Published on and written by Cyril Jarnias
For a long time, the question “where to create an offshore company?” almost always led to the same answer: an exotic island, plenty of discretion, and very little tax. In 2026, that model has largely blown up. Between international tax transparency, beneficial ownership registries, and substance rules, the opaque setup in a tax haven has become high-risk.
Yes, it is possible to create a company in Madeira remotely, through onshore solutions with reduced taxation. But note: this is no longer a classic offshore setup, because the Madeira regime requires real economic presence (office, employees, substantial activities) to benefit from the tax advantages.
An analysis of the Portuguese tax laws and regimes reveals a much more nuanced reality than the marketing talk. It is possible to incorporate a company remotely and benefit from very attractive taxation, but this happens within a framework fully integrated with the European Union, the OECD, and anti-money laundering rules.
Portugal, “offshore” or a jurisdiction with favorable taxation that is perfectly onshore?
The first mistake in approach is to put Portugal on the same level as a traditional tax haven. Portuguese law does not even speak of “offshore companies” but rather of specific tax regimes, all integrated into the general tax code, controlled by national authorities, and governed by European rules.
The standard corporate income tax rate in Portugal for residents in 2026, scheduled to drop to 18% in 2027 and then 17% in 2028.
Portugal has also transposed the major building blocks of international transparency: exchange of information (CRS), DAC6 directive, central register of beneficial owners (RCBE), substance rules, and now the OECD’s Pillar Two for groups whose consolidated revenue exceeds €750 million, via a 15% minimum tax.
In other words, creating a company in Portugal with the idea of completely escaping tax and any transparency obligation is an illusion. On the other hand, structuring an international business within a low-tax framework recognized by the EU and equivalent to a treaty is possible, particularly thanks to the Madeira regime.
Madeira: international business center, not a “tax haven” in the legal sense
Madeira often crystallizes “offshore” fantasies. Legally, the reality is different. The archipelago is an autonomous region of Portugal, and therefore a member of the European Union. Its tax regimes are Portuguese regimes, applied under Lisbon’s control, reviewed by the European Commission under state aid rules, and completely absent from blacklists.
Madeira does not appear on the OECD list of non-cooperative jurisdictions, nor on the EU list of non-cooperative territories, nor on the Portuguese blacklist (Portaria 150/2004). The confusion comes from the fact that its international business center (MIBC) offers a corporate income tax rate of 5%, which is indeed one of the lowest in Europe. But this 5% is conditional on real substance: local jobs, investments, and actual activity on the island.
One must distinguish two separate regimes in Madeira, both fully “onshore” within the European framework.
The “standard” regional regime: 13.3% instead of 19%
Any company whose registered office and effective management are in Madeira falls under the standard regional regime. It results in a 30% reduction of the national rate. With a standard rate of 19% in 2026 on the mainland, the tax burden therefore drops to 13.3% in Madeira for ordinary companies, without any special license or specific procedure other than actually being managed there.
For SMEs and small mid-caps, the reduction is even more pronounced on the first €50,000 of profit.
| Area / Regime | Profit base | 2026 CIT rate | Tax due |
|---|---|---|---|
| Mainland (SME) | €50,000 | 15% | €7,500 |
| Madeira (SME) | €50,000 | 10.5% | €5,250 |
On higher profits, the gap becomes dramatic. Let’s take a services business with €200,000 of taxable income.
| Location | Applicable rate | Tax on €200,000 |
|---|---|---|
| Mainland | 19% | €38,000 |
| Madeira (13.3%) | 13.3% | €26,600 |
| Madeira/mainland differential | — | €11,400 saved |
This annual tax saving, achieved without any “special” regime, clearly shows that Madeira is first and foremost an onshore optimization tool: same tax code, same filings, same transparency, but an automatically lighter tax burden.
The 5% MIBC: a substance-based regime, licensed and capped
Above this general regime exists the MIBC (Madeira International Business Centre), often marketed as a “European offshore” at 5%. In practice, it is an ultra-regulated regime, authorized by the EU under state aid rules, and reserved for companies licensed before December 31, 2026, with the benefit applying until 2033.
The reduced 5% rate only applies to profits from eligible international activities carried out with non-resident counterparties. It requires real substance: creation of local jobs, profits capped by tiers linked to employment, and a minimum investment in assets (often €75,000 in fixed assets in Madeira for small structures). The company must also file the same returns as a standard Portuguese company.
