Let's invest
Invest in Madeira through the Free Trade Zone
A 5% corporate tax rate, inside the European Union and the eurozone. We explain the regime, check your project and support you until you are set up.
- corporate income tax for companies licensed in the Free Trade Zone
- 5%
- corporate income tax for companies licensed in the Free Trade Zone
- benefits guaranteed until 31 December 2033
- 2033
- benefits guaranteed until 31 December 2033
- reduction in stamp duty, property transfer and property taxes
- 80%
- reduction in stamp duty, property transfer and property taxes
- regime approved by the European Commission
- EU
- regime approved by the European Commission
Free Trade Zone · IBC
International Business Centre of Madeira
The Madeira Free Trade Zone, or International Business Centre of Madeira (IBC), is an economic development instrument of the Region, created to modernise, diversify and internationalise the regional economy.
Companies licensed by December 31, 2026 benefit from a reduced corporate tax rate until December 31, 2033. Registration and licensing are handled by the Madeira Development Company (SDM).
Eligible activities
- International servicesTrading and holding, consultancy, professional and technical services, among others.
- Industrial activitiesManufacturing and warehousing, provided they do not endanger public order or national security.
- Shipping and aviationRegistration of ships, oil rigs and yachts, commercial or pleasure.
Free Trade Zone · IBC
Requirements
You need to meet one of these two conditions:
1 to 5 jobs
Created in the first six months, with a minimum investment of €75,000 in tangible or intangible fixed assets within the first two years.
6 or more jobs
Created in the first six months of activity. No minimum investment is required.
- Activity must start within six months (international services) or one year (industry, shipping and aviation).
- Employees must be tax residents of Madeira, or work there, on full-time permanent contracts.
Free Trade Zone · IBC
Tax benefits
5%
Reduced corporate tax
Applies to profits from operations with entities not resident in Portugal or with other Free Trade Zone companies.
0%
Dividends, interest and royalties
Possible exemption under the EU directives (Parent-Subsidiary, Interest and Royalties) and Portugal's double tax treaties.
−80%
Transaction and property taxes
Stamp duty, property transfer tax (IMT), property tax (IMI), regional and municipal surcharges, notary and registration fees.
- About 66% lower autonomous taxation (except undocumented expenses and payments to tax havens).
- Exemption on interest from loans by non-residents, when used for investment and running the company.
- Exemption on royalties and other services provided by non-residents, linked to the Free Trade Zone activity.
Free Trade Zone · IBC
Benefit limits
The 5% rate applies to taxable profit up to an annual limit that depends on the jobs created. The total benefit is also subject to one of these annual ceilings: 20.1% of gross value added, 30.1% of labour costs or 15.1% of turnover generated in Madeira.
Is your project eligible?
Enter your project's figures. It is a first indication; our team will confirm it with you.
Meets the requirements · 1 to 5 jobs
€3,550,000
The 5% rate applies to up to €3,550,000 of taxable profit per year.
Check my project with the team| Jobs | Minimum investment | Taxable profit at 5% |
|---|---|---|
| 1–2 | €75,000 | €2,730,000 |
| 3–5 | €75,000 | €3,550,000 |
| 6–30 | — | €21,870,000 |
| 31–50 | — | €35,540,000 |
| 51–100 | — | €54,680,000 |
| More than 100 | — | €205,500,000 |
Madeira's tax system
Taxes in Madeira in 2026
Even outside the Free Trade Zone, companies and people pay less tax in Madeira than on the Portuguese mainland: the Region applies the maximum 30% reduction the law allows.
| Tax | Madeira | Mainland Portugal |
|---|---|---|
| Corporate tax (IRC) — standard rate | 13.3% | 19% |
| Corporate tax — SMEs, first €50,000 of profit | 10.5% | 15% |
| Corporate tax — start-up SMEs or SMEs in low-density areas, such as the north of Madeira and Porto Santo (first €50,000) | 8.75% | 12.5% |
| Regional (Madeira) and state (mainland) surcharge on profits above €1.5 million | 2.1% · 3.5% · 6.3% | 3% · 5% · 9% |
| Personal income tax (IRS) | 30% below the mainland, in every bracket | — |
| VAT — standard · intermediate · reduced | 22% · 12% · 4% | 23% · 13% · 6% |
| Madeira Free Trade Zone (CINM) | 5%, until 2033 | — |
Sources: Budget of the Autonomous Region of Madeira for 2026 (Regional Legislative Decree 8/2025/M), State Budget for 2026 (Law 73-A/2025), Law 64/2025 and the State Budget proposal for 2027, submitted on 8 October 2026. Indicative figures; not tax advice.
Let's invest
How to set up
- 01
Talk to us
Tell us about your project. We check it fits the regime and its conditions.
- 02
Licensing
Licence application to SDM, the company that manages the International Business Centre.
- 03
Start
Begin activity within six months (services) or one year (industry and transport).
- 04
Grow
Hiring, investment and ongoing support from Invest Madeira.
Let's invest
Investment in Madeira: news
- Five Madeiran companies at SIAL Paris 2026
- Madeira presents investment opportunities in Paris and signs an agreement with the Franco-Portuguese Chamber of Commerce
- State Budget for 2027: corporate tax falls to 18%
- Invest Madeira strengthens its partnership with AICEP at the AICEP Forum 2026
- US mission: companies in San Francisco and Seattle interested in Madeira
- New Free Trade Zone regime: methodology agreed with the European Commission
- Mission to China, Macau and Hong Kong: three agreements and a Chinese pharmaceutical company interested in Madeira
- Madeira at the Portugal Nação Global forum
For information only, based on the tax framework in force at the time of writing. This is not legal or tax advice: anyone wishing to benefit from this regime should seek legal and/or tax advice.
Source: Invest Madeira's “Madeira Free Trade Zone” flyer, with dates updated by Portugal's State Budgets for 2025 and 2026.
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