Madeira

Madeira is a piece of the portoghese territory so as sanctioned from the establishment, in force on 1976.

A low aliquot of value added tax Vat (VAT) has made the island of Madeira an extremeliest attractive jurisdiction from the social point of view, in particular for all the companies of services, that sell software to the UE residents means Internet. Later on the introduction of a special European directive, that obligates to subject the Vat of these sales, a remarkable number of companies, included the big European Internet providers, have already placed their offices to Madeira.

The usefulness to transfer the companies branches consists of the fact that in accordance the articles of the cited directive, the company must pay the VAT of the takings achieved from the natural and juridical persons, that are European Union residents according to a current tax in the registrated country. That has automatically lead to the fact, that the companies that operating in the Internet field, have begun to search the disposed territory on the European Union area, with the lowest Vat tax. In Madeira the tax is only 13%.

THE OFF-SHORE COMPANIES FROM MADEIRA

The companies are disciplined from the Portuguese trade right said code of companies on 1986.

The main types of usable companies to the ends of offshore operations are the Sociedade por Quotas - Limitada (Lda) and the Sociedade Anónima (SA), comparable to the Srl and the Spa. In 1993, the Portuguese legislation introduced the possibility for a Lda or a SA to being possessed from a single natural person, fixing the so-called "Sociedade Unipessoal".

This type of company previews also the SGPS that of fact their holdings are possessed of a single person, but with a very specify legal identity (Sociedade Gestora de Participacoes Sociais). However, all the companies of Madeira are tax-free on the outside and the inside profits that come of the foreign country and from outside of the Portugal until 1 December 2011. The SPGS only have a minimal taxation on the coming from dividends from the UE that only previews an aliquot of 1,7%.

The law previews the existence of company to totally limitless responsibility, company to partially limitless responsibility and limited liability partnership.The limited liability partnership is more used.

There are two types of limited liability:

The "sociedade por quota" or also "limitada".
The "sociedade anonima" or also "S.A."

The foreign companies can moreover operate through one filial.

LIMITADA

The company can be constituted with one or more shareholders (Company or individually). Understood them the companial minimum is of 1'995.19 (four hundred thousand of escudos). They can be one or more directors.

Sociedade Anónima S.A.

A limited company of Madeira can be constituted with a single shareholder. In this case the shares must be registered shares. The minimum capital of the company is Euro 2'493.99 (five hundred thousend of escudos).

BRANCHS

The company branchs offices those already exist can be registered in order to operate in the International Business Centre without a minimum capital and it need only the license and a registration.

TAXATION

The companies are free from taxation on the yield produced until 31 December 2011. The shareholders are free from personal taxation or deduction on the dividends and the profits not distributed.

TRUSTS

The Madeira Business Centre has a law on the trust. Decree-law 352-A/88 October.

The trust companies, the trust and the beneficiaries are not subordinated to a taxation in those of Madeira.

DISCRETION AND SECRECY

The Portugal has a law on the bank secrecy that previews penal endorsements in case of violation of the obligation in it contained. In the same way the names of the field of the beneficiaries, they cannot be reveals.

COSTS

SUMMARY OF FEES SCHEDULE (LDA COMPANY) - STANDARD COSTS
INITIAL FUNDS REQUIRED – FIRST YEAR

FIXED COSTS

Fees

Incorporation fees (one off cost including disbursements)* € 3,500.00

Licence application fee (one-off cost) € 500.00

Representation fees (pro-rata in first year) € 850.00

Sub-Total € 4,850.00

VAT @ 13% (If Invoiced to the Madeira company) 455.00

Initial licence fee for current and prior years (estimate)** € 4,000.00

Total Incorporation Costs (estimate) € 9,305.00

* Value Added Tax (*)

Value added tax at the rate of 13% must be added to all costs marked with a * when the fees are invoiced directly to a company registered in Madeira.

** Licence Fee - initial and prior years

Where the original licence was issued prior to 31 December 2000 but the company was not incorporated until after 11 December 2002, the company will be charged an annual licence fee from the date of issue of the licence. In the example shown above, we have assumed the licence was issued at the end of 2000 and the company was formed in 2004. The exact amount will be depend on the date of the issue of the licence.

Other Fixed Costs (if applicable)

Directors fees – per annum (total for any number of local directors) € 2,000.00

2 x Nominee shareholders fees (€ 300 per nominee, per annum) € 600.00

If local directors are appointed the fee in the first year will be on a pro-rata basis. The nominee shareholders fee is a fixed amount per annum and is not charged on a pro-rata basis.

If directors are appointed who are not resident in Portugal, they need to prove they are paying social security in another country, usually by providing evidence with Form E101 or E104 in EU countries (including Switzerland). Otherwise they will have to pay social security contributions in Portugal which will cost approximately € 1,500 per director per annum.

VARIABLE COSTS

From the time that a company is acquired, variable costs will be charged on a time incurred basis in respect of the following services (where applicable):
The submission of the quarterly VAT Returns, accounting and tax compliance work.

Work of a legal nature and other related services.

Administration, secretarial and other services.

Variable costs are invoiced on a quarterly basis in arrears. An estimate of the cost of undertaking certain transactions is shown on the following page.

SUMMARY OF ESTIMATED VARIABLE COSTS

Set out below are estimated costs charged by Dixcart for undertaking various transactions.

Changes to the Company – Legal Work (*)

Change of directors € 600.00

Registration of Foreign Directors for Social Security in Portugal per director € 200.00

Change of quota holders (minimum charge for Public Deed) € 1,100.00

Increase in share capital in cash € 1,300.00

Change of name € 1,300.00

Issue of Power of Attorney € 600.00

Issue of Certificate of Good Standing € 150.00

Change of representative office € 500.00

Basic change to Articles of Association € 1,300.00

Other Related Services (*)

Issue of fiscal residence certificate € 450.00

Opening of local bank account € 450.00

Accounting Work

The average charge-out rate for accounting work is approximately € 60 per hour.

Administration, Secretarial and other Services

Where we are requested to provide services such as the preparation of invoices, correspondence, bank transfers and the like, these services will be charged for on a time incurred basis and billed quarterly in arrears. The hourly rate for these services will vary depending on the complexity of the work undertaken and the responsibility related thereto.