Presentation of New Madeira and the tax benefits of Madeira

2. WHY NEW MADEIRA

3. INTERNATIONAL BUSINESS CENTRE OF MADEIRA
NEW MADEIRA
_framework
_our company
_principles
_our strategy
_activities
_our services
_tax regime
_certainty
MADEIRA _key-factors
_benchmarking
_general framework
_institutional framework MAIN OPPORTUNITIES
_other characteristics
CONTACTS

4. NEW MADEIRA
_our company
New Madeira Investment Serviços, S.A. is an independent company that operates
since 1990 in the ambit of Madeira’s IBC, resulting from a spin-off of the largest law
firm in Madeira.
New Madeira has:
• Experience and know-how in the four main areas of the IBC
• A global portfolio of clients, including leading multinational companies
• A long-standing cooperation with multinational professionals, law and consulting firms
• Experience in the implementation and management of all kinds of structures, including e-
business and industrial projects
• Effective management and know-how in Madeira
• All services are provided locally
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5. NEW MADEIRA
_our strategy
Mission
To add value to its customers, partners, staff-members and shareholders through the
provision of professional services that facilitate the implementation of successful companies
in Portugal.
Our Vision
Management company of reference in Portuguese market and market leader in Madeira
Strategic Values
Customer’s satisfaction, integrity, excellency of services and innovation
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6. NEW MADEIRA
_ our services
New Madeira provides all services necessary to efficiently implement any structure in
Madeira:
• Incorporation and registration of companies
• Registered office and respective services
• Companies’ management and administration
• Fiduciary services
• Bookkeeping and all related legal formalities
• Tax planning, legal and financial advice
• Consultancy and assistance for implementation of investment projects
• Services aiming at facilitating the creation of substance (offices, equip., human resources, etc.)
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7. NEW MADEIRA
_ our services
New Madeira provides all services necessary to guarantee the good integration
of investors and respective collaborators in Madeira:
• Visas and other entrance formalities
• Tax planning
• Translators and interpreters
• Assistance in whole process of setting up personnel plus respective families in
Madeira, including:
• Domestic services
• Insurance, health and social security procedures
• Real Estate / Housing
• Schools
• Social networking

