Have you ever heard the saying "no pressure, no diamonds"? That phrase perfectly frames the current situation in Portugal, a country that is a living lesson in economic recovery in the best European style.
After making the headlines in the world's leading economic newspapers for its terrible situation during the European financial crisis, Portugal is again stealing the spotlight from the international economic scene, but this time for entirely different reasons.
Today, Portugal is an example of economic growth and improvement among the European Union countries, and frankly, in the whole world.
The excellent performance of the Portuguese economy has surprised many institutions. The country has practically ended its deficit, has begun to reduce its public debt, and economic inequality is at a minimum in recent years. It has brought the unemployment rate to 2004 levels.
A combination of several factors (past and present, external and internal) has allowed this small country's economy to grow at a solid pace after being rescued in 2011 and suffering a severe crisis in 2012 and 2013. In addition, Portugal has complied with the International Monetary Fund by returning the bailout early, which has probably also contributed to the more intense praise from the IMF.
Of course, Portugal has the best Golden Visa program in Europe and one of the EU's best free zones in Madeira.
In fact, Portugal is simply one of the best destinations in Europe for family offices for varied reasons:
- Excellent life quality. Portuguese is the official language, but Spanish and English are widely spoken; the population is well-educated and is one of Europe's safest countries.
- The Madeira International Business Centre. Imagine having the possibility of establishing a trading or holding company with just a 4% corporate tax rate and exemption on dividends… In the EU. That is what the IBCM brings.
- Madeira trusts. Portugal is a civil law jurisdiction that allows you to register trusts. How? Simple: you can choose the trust law of your liking and incorporate it in Madeira.
- The Golden Visa program is widely considered the best in Europe. It is flexible, relatively affordable, and you can recover the investment thanks to our experts' plans.
Mundo's country rating is essentially a freedom index whereby our team of specialists rates a combination of freedoms, including freedom from violence and personal attacks, financial freedom from high taxes and other government levies, and business freedom from government interference.
Madeira was not populated when Portuguese voyagers discovered it in the 15th century.
And 600 years later, the marvels of this islands are still undiscovered.
Madeira is immediately associated with romance, its gorgeous port, and its mouthwatering cuisine. Yet, for those who know the arcane mysteries of corporate structuring, Madeira holds a more significant meaning.
Of course, we are talking about the Madeira International Business Centre. This is, by far, one of the best, if not the best, free economic zones in Europe. A 5% corporate tax rate with no other significant withholding or dividend taxes.
And no, it is not too good to be true. Madeira is a first-level corporate destination.
- Privileged access to the European trading, financial and payment entryways through Portuguese bank fully compliant with substance requirements thanks to your duly-licensed and compliant corporate structure in Madeira.
- Taxes are lower than many midshore jurisdictions like Cyprus and Hong Kong and only slightly higher than some offshore jurisdictions but without the blacklisting
- A low-cost yet knowledgeable labor force. With a minimum investment of €75,000 you only need one employee, and if you have six (we can help you with the headhunting), you will not have to comply with any minimum investment requirements.
- Madeira is accepted by the OECD as an onshore compatible free trade zone. This means that payments in and out will not be as scrutinized as a blacklisted jurisdiction.
- Madeira is perfect as a second home and office destination. You have a welcoming local population, it is a gorgeous place, it is relatively low-cost, and it is almost free of COVID-19.
The home of Cristiano Ronaldo is best-known for its natural beauties, like Cape Girão.
Yet, avid investors love Madeira for other reasons: its trust regime.
As we have said, madeira is an autonomous region of Portugal. When Portugal joined the CEE (today EU) it agreed with the European Commission that Madeira would offer tax benefits to attract international investment. This gave birth to the International Business Centre of Madeira (IBCM).
Along with this, the Portuguese government created another amazing, and somewhat hidden benefit: a trust regime.
And if you know a bit about asset protection, you are probably wondering how, if Portugal is not a common law jurisdiction, can you establish a trust?
That is a fair question to ask. Portugal is a civil law jurisdiction, meaning its regular legislation does not regulate trusts. Thus, the government came up with a Decree-Law that authorized a trust regime with a creative solution that would not hinder the civil law regulations: When a settlor creates a trust and registers it in Madeira, they must designate the law that will regulate the trust (which can be changed in time without prior authorization). The settlor must designate the jurisdiction that will regulate the trust in the trust deed and can change the law that will establish the interpretation and administration of the vehicle.
Therefore, for example, you can protect your assets by using Nevis’ trust law and settling it in Madeira, giving you the perfect balance between the best trust law in the planet and Portugal’s network of double tax treaties.
Portugal is tough against offshore jurisdictions, but if there is no income deriving from its blacklisted jurisdiction and the main purpose of the trust is succession and asset protection, Nevis is your best choice.
If you want to play safe, our experts regularly work with the UK or Cyprus trust legislation.
This is an excellent benefit for those who want to protect their assets because it makes the Madeira trust a solid and flexible structure at once.
And, of course, as in the best jurisdictions, Madeira trusts are exempt from taxation on income received from shares, royalties, and interests, if they arise from whitelisted jurisdictions.
There are only a handful of places where wealthy families can establish a wealth management structure that will allow them to grow wealth in a tax-optimized environment while protecting their assets for future generations.
Further, if you wish to manage your wealth from Europe… Choices are even scarcer due to the high taxation, invasive policies, and difficult immigration regulations. And if you want a place friendly for foreigners and with little language and cultural barriers… You can count them with the fingers of one hand.
But today we present you with one of those lucky few: Portugal. The Portuguese Golden Visa program is widely considered the best in the world and Madeira was voted one of the safest islands in Europe and almost free of COVID-19, while it has one of the most beneficial trade zones in Europe.
The best-kept secret in Portugal is that Madeira is one of the best plan b destinations for family offices in Europe. Here’s why.
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