Madeira company formation in 2026: the 5% regime closes to new licences on 31 December

Madeira offers the lowest corporate tax rate available inside the European Union to a genuinely onshore company: 5%, through the Madeira International Business Centre. There is a deadline attached to it, and it is close enough to matter for anyone reading this in 2026.

Here is the short version. New MIBC licences granting the 5% rate can only be issued until 31 December 2026, with benefits guaranteed through 31 December 2033. The 5% applies to eligible international-source income for licensed companies. A Madeira company outside the MIBC pays 14.7% regional corporate tax, or 11.9% on the first EUR 50,000 for SMEs, plus regional surtaxes above EUR 1.5 million. Minimum capital is EUR 1 per quota. Formation of a plain Lda takes same-day in person via Empresa na Hora, or three to seven business days via Empresa Online — realistically two to four weeks for a non-resident once the tax number and power of attorney are arranged. MIBC licensing adds further lead time.

The deadline, stated plainly

If the 5% rate is why you are looking at Madeira, the licence must be issued before 31 December 2026. After that the regime's future depends on EU state-aid renewal, which is not guaranteed and has been contested before.

MIBC licensing takes time on top of the incorporation. Anyone starting this in the second half of 2026 should treat the timetable as tight rather than comfortable, and should confirm current licensing lead times with the SDM concessionaire before committing.

The 5% is not automatic and a shell will not qualify

This is the part that disqualifies most enquiries. The MIBC rate demands real substance: broadly, one to five jobs created within six months plus EUR 75,000 in fixed assets, or six or more jobs. The benefit is also capped annually as a share of gross value added, payroll or turnover.

A holding company with a mailbox and a nominee does not qualify, will not be granted a licence, and would not survive a review if it were. Madeira is asking you to employ people on the island. That is the deal, and it is a reasonable one — but it is a business decision, not a filing decision.

Non-eligible and domestic income is taxed at the ordinary Madeira rate, not at 5%.

How to form the company

1. A non-resident first obtains a Portuguese tax number (NIF) remotely.
2. Grant a power of attorney to a Portuguese lawyer or solicitador, who incorporates via Empresa Online using a qualified digital certificate. No notary is required.
3. Empresa na Hora gives same-day incorporation but requires a signatory to attend in person.
4. Apply separately for MIBC licensing through the SDM concessionaire if the 5% regime is the objective.

State fees are EUR 360 for Empresa na Hora or Empresa Online with bespoke articles, and EUR 220 for Empresa Online using pre-approved model articles. MIBC licensing and annual fees are charged separately.

It is an onshore EU company, with onshore obligations

This point is worth making firmly because Madeira is often marketed alongside offshore jurisdictions. It is not one.

An Lda is a Portuguese company with full company-law compliance, Portuguese accounting standards, VAT and reporting obligations. Lower tax, yes; low administration, no. Anyone comparing it against a BVI or Seychelles company is comparing two entirely different products.

Audit by a Revisor Oficial de Contas is required only if the company exceeds two of three thresholds for two consecutive years: a balance-sheet total of EUR 1,500,000, net turnover of EUR 3,000,000, or an average of 50 employees. Most small Ldas are exempt.

No resident director is required — the gerentes may be non-resident foreigners of any nationality — though MIBC status requires genuine local activity regardless of who the managers are.

Who this is actually for

A founder building a real operation with staff on Madeira, who wants the lowest corporate rate in the EU on international income and can commit to the job-creation and asset conditions, and who can complete licensing before 31 December 2026.

For anyone else, the ordinary Madeira rate of 14.7% is a perfectly respectable EU rate but is not a reason to choose the island over mainland Portugal, and the 5% headline should be mentally discounted to zero unless the substance conditions are genuinely met.