Madeira’s IBC Regime Extended Until 2033

On 20th November 2025, the Portuguese Parliament approved the extension of the preferential tax regime of Madeira’s International Business Centre (IBCM), allowing licensed companies to continue benefiting from a corporate income tax rate of 5% until 2033, among other available advantages.

As a result of this extension, all companies licensed to operate within the IBCM by the end of 2026 will be able to benefit from this preferential tax regime for an additional period of five years beyond what was previously established, thereby ensuring stability and predictability —key aspects in the decision-making process by investors.

It should be recalled that Madeira benefits from the EU State aid regime for the operation of companies insofar as, under the Treaty on the Functioning of the European Union, its permanent constraints as an outermost region are formally recognised, namely insularity, the small size of its internal market, isolation, and economic dependence on certain products.

The establishment of this regime intends to promote Madeira’s economic development and diversification, enabling the attraction of foreign investment with the objective of overcoming the natural challenges inherent to its outermost status.

Companies licensed to operate under the IBCM benefit from a reduced corporate income tax rate of 5%, one of the most competitive in the European Union. This reduced rate is subject to meeting certain substance requirements, namely local job creation and a minimum investment of €75,000. The reduced rate is further limited by caps set by the European Commission, in line with the number of jobs created. The regime also establishes a set of other advantages, among which the exemption from withholding tax on the distribution of dividends to shareholders of companies licensed and operating within the IBCM.

For more information:
commercial@sdm.pt