least one director or employee (resident or not in Portugal) in the payroll of the company (part time or full time job). 2. Whenever less than 6 jobs created, minimum investment of Eur 75,000 in the purchase of tangible or intangible fixed assets (not necessarily located in Madeira). NOTES: - Pure holding companies (SPGS) are not subject to such substance requirements. - Requirement nr 1 must be fulfilled within the deadline of 6 months - Requirement nr 2 must be complied within the course of the 2 first years 18
  • 18. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _ceilings The tax benefit is limited to the following thresholds of the taxable profit: Jobs Taxable Profit 1 to 2 Eur 2 millions 3 to 5 Eur 2,6 millions 6 to 30 Eur 16 millions 31 to 50 Eur 26 millions 51 to 100 Eur 40 millions > 100 Eur 150 millions ___________________________________________________________ At present negotiations are underway with the EU Commission that aim at increasing the level of such thresholds 19
  • 19. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _old regime Companies licensed before end of the year 2000 (old regime) are subject to the same abovementioned tax regime, with the following differences: – Full corporate tax income exemption up to the end of 2011 – Substance requirements are not applicable In 2012, such companies will automatically migrate into the new regime, being subject to 4% CIT in 2012 and 5% from 2013 until 2020 ____________________________________________________________ [1] It is still possible to purchase companies benefitting from such tax regime 20
  • 20. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _tax rates This graphic shows an evolution of the CIT rates of the old and the new tax regime: 21
  • 21. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ tax regime _ double tax agreements In general, the double tax treaty network signed by Portugal applies to the IBC of Madeira: Algeria Austria Belgium Brazil Bulgaria Canada Cape Verde Chile China Cuba Czech Denmark Estonia France Republic Finland Germany Greece Guinea Holland Hungary Iceland India Indonesia Ireland Israel Italy Latvia Lithuania Luxembourg Macao Malta Morocco Mexico Mozambique Norway Pakistan Poland Romania Russia Singapore Slovakia Slovenia Spain South Africa South Korea Sweden Switzerland Tunisia Turkey UK Ukraine USA Venezuela 22
  • 22. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ certainty Considering: • Preferential tax regime approved by the EU and approved until the end of 2020 • Possibility of extension of this deadline (after negotiation with the EU) Certainty Whatever the circumstances, no exit costs 23
  • 23. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ key factors Choosing a jurisdiction Madeira Strengths Key factors: •EU jurisdiction •Regime previously approved by the EU CREDIBILITY AND SAFETY •Part of the Portuguese legal order •EU Directives apply to Madeira •Not blacklisted TRANSPARENCY •Abides by all OECD criteria •0-5% CIT •Exemption from WHT TAX REGIME •Lowest VAT in Europe •Double tax treaty network CERTAINTY •Regime approved by the EU until end of 2020 •International Business Environment •Professional and efficient services providers OTHER CONSIDERATIONS •Qualified human resources 24 •Modern Infrastructures
  • 24. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA _ benchmarking Comparing Madeira with other EU jurisdictions: • More competitive, simple and straightforward tax regime • State aid package previously approved by the EU • Certainty until the year 2020 • Possibility of obtaining rulings with competitive margins • Lower operational costs • Madeira has never been considered a tax haven by any relevant international organization (when compared to Malta or Cyprus) • Mature legal system tested in Courts (when compared to Malta or Cyprus) 25
  • 25. MAIN OPPORTUNITIES Effective structures using Madeira: • Trading • Holding • Exit Strategy • Intra-group financing • Intellectual property (IP) • E-business and telecommunications • Holding immovable property and other assets • Shipping • Import of yachts and chartering operations • Other efficient structures
  • 26. CONTACTS Please do not hesitate to contact us: New Madeira - Investment Serviços, SA Rua Dr. Brito Câmara, nº 20 - 1º 9000-039 Funchal Madeira - Portugal Tel.: +351 291 210 200 – Fax:+351 291 210 209 newmadeira@newmadeira.com www.newmadeira.com