Published on and written by Cyril Jarnias
The archipelago of Madeira is attracting an increasing number of European entrepreneurs seeking to combine a pleasant living environment, a competitive tax regime, and a growing innovation ecosystem. But once the company is created, one question quickly dominates all others: how to finance the growth of your business on the island, without getting lost in the jungle of Portuguese, regional, European, and private mechanisms?
For a company based in Madeira, several financing levers are available: traditional banks, venture capital, grants from the “Madeira 2030” program, business angels, crowdfunding, and the specific advantages of the Madeira International Business Centre. This article aims to help build a realistic and optimized fundraising strategy for this territory.
Laying the Foundations: Structuring Your Company and Your Bank Account in Madeira
Before talking about fundraising, you must first talk about structure. In Portugal, and therefore in Madeira, having a Portuguese business bank account is not an option but a legal requirement for any company that wants to operate normally. Without this account, it is impossible to receive customer payments, pay salaries, declare and pay taxes, or access the main financing products.
Opening a business account requires gathering several documents: Certificate of Incorporation, Articles of Association (Estatutos), an extract from the commercial register (Certidão Permanente), and a tax identification number (NIF) for the company, its directors, and its shareholders. Foreign investors often use a local lawyer or accountant to obtain this NIF from the tax authorities.
To combat money laundering, most Portuguese banks require an in-person meeting with the director, necessitating a trip on-site. The main banks in Madeira, such as Caixa Geral de Depósitos, Millennium BCP, or Banco Santander, offer varying services and fees, including for non-residents.
Once this foundation is in place, the company can access credit, lines of credit, payment solutions, as well as certain public programs that require a Portuguese account as the disbursement channel.
How Banks Evaluate Your File
Whether you are applying for a “standard” loan, an investment loan, or financing through a peer-to-peer (P2P) lending platform, the logic remains broadly the same: the lender wants to know if you are able to repay. They therefore examine your annual accounts, your three-year forecasts, the clarity of your business plan, the quality of the team, and the available guarantees or equity.
Financial institutions assess your application by examining the business sector, the company’s stage of development (many refuse the very earliest stages without a guarantee), your payment history, and your level of indebtedness. To put together a good file, it is crucial to prepare it in advance with a coherent business plan, reasonable financial projections, and a precise justification for the use of the requested funds.
European rules also require banks to explain the credit score assigned to SMEs and to allow an appeal if the company provides new elements. In Madeira, as elsewhere in Portugal, it is therefore possible to contest a negative decision, but only if the file is solid from the start.
Taking Advantage of Public Schemes: “Madeira 2030”, DIGITAL Madeira, and Other Support
Madeira benefits from both national Portuguese mechanisms and regional programs specifically designed to support the island economy. For an entrepreneur, the difficulty is not so much finding aid as identifying the one that matches the right development stage.
“Madeira 2030 – Innovation”: Grants for Productive Projects
Among the flagship schemes is the Incentive System for Productive Innovation in the Autonomous Region of Madeira, often referred to under the label “Madeira 2030 – Innovation“. This is a non-repayable grant program aimed at productive investment projects, for both SMEs and large companies.
The principle is as follows: the company presents a project aimed at creating a new establishment, increasing its capacity, diversifying its production, or fundamentally transforming its manufacturing process. The activities must produce tradable or exportable goods or services with high added value, with an emphasis on innovation, sustainability, R&D, and skilled employment.
The aid is a non-repayable grant. A base rate of 25% is applied to eligible expenses, and this rate may be increased by several bonuses.
Here is a simplified summary:
| Parameter | “Madeira 2030 – Innovation” |
|---|---|
| Beneficiaries | SMEs and large companies |
| Area | Autonomous Region of Madeira (NUTS II) |
| Minimum eligible expense | €50,000 |
| Base rate | 25% of eligible expenses |
| SME bonus | +10 percentage points |
| Skilled job creation bonus | +5 points |
| Area bonus (Porto Moniz, São Vicente, Santana, Porto Santo) | +5 points |
| Grant ceiling (non-tourism sectors) | €500,000 |
| Grant ceiling (tourism) | €750,000 |
Eligible expenses include tangible assets (machinery, computer equipment), intangible assets (patents, licenses, software), as well as certain ancillary costs such as studies, marketing plans, architectural projects, or accounting and audit fees. In tourism, non-polluting vehicles at the core of the activity may also be accepted.
