Madeira is a Portuguese archipelago in the Atlantic Ocean, situated 625 miles (1,000 km) from Mainland Portugal and 545 miles (900 km) from North Africa. It consists of four islands: Madeira, Porto Santo, Desertas and Selvagens. Madeira and Porto Santo are the only inhabited islands, while the Desertas and Selvagens islands are uninhabited natural reserves that have been declared World Heritage Sites by UNESCO.
Madeira Island is the biggest and most important island of the archipelago with an area of 741 km2. Due to its subtropical climate and landscapes, it is known worldwide as an all year round tourist destination. Although it is an integral part of Portugal and subsequently of the European Union, where all laws applicable on the mainland also apply, Madeira is an autonomous region with its own government and parliament.
The population numbers approximately 245,000 inhabitants and its capital is the city of Funchal. Madeira’s International Airport serves several daily flights to Lisbon and other major cities. The official currency is the EURO and it is a civil law jurisdiction. A considerable part of the younger population is fluent in English.
Madeira’s economy is based on tourism, wine production and the International Business Centre of Madeira (IBCM). Created at the beginning of the eighties, the IBCM has proved to be a success and currently represents around 21% of the Regional Gross Domestic Product.
The highly advantageous tax regime, in addition to competitive operating costs, makes Madeira an attractive centre for international investment.
INTERNATIONAL BUSINESS CENTER OF MADEIRA
Madeira, for being an outermost region of the European Union and benefiting from the state aid regime foreseen in the EU treaties, was entitled to implement a development program to attract investment and economic activity. This program commonly known as the Madeira Free Trade Zone or International Business Centre of Madeira (IBCM), initially created in 1980, was duly approved by the European Commission and subsequently over time reapproved in five different occasions, last of which in 2007 (State Aid N 421/2006).
Interested investors may take advantage of the several benefits of the three main sectors of activity of the IBCM:
1. The Industrial Free Trade Zone
All industrial activities such as manufacturing, production, assembling and warehousing should take place in an industrial park located in Caniçal, which is located 8 Km away from the island’s international airport and next to the main commercial port. These activities enjoy attractive tax and customs duties regimes.
2. International Services
This is the main sector of the IBCM, allowing all type of international service activities such as international trading, management and consulting services, e-business, telecommunications, ownership of intellectual property, real estate investments or holding of participations.
3. International Shipping Registry of Madeira (MAR)
An International Shipping Registry – MAR – Portugal’s second register, was also created within the IBCM. MAR accepts the registration of all types of commercial vessels, including oil rig platforms, as well as commercial and pleasure yachts.
Seychelles Islands are situated in the Indian Ocean, northeast of Madagascar. They are comprised by around 115 islands. The capital of the islands is Victoria. Seychelles have a population of approximately 87,500 and are comprised by a mixture of French, African, Indian, Chinese, and Arab.
The law under which business takes place is based on the same principals to the UK legal system, to the French Civil Law and to Customary Law. The islands have gained their independence form the UK in 1976. The Seychelles islands are a tax heaven offshore jurisdiction, nowadays, the term known as International Business Companies with a 0% corporate tax.
Country
The Seychelles, officially Republic of Seychelles, is a member of the British Commonwealth having a presidential-parliamentary democracy. The islands have been enjoying long-term political peace and stability. The law that is being followed is the one of the UK common law, the French civil law and the customary law.
The currency used in Seychelles Rupee and the official and business language is English, French and Seychellois Creole are widely spoken. Seychelles is under a matriarchal status.
Taxation
Seychelles is a tax heaven jurisdiction having 0% corporate tax. All dividends paid by the offshore company are being tax exempt as well as dividends received, income tax, and capital gain tax.
Types of Companies
Formation
Uses of Companies
Holding of assets and investments / Trading and Commercial transactions
Asset protection vehicles / consultancy and personal service companies
Personal Investment Funds
Offshore companies are mainly used as “wallet”, meaning personal investment funds. Within a tax structure, it will be the final stage of the asset ownership and in this way it will be used to finance the rest of the projects and business activities of the group.
As a Trade Agent
It is commonly used for international trade but its use is more and more restricted these days as most of the countries worldwide do not recognize the invoices issued by offshore companies as expense or they change withholding tax upon their payment. So in the context of international tax planning it is important to use the offshore company as a trade agent with companies in jurisdictions that recognize offshore invoices such as Cyprus and UK.
General Provisions
- A limited liability company may be formed by one or more persons which shall be liable for the company’s obligations with their contributions to the company’s registered capital.
Form of Memorandum of Association
- The Memorandum of Association shall be executed in writing.
- A partner may be represented by an agent holding a special power of attorney with notarized signature.
- When the limited liability company is formed by one person, a constitutive deed shall be drawn up instead of Memorandum of Association.
Content of Memorandum of Association
The Articles of Association shall state:
1. the company’s trade name, seat, and head-office address;
2. the purposes and the time period for which the company is being set up;
3. the name or, respectively, the trade name, the seat and standard identification code, as well as the address of each partner;
4. the amount of the capital. ( the minimum is 1 euro )
5. the interests of the partners;
6. the management and manner of representation;
7. the privileges of the partners, where agreed upon;
8. other rights and obligations of the partners.
