Madeira: This island offers low tax and easy access to Europe

Sovereign Confidential

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It’s no secret that I am a big fan of Puerto Rico’s tax incentives.

A remote territory of the United States, Puerto Rico has been plagued with problems as of late-- economic woes, brain drain and a devastating hurricane in 2017.

The island needed some help. But rather than try to centrally plan a recovery through government programs, they invited in productive individuals and private capital.

These tax incentives have been a lifeline, helping to diversify Puerto Rico’s lagging economy. As we recently wrote to you, the plan is working.

I am personally taking advantage of Act 20, where companies providing services to clients outside of Puerto Rico can lower their corporate tax rate to 4%-- almost unheard of in the world.

But Puerto Rico is not alone in its amazing tax incentives. Across the Atlantic, there is another island offering a very similar program.

We are talking about Madeira-- the autonomous region of Portugal located much closer to Africa than to Europe.

When we first learned about Madeira’s tax incentives, we wondered whether Puerto Rico just copied from its European counterpart (Madeira first enacted its legislation well before Puerto Rico did).

In Madeira, if you operate a company providing services to clients outside of Portugal, your corporate tax will be just 5%. And in many cases, you can take dividends tax-free, too.

Just like Puerto Rico, Madeira offers an amazing deal.

And Madeira-- being part of Portugal-- comes with all the benefits of doing business in the European Union: access to the European banking system, developed business infrastructure, no tax haven stigma... all while avoiding high European taxes.

If you’re interested, you might want to get started right away. Under the current legislation, you have until the end of 2020 to form your company. This ensures that you can lock in the 5% corporate tax rate until the end of 2027.

After that, due to pressure from Brussels, the program’s conditions may change significantly.

It’s no secret that I am a big fan of Puerto Rico’s tax incentives. A remote territory of the United States, Puerto Rico has been plagued with problems as of late– economic woes, brain drain and a devastating hurricane in 2017. The island needed some help. But rather than try to centrally plan a recovery…

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