Madeira scores on tax
Madeira, the Portuguese island best known for its rich flora and fauna and as the birthplace of world footballer of the year, Cristiano Ronaldo, may soon be making a name for itself as a tax haven.
Entrepreneurs in the UK who are threatening to quit the country as a result of the latest tax changes targeting wealthy business owners are considering Madeira as a destination, alongside more predictable off shore centres such as Switzerland and the Channel Islands.
As well as a balmy climate, the island boasts an attractive 3% corporation tax and a double tax treaty between Portugal and the UK. Trevor Nicholson, a director at HSBC private bank, says: “The impracticality of moving countries is not justifiable for many of the UK’s wealthy. Instead, we’re getting a growing number of queries about the possibility of basing a small part of the business in Maderia, where there is no tax on dividends and personal and corporation tax is low.”
Madeira’s regime applies to new companies licensed and established in its International Business Centre to 2020. Companies also get exemption from withholding taxes on the distribution of dividends, royalties and interest payments.
Nicholson says owners of hedge funds and property companies are particularly interested in Madeira’s tax benefits.
High-profile hedge fund manager Crispin Odey and private equity boss Guy Hands recently added their voices to the chorus of wealthy business people threatening to leave the UK.
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