Trade Name
- The trade name of a company shall contain the extension [limited liability company] or the abbreviation “OOD” (Ltd.).
- Should all the capital be owned by one person, the trade name shall contain the extension [single person limited liability company]
Capital and Shares
- The capital of a limited liability company may not be not less than BGN 2 ( 1 euro) . It shall consist of the participating interests of the members, and no interest may be smaller than BGN 1.
- The sum total of the participating interests must be equal to the capital, and the value of each participating interest must be a multiple of 1.
- The interests of the individual partners may be of unequal value. An interest may be held jointly by several persons.
Liability of Founders
- The founders shall be liable jointly and severally before the company for damages caused in the course of its formation, if they have not acted with due care.
- The founders shall not be entitled to remuneration for the formation of the company from the registered capital.
Registration
- For registration of a company in the commercial register it shall be necessary:
1. to file the Articles of Association;
2. to have an appointed manager or managers;
3. payment up of the minimum amount of capital prescribed by the Act.
- (2) The particulars under Items 1, 2, 3 (only the amount of the capital) and the management and manner of representation shall be recorded in the register and shall be disclosed.
- (3) For recording in the commercial register the performance of a business activity as an investment intermediary and of any other activity for which a separate law stipulates the performance thereof after obtaining permission from a government authority, the respective license or permission shall be presented.
- (4) In case of amending or supplementing the Articles of Association, a copy of the articles containing all amendments and supplements and certified by the body representing the company, shall be presented at the Commercial Register.
Admitting a New Partner
- A new partner shall be admitted by the general meeting upon an application in writing, in which it shall state that it accepts the terms of the Articles of Association. The resolution to admit the partner shall be registered in the commercial register.
Transfer of Shares
- An interest in a limited liability company may be transferred and inherited. The transfer of an interest from one partner to another shall be unrestricted, and the transfer to third parties shall be subject to the provisions for admitting new partners.
- An interest in a limited liability company shall be transferred with notarized signatures and shall be registered in the commercial register.
Liability upon Transfer
- The transferee shall be liable jointly and severally with the transferor for any payments to the registered capital due at the date of transfer.
Management
Types of Organs
- The company’s organs shall be:
1. the general meeting;
2. the manager (managers).
- The manager does not necessarily have to be a partner.
General Meeting of Partners
- The general meeting of partners shall consist of the partners.
- The company’s manager shall take part in the general meeting’s sittings in a consultative capacity.
- Where the number of employees exceeds 50, they shall be represented in the general meeting in a consultative capacity.
Powers of the General Meeting
- The general meeting shall:
1. amend the Articles of Association;
2. admit and expel partners, give consent on the transfer of an interest to a new partner;
3. approve the annual report and balance sheet, distribute the profits and resolve on their payment;
4. resolve on the increase or decrease of the registered capital;
5. appoint a manager, fix his remuneration and relieve him of liability;
6. resolve on setting up or closing down branches and participation in other companies;
7. resolve on the acquisition or alienation of real property and real rights therein;
8. resolve on bringing a company action against the manager or comptroller and appoint an attorney to proceed with the suits against them;
9. resolve on additional monetary contributions.
- Each partner has as many votes in the general meeting as its interest of the capital, unless the articles provide otherwise.
- Resolutions under Items 1, 2 and 9 of para 1 shall be adopted with a majority of more than three quarters of the capital, and resolutions under Item 4 – unanimously; a greater majority may be provided in the Articles of Association. The partner whose expulsion is put to a vote shall not vote and its interest stake shall be deducted from the capital when determining the majority. All remaining resolutions shall be adopted with a majority of the capital, unless the articles provide otherwise.
- The partners may vote by proxy only when such proxy holds a special power of attorney in writing; the above rule shall not apply to partners which are legal persons or to agents by operation of law.
- The general meeting shall adopt resolutions on labor and social issues only after hearing the position of a representative of the company’s employees.
Convening a General Meeting
- A general meeting shall be convened by the manager at least once every year.
- The manager shall also convene a general meeting upon the request in writing of the partners whose interests amount to at least one tenth of the capital. Should the manager fail to convene a general meeting within two weeks, the partners which have requested its convening shall be entitled to do so.
- The manager shall convene a general meeting immediately should the losses exceed one fourth of the registered capital, and also when the net worth of the company’s property under article 247a, paragraph (2) should fall below the amount of the registered capital.
Notice of General Meeting
- The general meeting shall be convened by a notice in writing received by each partner at least 7 days before the date of the meeting, unless the articles provide otherwise. The notice shall specify the business to be transacted.
- general meeting resolutions may be adopted in absentia when all partners have stated in writing their consent for the resolution.
Registration of Resolutions
- The general meeting resolutions which are related to the management and manner of representation shall be registered in the commercial register.
- Para 1 shall apply to the resolutions of the owner of a single person company.
- Resolutions related to amending or supplementing the Articles of Association or termination of the company shall come into effect after their entry in the Commercial Register. Increase or reduction of capital, admission or expulsion of a partner, transformation of the company, election or dismissal of a manager, as well as appointment of a liquidator shall come into effect after their entry in the Commercial Register.
Double tax treaties in force
- Bulgaria – Russia
- Bulgaria – Ukraine
