Madeira is part of Portugal and therefore part of the European Union. The International Business Centre brings corporate tax to 5% on qualifying international income — and requires people employed on the island, investment in assets and a licence granted before the window closes. Below, the arithmetic of whether it pays for you.
Two constraints decide the answer, and most summaries mention only the first. The income ceiling rises with the number of jobs. The benefit itself is separately capped at a share of what you spend on payroll in the region — which is what makes a two-person structure much less efficient than the headline suggests.
These are not formalities to be satisfied on paper. The regime has survived European Commission scrutiny precisely because the substance conditions are enforced, and enforcement looks backwards.
Between one and five posts created in the first six months of activity, paired with the asset investment below. Or six or more posts, in which case the investment requirement falls away entirely.
Tangible or intangible fixed assets acquired within the first two years, where fewer than six jobs are created. This is the trade the regime offers small operations: fewer people, more capital.
The 5% applies to income from business with non-Portuguese counterparties and with other licensed entities. Revenue from the Portuguese domestic market falls outside it and is taxed at the ordinary regional rate.
Taxable income eligible for 5% is capped by a ladder that starts at €2.73M for one or two jobs and reaches €205.5M above a hundred. Profit above the ceiling is taxed at the ordinary rate.
New licences under the current regime must be granted by 31 December 2026, after which benefits run to the end of 2033. Regimes of this kind have been extended before, but planning on an extension that has not been legislated is not planning.
The assumption is that Madeira works like a classic offshore centre: a company with an address, a nominal presence and a very low rate, sitting outside the reach of European scrutiny.
That assumption is what makes people expect the 5% to be available for a fee, and what makes them surprised by the conversation about employees.
Madeira is part of Portugal and therefore of the European Union. The regime is a state aid arrangement authorised by the European Commission, with substance requirements written into it and verified after the fact.
That is precisely why banks, investors and counterparties treat a Madeira company differently from a company in a classic offshore jurisdiction — and why it is worth having at all.
No MIBC equivalent, but the lowest indirect tax in the country and the same 30% reduction on corporate rates — with none of the substance conditions, because there is no special regime to qualify for.
The lowest standard rate in Portugal, against 22% in Madeira and 23% on the mainland. For anything sold to local consumers, that difference reaches the price directly.
The same 30% reduction the autonomous regions apply, with the SME band at 8.75% on the first €50,000 — and no jobs requirement attached to it.
Logistics are expensive, connections are limited and the labour market is shallow. It works where the cost base matters more than proximity to anyone.
What people ask once they have understood that the jobs are not negotiable.
No. Employment on the island within the first six months is the entry condition, and it is verified retrospectively. What you can have without any of that is an ordinary Madeira company at 13.3% — well below the mainland, with no substance commitments attached. For a great many businesses that is the correct answer, and we will say so.
Usually not on its own, and the calculator above will show you that for your figures. The benefit is capped at 30.1% of what you spend on regional payroll, which means the saving structurally cannot cover the cost of the people generating it. The regime pays when those people do work the business genuinely needed — development, support, operations — and the tax treatment makes doing it there rather than elsewhere attractive.
The benefit can be withdrawn for periods already closed, with the difference between 5% and the ordinary rate becoming payable together with interest. This is not a theoretical risk: compliance is checked after the fact precisely because the regime has to remain defensible to the European Commission.
Broadly, international services, trade with non-Portuguese counterparties, holding activity and shipping. Revenue from Portuguese domestic customers is outside the regime and taxed ordinarily. Eligibility turns on what the company actually does rather than on how it is described, which is the part of this that needs advice rather than a calculator.
Dividends paid by an MIBC company to non-resident shareholders are exempt from Portuguese withholding, unless the recipient sits in a blacklisted jurisdiction, where the rate is 35%. What Portugal declines to tax, your own country generally still will — the full analysis is in the case study.
It has moved before. But a licence granted under the current regime is protected to 2033, and an extension that has not been legislated is not something to build a plan around. If Madeira is genuinely right for you, the rational move is to apply inside the window rather than to wait for news.
Send the figures you just modelled. If the honest answer is an ordinary company at 13.3% without the jobs commitment, that is what we will recommend — it is a good answer and it costs you far less.