Are you considering a long-term stay in Portugal, perhaps coupled with profitable business prospects? The good news is that achieving this dream isn’t as complex as it may seem. You don’t necessarily require a large-scale business venture to qualify. By registering a sole proprietorship in Madeira, Portugal, you can secure not only a residence permit but also access to the enticing realm of tax incentives offered by the country.Why Opt for Madeira to Register a Sole Proprietorship?Choosing Madeira over mainland Portugal comes with certain advantages, particularly in terms of streamlining the process of registering a sole proprietorship. However, if your ambitions extend beyond freelancing from afar and you aim to become a resident of Europe, you can explore the Golden Visa program, provided you meet the requirements.Another appealing option within Portugal is the Non-Habitual Resident (NHR) program, renowned for its generous tax incentives. Under the NHR program, foreign individuals gain the privilege to live, work, and establish companies in the EU with the added perk of zero taxes on worldwide income for up to a decade.Madeira’s Free Zone is the gateway that unlocks access to all these enticing prospects, which many investors ultimately gravitate towards.Advantages of a Sole Proprietorship in MadeiraMadeira, as an autonomous region of Portugal, enjoys the liberty to set its tax rates independently. Nevertheless, it adheres to the same overarching laws and regulations as the rest of Portugal and the broader European Union.Here are some key advantages offered by Madeira to sole proprietors: No Minimum Share Capital: There’s no minimum share capital threshold, allowing you to start with any amount you deem suitable.Golden Visa Eligibility: Fulfilling certain requirements enables you to participate in the Golden Visa program, which can ultimately lead to acquiring an EU passport.Strategic Location: Madeira’s advantageous geographical location acts as a convenient crossroads for trade between Europe, Africa, and the Americas.Currency Freedom: There are no currency controls imposed in Madeira.Tax Incentives: Madeira extends numerous tax incentives, including the coveted Non-Habitual Resident (NHR) status, which offers up to a decade of zero taxes on global income.Visa-Free Travel: Holders of an EU residence permit can travel freely across EU countries without the need for a visa. Income Tax: The rate varies based on your earnings and can range from 0% to 47.5%.Value Added Tax (VAT): Freelancers in Madeira are exempt from paying VAT if their annual income exceeds a certain threshold. However, if applicable, standard VAT rates are 22%, with a reduced rate of 5% for those registered in Madeira’s free zone.Social Security Contributions: Calculated similarly to the rest of Portugal, these contributions are based on your earnings over the preceding three months. For precise figures, please feel free to reach out to our experts. Obtain a local tax identification number.For foreigners, documents must be translated into English or Portuguese, notarized, and subsequently apostilled or legalized at the consulate.Seeking professional assistance is advisable, and our experts can provide comprehensive guidance to ensure your documents meet all necessary requirements, minimizing the risk of rejection.You will need to open a bank account, offering a range of options through Madeiran or Portuguese banks, payment systems, or even foreign banks. It’s important to note that tax authorities may require you to declare your income accurately to monitor your actual earnings.Madeira’s sole proprietors are mandated to issue an invoice or receipt for each transaction, even when dealing with foreign clients.Submission of annual tax returns is a compulsory procedure. Possess a residence permit issued by Portugal or another European country.Enter into a long-term lease agreement in Madeira.Reside in the country for a minimum of 183 days annually.