Construction or renovation work is regulated: depending on the sector and location, it cannot exceed between 30% and 60% of total expenses. The idea is to avoid essentially subsidizing bricks and mortar, to the detriment of innovation or moving upmarket.
DIGITAL Madeira: Accelerating the Digital Transformation of Very Small to Medium-Sized Enterprises
The health crisis triggered a specific program, REACT-EU: DIGITAL Madeira, targeting micro, small, and medium-sized enterprises. The aim is to help regional businesses catch up on their digital lag and prepare for a green, digital, and resilient recovery.
The scheme funds up to 60% of eligible expenses as a non-repayable grant.
| Company Size | DIGITAL Madeira Ceiling | Grant Rate |
|---|---|---|
| Micro-enterprise | €25,000 | 60% |
| Small enterprise | €40,000 | 60% |
| Medium-sized enterprise | €50,000 | 60% |
| Minimum ticket | €5,000 | 60% |
Eligible investments include computer hardware, digital storefronts, software, e-commerce, machine-to-machine (M2M) interfaces, Manufacturing as a Service tools, or smart production systems. Costs for preparing the file and those related to validation by an accountant or auditor are also covered, up to modest amounts.
For a shopkeeper in Funchal who wants to launch an online store and automate their logistics flows, or for an industrial SME wishing to equip its factory with a digital twin, DIGITAL Madeira can fund a significant part of the project.
Other Public Support: IDE, IEM, IAPMEI, Turismo de Portugal
Beyond these flagship programs, several institutions play a structuring role in financing and supporting businesses in Madeira:
Overview of the main public institutions that support businesses and projects in the Autonomous Region of Madeira, through various sectoral schemes.
Manages support schemes for the secondary and tertiary sectors of the regional economy. It is behind the Call Madeira initiative, in partnership with the regional government.
Leads job creation programs and funds measures to support hiring unemployed youth or specific profiles.
Handles the primary sector (agriculture, fisheries, forestry) and has its own dedicated support lines.
At the national level, this body is the intermediary for many incentive systems for innovation, qualification, and internationalization of SMEs.
Strongly supports innovation in tourism through venture capital, real estate investment, and mutual guarantee companies. Has a direct impact on the many tourism startups based in Madeira.
To identify the right window, the practical tools are often the national financing portal (Financiamento PME) and the Balcão dos Fundos platform (replacing Balcão 2020), where open calls for projects and detailed notices are published.
Betting on “Vouchers” and the Startup Portugal Strategy
Beyond the major regional programs, companies in Madeira can benefit from the national Startup Portugal strategy, which deploys a whole range of mechanisms, from the idea stage to the scale-up stage. Several of these measures are directly accessible from the archipelago.
Vouchers for Startups: Funding Your First Developments
The “Vouchers for Startups – New Green and Digital Products” target young companies (up to 10 years old) that develop digital models, products, or services contributing to the climate transition. This covers resource efficiency, pollution reduction, the circular economy, new energy solutions, or the use of open data and artificial intelligence.
The maximum grant is €30,000 per beneficiary, for projects across all Portuguese territory (mainland, Madeira, and the Azores). The overall envelope is €90 million, of which €45 million has already been committed in a first wave. To apply, you must contact Startup Portugal and respond to a notice that details eligible expenses and selection criteria: innovation, market potential, team quality, and environmental impact.
For a software startup based in Madeira developing an energy management platform for hotels, or an AI tool for optimizing tourist flows, this voucher can be a significant lever to finance the MVP phase without diluting equity.
Startup Portugal+: A Toolkit for All Stages
The Startup Portugal strategy has been enriched with a very comprehensive “+” program, targeting both entrepreneurs at the idea stage and startups ready to expand internationally. A few key instruments to keep in mind when based in Madeira:
Portugal, including the Madeira region, offers several programs to support startups and innovation. The **Startup Voucher** is a monthly stipend with mentoring, mainly for those aged 18-35, up to €5,000 for living expenses. **Incubation Valley** allows young companies to purchase services from certified incubators like Startup Madeira. The **Pitch Voucher** facilitates connections between large companies and startups via a challenge platform. **ADN Startup** is financial support to strengthen young companies’ capital. The **Tech Visa** is a label simplifying the recruitment of talent from outside the Schengen area. Finally, **Call MVP** specifically supports the development and commercialization of minimum viable products in the digital, engineering, and manufacturing sectors.