8. MADEIRA _ general framework
• Portuguese Region located in the Atlantic Ocean, 1h20m off Lisbon
• Same time zone as London
• A modern economy based in International Services
(Tourism: 28% and International Business Centre of Madeira: 21%)
• GDP per capita and productivity rate above national average
• Wager in simplifying procedures and e-government
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9. MADEIRA _ general framework
• Modern infra-structures
• Political and social stability
• Local University with international partnership programs (ex: Carnegie Mellon)
• Highly specialized and efficient professional services providers
• Qualified workforce, proficient language skills
• Aptitude in attracting external human resources
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10. MADEIRA _ institutional framework
• Autonomous Region of Portugal
• Portugal is a member-state of the European Union (EU) for more than 20
years
• Portugal is a member of the OECD
• Own Parliament, democratically elected, with legislative powers
• Regional Government nominated by the Parliament
• Autonomous Tax Administration with extensive powers, including that of
issuing “rulings”
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11. MADEIRA _ other characteristics
• Quality of life
• Safety, reduced criminality
• Mild climate
• Natural beauty
• Reduced operational costs
• Good Hotel and Housing facilities
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12. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ framework
The International Business Centre of Madeira (IBC) is an instrument of
economic development of Madeira
Created with the goals of:
• Modernizing, diversifying and internationalizing the productive structure of
goods and services of the Region;
• Compensating structural weaknesses resulting from the reduced size of the
internal market and from the ultra peripheral status of Madeira
Through the granting of tax benefits as a way to attract
Foreign Direct Investment
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13. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ principles
The IBC was created with the following basic principles:
Full integration in the Portuguese legal order
- Activities of the IBC are subject to the same regulations and supervision applicable at
national level
Full integration in the European Union
- Preferential tax regime (state aid) previously approved by the E.U.
- Total compliance with all EU treaties and law
- All principles of European Union Treaty are applicable to Madeira companies and their
investors, namely the principle of freedom of establishment and of provision of
services
- Free access to the European Internal market without discrimination
- EU VAT System is fully applicable
- Part of the European monetary system (reduction of operational costs, free movement
of capitals and elimination of exchange risk)
Competitiveness at global scale
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14. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ principles
Credibility:
Credible jurisdiction, approved by the EU and supported by the 27 member states
– not a tax haven
Safety:
The European Directives apply to Madeira, ensuring a modern legal framework
Transparency:
Not included in any of the official black lists issued by the international
organizations identifying the territories and regions qualified as tax havens; abides
by all criteria defined by the OECD in terms of transparency and exchange of
information.
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15. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ activities
Activities may be undertaken in the following sectors:
International Services
Trading, consultancy, technical and professional services, holding, telecommunications, e-
commerce and any other services of international nature
Industrial Free trade Zone
Industrial and warehousing activities, as long as they do not put at risk national health and
public order
International Shipping Register – MAR
Shipping activities, registration of vessels, commercial yachts and pleasure crafts
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16. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime
Madeira companies, licensed as from the 1st of January 2007, benefit from the following
tax regime:
At the level of the shareholders of the Madeira Company (MadCo)
– Exemption from withholding tax (WHT) on dividends and interests
– Exemption from capital gains tax on sale of shareholdings in the MadCo [1]
– Exemption on the proceeds of liquidation
At the level of the Madco
– 3% - 5% corporate income tax (CIT)
– Exemption from WHT
– Exemption from local and municipal taxes
– Exemption from stamp or capital duty
– Lowest VAT in Europe (14%)
– Exemption from notary’s and registration fees
_____________________________________________________________
[1] Not applicable to countries that form part of the black list (other exemptions apply even to such shareholders)
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17. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _ access conditions
Access conditions to the preferential tax regime:
• To be licensed by the Regional Government of Madeira
• Benefits to shareholders only accessible to non residents in Portugal
• Withholding tax exemption only accessible to payments to non residents in Portugal
• Corporate tax income reduction only applicable to income obtained outside Portugal
• Some substance requirements are applicable
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18. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _ substance requirements
Substance requirements:
1. At least one director or employee (resident or not in Portugal) in the payroll of the
company (part time or full time job).
2. Whenever less than 6 jobs created, minimum investment of Eur 75,000 in the purchase
of tangible or intangible fixed assets (not necessarily located in Madeira).
NOTES:
- Pure holding companies (SPGS) are not subject to such substance requirements.
- Requirement nr 1 must be fulfilled within the deadline of 6 months
- Requirement nr 2 must be complied within the course of the 2 first years
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19. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _ceilings
The tax benefit is limited to the following thresholds of the taxable profit:
Jobs Taxable Profit
1 to 2 Eur 2 millions
3 to 5 Eur 2,6 millions
6 to 30 Eur 16 millions
31 to 50 Eur 26 millions
51 to 100 Eur 40 millions
> 100 Eur 150 millions
___________________________________________________________
At present negotiations are underway with the EU Commission that aim at increasing the level of such thresholds
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20. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _old regime
Companies licensed before end of the year 2000 (old regime) are subject to the same
abovementioned tax regime, with the following differences:
– Full corporate tax income exemption up to the end of 2011
– Substance requirements are not applicable
In 2012, such companies will automatically migrate into the new regime, being subject to
4% CIT in 2012 and 5% from 2013 until 2020
____________________________________________________________
[1] It is still possible to purchase companies benefitting from such tax regime
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21. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _tax rates
This graphic shows an evolution of the CIT rates of the old and the new tax regime:
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22. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ tax regime _ double tax agreements
In general, the double tax treaty network signed by Portugal applies to the IBC of Madeira:
Algeria Austria Belgium Brazil Bulgaria Canada Cape Verde
Chile China Cuba Czech Denmark Estonia France
Republic
Finland Germany Greece Guinea Holland Hungary Iceland
India Indonesia Ireland Israel Italy Latvia Lithuania
Luxembourg Macao Malta Morocco Mexico Mozambique Norway
Pakistan Poland Romania Russia Singapore Slovakia Slovenia
Spain South Africa South Korea Sweden Switzerland Tunisia Turkey
UK Ukraine USA Venezuela
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23. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ certainty
Considering:
• Preferential tax regime approved by the EU and approved until the end of 2020
• Possibility of extension of this deadline (after negotiation with the EU)
Certainty
Whatever the circumstances, no exit costs
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24. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ key factors
Choosing a jurisdiction
Madeira Strengths
Key factors:
•EU jurisdiction
•Regime previously approved by the EU
CREDIBILITY AND SAFETY
•Part of the Portuguese legal order
•EU Directives apply to Madeira
•Not blacklisted
TRANSPARENCY
•Abides by all OECD criteria
•0-5% CIT
•Exemption from WHT
TAX REGIME
•Lowest VAT in Europe
•Double tax treaty network
CERTAINTY •Regime approved by the EU until end of 2020
•International Business Environment
•Professional and efficient services providers
OTHER CONSIDERATIONS
•Qualified human resources 24
•Modern Infrastructures

25. THE INTERNATIONAL BUSINESS CENTRE OF MADEIRA
_ benchmarking
Comparing Madeira with other EU jurisdictions:
• More competitive, simple and straightforward tax regime
• State aid package previously approved by the EU
• Certainty until the year 2020
• Possibility of obtaining rulings with competitive margins
• Lower operational costs
• Madeira has never been considered a tax haven by any relevant international organization (when
compared to Malta or Cyprus)
• Mature legal system tested in Courts (when compared to Malta or Cyprus)
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26. MAIN OPPORTUNITIES
Effective structures using Madeira:
• Trading
• Holding
• Exit Strategy
• Intra-group financing
• Intellectual property (IP)
• E-business and telecommunications
• Holding immovable property and other assets
• Shipping
• Import of yachts and chartering operations
• Other efficient structures

27. CONTACTS
Please do not hesitate to contact us:
New Madeira - Investment Serviços, SA
Rua Dr. Brito Câmara, nº 20 - 1º
9000-039 Funchal
Madeira - Portugal
Tel.: +351 291 210 200 – Fax:+351 291 210 209
newmadeira@newmadeira.com
www.newmadeira.com