Industrial Free Trade Zone: Production, Assembling and Warehousing

Although any manufacturing or warehousing activity may take advantage of the operational and tax conditions on offer, the Industrial Free Trade Zone is a particularly attractive location for the following sectors:

 

Logistics and distribution: its strategic location in the Atlantic Ocean and within the island itself, makes the IFTZ a prime location for setting up distribution activities. In fact, Madeira has regular sea cargo connections on a twice-a-week basis with Lisbon, on a weekly basis with New York, and every fortnight with European ports such as Bremen, Hamburg, Antwerp, Felixtowe, Rotterdam and London. The international airport has several daily flights to Lisbon and other European cities, such as London and Paris. Additionally, the location of the IFTZ next to the main commercial port, beside the island’s main motorway, and only 8 km from Madeira’s international airport, makes it a logical choice for the establishment of warehousing and distribution activities for the whole island;

 

Natural products: Given its climate and soil, Madeira boosts excellent conditions for the cultivation and supply of medicinal plants. The development of organic agriculture has become one of the priorities of the Regional Government and adequate support services have been created in this sector, such as a natural park, specialized laboratories, and a local university with a strong tradition in biology;

 

Tourism-related goods: The existence of over 1,000,000 tourists a year creates attractive marketing possibilities for various products linked to the hotel industry. As a matter of fact, amenities, such as shampoos and soaps, bakery and pastry, as well as paper and plastic products have a large demand by the local hotel industry.

 

These are just a few examples of how manufacturing and logistical companies may benefit from the advantages offered by the IFTZ. Other examples come from the more than 50 companies of various origins presently operating in the IFTZ or in the process of setting up. The scope of activities carried out range from fish-processing and food products to cosmetics, cleaning and electronic goods. 

All types of companies and other forms of corporate representation, such as branches, agencies or offices, foreseen in Portuguese company law, may set up in the IFTZ, provided that the activities described in Article 36º of the Portuguese Tax Incentives Statute and the conditions defined therein are met.

 

A formal application, in Portuguese, to operate in the Industrial Free Trade Zone must be submitted to S.D.M., in duplicate, addressed to the Cabinet of the Regional Secretary for Planning and Finance of the Regional Government of Madeira. 

 

The licence may be requested by an existing company, in Portugal or abroad, by a branch or by a company to be incorporated.

  

In case a new company is formed, the incorporation procedures are identical to those applicable to any other Portuguese company. In order to speed up the process, a Private Commercial Registry has been created for such purpose.  

 

The licence application must be submitted in accordance with article 17º of the Regulation approved by the Regional Regulatory Decree nº 21/87/M, of the 5th of September, and Article 36º of the Portuguese Tax Incentives Statute. The application must indicate the statistical classification of the economic activity (NACE code) to be undertaken in the IFTZ, the total investment to be undertaken and the number of jobs to be created.

 

Together with the licence application, the applicant must also initiate the industrial licensing process, which will take place simultaneously. In this process, the activity to be set up in the IFTZ will be classified, according to Portuguese law, in terms of its complexity, which will determine the level of information to be submitted through a descriptive memorandum and statement of reasons which normally includes the following items:

 

Companies may choose to set up in a pre-built S.D.M. module or pavilion, or in an infra-structured plot, with access to energy, water and sewage connections. In order to guarantee the availability of the chosen area or building in the IFTZ, its reservation may be formally requested to S.D.M.. The period of reservation may not exceed two months. 

 

In the case of a successful application, the licence is deemed to be granted in favour of the company once the applicant furnishes proof of the formation and registration of such company. All documents in support of the licence application must be duly translated into Portuguese and legalised. The licence is granted for a minimum period of five years.

 

Once the licence has been granted, the user shall give a guarantee in favour of S.D.M. for the fulfilment of the obligations therein assumed. The Cabinet of the Regional Secretary for Planning and Finance shall set the value of the guarantee.

 

Companies operating in the IFTZ will be subject to a licence fee of 1.000 euros and an annual operating fee which shall be calculated according to the area required and paid on issue of the licence for the first year and on January thereafter. For an infra-structured platform or plot, the amount due shall be determined on the basis of the following scale:

Area	Applicable Fee
Up to 2.500 m2	12,5 euros/m2
Additional section of 2.501 m2 up to 5.000 m2, inclusive	11 euros/m2
Additional section of 5.001 m2 up to 10.000 m2, inclusive	9,5 euros/m2
Additional section of 10.001 m2 up to 20.000 m2, inclusive	8 euros/m2
Additional section above 20.000 m2	7 euros/m2

 

Alternatively, if the investor requires an industrial module in an S.D.M. building, the annual operating fee will be charged in accordance with current market prices.

You may resort to our IFTZ Fees Calculator to determine the applicable annual fees to infrastructured plot areas in the IFTZ.