These measures do not replace regional aid, but complement it. An effective strategy for an entrepreneur in Madeira often involves combining support like Startup Voucher or Vouchers for Startups for the ideation/MVP phase, then “Madeira 2030 – Innovation” financing for industrialization and scaling up.
Raising Funds from Investors: From Venture Capital to the Regional Fund
Grants and loans are not always enough, especially in technology or highly international sectors. Madeira is increasingly integrated into the Portuguese and European venture capital circuits. Several vectors deserve particular attention.
Portugal Ventures and Call Madeira: The Natural Gateway
Portugal Ventures, the venture capital firm of the Banco Português de Fomento group, is a central player on the Portuguese VC scene. It invests in pre-seed, seed, and Series A, with a focus on software, IT, and health, and invests mainly in Portugal, but also in the United States and France.
For the archipelago, one initiative plays a pivotal role: Call Madeira. Launched by the Instituto de Desenvolvimento Empresarial and the regional government, in partnership with Portugal Ventures, this operation aims to facilitate access to venture capital for innovative projects based in the Autonomous Region of Madeira.
The main characteristics of Call Madeira are:
| Criteria | Details |
|---|---|
| Targets | Companies in Pre-seed, Seed, or Startup phase |
| Location | Activity in Madeira (or plan to establish in Madeira) |
| Maximum Age | 3 complete fiscal years |
| Priority Sectors | Life Sciences, Tech (SaaS, marketplaces, travel tech), Blue Economy, endogenous resources, energy, agrifood, forestry industry, nanotechnologies, and materials |
| Investment Amount | Up to €200,000 per company/project |
Portugal Ventures has already invested via Call Madeira in several local startups, including Floating Particle (cleantech, waste management, IoT, data, machine learning), Plutospetfood, and FootAR. The cumulative amount of investments via Call Madeira in the Madeiran economy is close to €690,000, for these first cases alone, showing that the mechanism is concretely working.
For a local startup, the challenge is to meet the standards of a national fund: demonstrable traction, ambition for scalability, a complementary team, and sector alignment with the fund’s priorities.
A Future Venture Capital Fund Specifically for Madeira
The regional government is not content to attract national funds; it has announced the creation of its own venture capital fund, as part of a plan to restructure business support systems. The Regional Secretary for Economy and Digital Transformation, Eduardo Jesus, has confirmed that this vehicle is among the priorities of the Startup Madeira action plan.
The idea is twofold: provide direct support to new projects and already established companies that want to grow, and fill the “financing gap” experienced by many high-potential technology projects before profitability. This fund is part of a broader strategy to transform Madeira into a digital hub in the Atlantic.
For an entrepreneur, this means that in the medium term, the range of accessible investors from the island will broaden, with a regional player able to co-invest alongside funds like Portugal Ventures, Indico Capital, or Armilar.
Other Active Funds in Portugal
Madeira is not isolated from the rest of the country. A company registered on the island can certainly interest funds from Lisbon or Porto, as long as it meets their investment theses. Among the important players:
Overview of the main venture capital players in Portugal, active in technology and industrial sectors.
Active across several technology and industrial verticals, it is a historic player in the Portuguese ecosystem.
Considered one of the leading Portuguese VCs, with over 20 years of experience and a fourth fund of €120 million (Armilar IV).
The country’s first independent venture capital firm. Manages a new €125 million fund (Indico VC Fund III), focused on Southern Europe.
The private equity arm of Caixa Geral de Depósitos. Manages over €700 million with a portfolio of more than 80 holdings.
These structures generally invest above €200,000, often in syndication with other investors, and can co-invest with business angels or public co-investment funds set up by Portugal.
For a file based in Madeira, the key is to demonstrate that insularity is not a handicap but rather an asset (market testing on a pilot territory, proximity to tourist flows, privileged access to the MIBC, etc.), while showing an ability to serve larger markets (mainland Portugal, the EU, even beyond).
Playing the Business Angel and Investor Network Card
In Europe and elsewhere, business angels play a crucial role in early-stage rounds. Portugal has a federation body, Investors Portugal, which brings together the various players in early-stage investment: venture funds, corporate ventures, incubators, accelerators, and private investors.
Although no specific business angel network is cited for Madeira, local structures like Startup Madeira are integrated into the national ecosystem via Startup Portugal. Thus, a project incubated in Funchal can access national pitch events like “Pitch Day” Investors Portugal, where it meets business angels and venture capitalists.
More broadly, the European landscape is full of very active networks (FiBAN in Finland, Med Angels for the Mediterranean, EstBAN in Estonia, IBAN in Italy, etc.). Some of these groups, notably pan-regional ones like Med Angels, are specifically designed to facilitate cross-border investments in areas like the Mediterranean rim, which includes Portugal and potentially Madeira.
For an entrepreneur on the island, the typical approach is to: identify a market opportunity, develop a business plan, seek funding, launch the product or service, and evaluate performance.
– work on your deck in English and Portuguese;
– go through the incubator (Startup Madeira) to access pitch events;
– use community platforms that aggregate profiles of 40,000 business angels and 69,000 fund partners worldwide, with filters by sector, region, ticket size, etc.
Using these databases makes it possible to target investors who have already funded comparable projects (tourism, island cleantech, data for smart cities, etc.) and maximize the chances of a coherent “match“.
Crowdfunding and Crowdlending: A Serious Alternative
The Portuguese crowdfunding market has structured itself rapidly, with around forty platforms, about twenty of which are truly active and regulated. Madeira, though an island, is fully integrated into this market, as the main platforms operate online across the entire territory.
P2P Lending and Equity: A Rich Landscape
The report highlights that Portuguese crowdfunding is dominated by two models: peer-to-peer lending (P2P) and equity crowdfunding. Investment tickets range from a few euros to over €100,000, with an average investment of around €5,000 per project. Announced interest rates typically vary between 4.2% and 22.5%, with an average of around 12.4%. Many platforms charge few or no fees to investors.
Among the relevant players for a Madeiran company:
Raize is the emblematic platform for SME lending, with a minimum ticket of €20 and a secondary market. GoParity specializes in sustainable projects with tickets from €5 and 0% fees for investors. Pan-European platforms like Debitum or TWINO also offer P2P debt solutions, sometimes with guarantees and regulation in other EU countries.
For a Madeiran company, the advantage of P2P is twofold: obtaining more flexible financing (often between €10,000 and €250,000) and testing the market’s appetite for its project. Registration is done online, with deposit of accounts, project description, creation of a campaign page, and, for secured loans, presentation of guarantees and collateral.
Donation and Reward Crowdfunding: For Creative or Community Projects
Alongside investment models, Portugal also has donation and reward platforms. PPL.pt is the main reward-based crowdfunding platform still active, based in Lisbon, which has already helped raise over €4.6 million for nearly 500 projects, with more than 134,000 contributors. For cultural projects, associations, or product pre-sales (limited edition, unique tourism experience, etc.), PPL remains a credible option.
International platforms such as Kickstarter, Indiegogo, GoFundMe, and Crowdcube are accessible to Portuguese project owners. They are particularly relevant when the target audience is international, for example, for a video game developed in Funchal or a SaaS solution aimed at a global market.
Crowdfunding does not replace professional funding rounds, but it can serve as a launching pad, proof of traction (number of backers, pre-sold amounts), and a communication lever.
Leveraging the Incubation Ecosystem: Startup Madeira at the Heart of the Game
In Madeira, the pivotal player in the entrepreneurial scene is Startup Madeira. Founded in the late 1990s and rebranded in 2016, the structure is attached to the regional government (Secretariat for the Economy) and is recognized at the European level as a Business Innovation Center (EBN label). It is part of the National Network of Incubators (RNI) and the TecParQUES association of Portuguese science and technology parks.
Startup Madeira has three centers: the main one is at Campus da Penteada, near the University of Madeira, specializing in technology and research projects. A second center in downtown Funchal hosts digital companies and international programs like the Madeira Startup Retreat. A third center is located in Ribeira Brava.
The incubator offers: personalized mentoring, technical resources, and access to a network of experts.
– physical space (offices, coworking) or virtual;
– administrative services;
– mentoring and advice;
– connections with accountants, lawyers, local, national, and international partners;
– ideation and acceleration programs, including in schools;
– hackathons, thematic conferences, workshops.
The main areas of interest cover IoT, energy, augmented reality, web solutions, mobility, social and environmental impact, health, wellness, creative industries, big data, and cybersecurity. Startup Madeira is also very active in the Blue Economy and tourism sectors, in line with the island’s geographic specificities.
To raise funds in Madeira, being incubated is not mandatory, but it is often an accelerator: the incubator opens doors to national calls for projects, European programs, local banks, business angels, and VCs from Lisbon or Porto, not to mention thematic acceleration programs like the Madeira Startup Retreat (an international initiative dedicated to tourism and travel).
Optimizing the Tax Framework: The Advantage of the Madeira International Business Centre
Raising funds is also about reassuring investors about the net profitability of projects. In this regard, Madeira has a very specific advantage: the Madeira International Business Centre (MIBC), also known as the Free Trade Zone or International Business Center of Madeira.
This regime, approved by the European Commission, is not an opaque tax haven but an authorized aid scheme for an outermost region. It offers certain companies, subject to real substance conditions, a corporate income tax rate of 5% on their qualified income, compared to 14.7% for the standard regional rate (or 11.9% on the first €50,000 of profit for SMEs).
The main conditions for benefiting from this preferential rate are:
– obtain an MIBC license before the end of 2026;
– effectively start the activity within six months (one year for industrial, maritime, or aviation activities);
– create between 1 and 5 jobs within the first six months with a minimum investment of €75,000 in fixed assets within the first two years, or 6 or more jobs within the first six months;
– comply with profit ceilings taxable at 5% based on the number of jobs created (e.g., €2.73 million for 1–2 jobs, up to over €205.5 million for more than 100 jobs).
The regime provides an 80% reduction on stamp duty, the real estate transfer tax (IMT), the municipal property tax (IMI), and local surcharges, subject to conditions. Dividends paid to non-resident shareholders (excluding non-cooperative jurisdictions) are exempt from withholding tax, as are interest and royalties related to MIBC activity paid to non-residents.
For a foreign investor, the prospect of receiving dividends from a Madeiran company that are almost exempt from withholding tax and lightly taxed at the company level is a strong argument. For a founder, this can translate into a higher valuation or an increased ability to reinvest profits.
Combining Sources: A Financial Engineering Specific to Madeira
In practice, few companies finance themselves with a single instrument. In Madeira, combining several levers is often the key to reducing the cost of capital while limiting dilution.
A few examples of possible structures:
For a digital startup in the ideation phase: use of the Startup Voucher (6-12 months), incubation via Startup Madeira, market testing through reward crowdfunding (PPL), then Vouchers for Startups for the MVP. For an industrial SME in modernization: Madeira 2030 grant for machinery/software, DIGITAL Madeira for the digital component, bank loan with public guarantee and leasing for equipment. For a travel tech startup: acceleration via Madeira Startup Retreat, support from Turismo de Portugal, fundraising (seed round) with Portugal Ventures (Call Madeira) and a co-investor, tax optimization via MIBC. For a renewable energy project: combination of a grant (Portugal 2030 or Madeira 2030) with debt via GoParity and equity crowdfunding on a specialized European platform.
The essential logic is to combine non-dilutive aid (grants, subsidized loans, guarantees, tax incentives) and equity (business angels, VC, equity crowdfunding) to retain maximum control while giving the company the means to achieve its ambitions.
Building Your Fundraising Journey in Madeira
Raising funds in Madeira is not an exotic exercise reserved for specialists. On the contrary, the territory offers a rare density of public, semi-public, and private tools for an island region of this size. But this richness has a downside: you need to know how to prioritize, structure yourself, and often get support.
A realistic action plan for an entrepreneur might look like this, without being exhaustive: 1. Market analysis to identify opportunities and threats. 2. Development of a prototype or minimum viable product. 3. Preparation of a financial plan for funding and cost management. 4. Implementation of a marketing strategy to promote the product. 5. Establishment of partnerships to broaden market reach. 6. Continuous evaluation and adjustments based on customer feedback and market performance.
To develop a startup in Portugal, it is essential to: secure the legal structure, Portuguese bank account, and tax obligations; join an incubator like Startup Madeira to access the ecosystem and programs; map out the available aid according to your stage (Startup Voucher, Vouchers for Startups, Madeira 2030, DIGITAL Madeira, etc.) and build a schedule of applications; prepare a robust, bilingual business plan with conservative forecasts, ready to be presented to a bank or a VC; test the market and visibility through a crowdfunding campaign (PPL, Raize, GoParity depending on the model); approach institutional investors (Portugal Ventures, Indico, Armilar, etc.) with a suitable file, possibly via a program like Call Madeira; consider applying for MIBC if the model justifies it, to maximize tax efficiency and strengthen the project’s appeal to international investors.
In this journey, Madeira is not just a sunny backdrop, but a real lever: advantageous taxation, targeted grants, an active incubator, government initiatives for venture capital, gateways to the rest of Portugal and Europe. Provided you read the rules of the game well, a company can find a particularly fertile financing ground there.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