The comparison with the mainland is telling for an international services business generating €500,000 of eligible taxable profit:
| Regime | Eligible profit | CIT rate | Tax |
|---|---|---|---|
| Mainland | €500,000 | 19% | €95,000 |
| Madeira (regional 13.3%) | €500,000 | 13.3% | €66,500 |
| MIBC (5%) | €500,000 | 5% | €25,000 |
The difference is massive, but it comes at a price: local substance, additional administrative costs (MIBC license, annual fees, accounting, etc.), and very tight oversight by the authorities.
Add an often-overlooked element: for large groups exceeding €750 million in consolidated revenue, Pillar Two imposes a minimum 15% tax. Portugal has already transposed this mechanism (QDMTT). For these groups, Madeira’s 5% is in practice “topped up” by an additional tax up to 15%. In other words, the 5% MIBC is not a tax black hole: it is compatible with the global minimum.
Creating a company in Portugal remotely: how far can you go without traveling?
From a practical standpoint, the question is no longer just tax, but operational: can you really, in 2026, create and run a Portuguese company without ever setting foot there?
Portuguese law is surprisingly open: no provision requires the shareholders or managers of an Lda (quota company) to be residents of Portugal. A company can be owned and managed 100% by non-residents, with no requirement for a local director. But this freedom is counterbalanced by two realities: KYC/anti-money laundering procedures, and the concept of “place of effective management.”
The NIF: first building block, fully obtainable remotely
Whatever the structure, the first step is always the same: obtain an NIF (Número de Identificação Fiscal) for each shareholder and manager, as well as for the future company. Without this number, no other procedure (bank, registry, taxes) is possible.
Non-residents can obtain their NIF (tax identification number) entirely remotely through a fiscal representative in Portugal, by providing an ID document and proof of address. This process, often paperless, is handled by specialized firms acting under a power of attorney. It is the only step in the process that is, in practice, 100% remote without any nuance.
Between “theoretically possible” and “in practice”: signature, bank, KYC
The incorporation itself can legally be done remotely through a power of attorney: a lawyer or agent signs the articles of association and handles the formalities with the Commercial Registry. The government has also set up a platform, Empresa Online 2.0, which allows an Lda or SA to be created entirely online, 24/7, via electronic signature (Citizen Card or Chave Móvel Digital).
But two constraints curb the dreams of one-click incorporation:
Portuguese financial institutions are required, under Lei 83/2017, to identify their clients physically or through secure video conferencing, verify beneficial owners and the origin of funds, and refuse questionable files. Many banks still require the manager to be present to open a business account, which is essential for depositing the capital and operating.
The Companies Code and banking practice require proof of the capital deposit. The capital can be symbolic (€1 per shareholder for an Lda), but it must actually be made available through a bank account in the company’s name. In theory, some institutions can open this account remotely, but in practice, the more international the profile, the more likely an in-person visit or enhanced video verification will be required.
Several service providers describe a hybrid approach: all the preparation is done remotely (obtaining NIFs, choosing the legal form, drafting the draft articles of association, name reservations, etc.), then a single trip to Portugal allows you to sign, finalize the bank account, and complete the registration. This model has an advantage: it lends credibility to the structure’s substance in the eyes of authorities and banks, which view purely paper setups very poorly.
Incorporation procedures: a highly digitalized but tightly regulated process
Despite these constraints, Portugal remains one of the countries in Europe where you can incorporate a company fastest and at the lowest cost, including by relying heavily on online tools.
The most common structure for an international entrepreneur is the Sociedade por Quotas (Lda), the equivalent of an LLC. It can be a single-member company (Unipessoal Lda) with a single shareholder and minimum capital of €1.
The typical steps, largely paperless, are as follows.
Name reservation and preparation of the articles of association
The company name must be approved by the Registo Nacional de Pessoas Coletivas. You can either choose a pre-approved name from an official list or request a name admissibility certificate with a specific name. This certificate generally costs €75 and is valid for 90 days.
Preparing the articles of association (contrato de sociedade) in Portugal includes the corporate purpose (CAE codes), registered office, quotas, and the powers of the managers. The country accepts standard (official) templates or custom ones. Online, a template reduces costs to about €220 in registry fees with a pre-contract, while customized articles of association cost around €360.
Incorporation via Empresa Online or Empresa na Hora
Two public mechanisms coexist:
| Procedure | Mode | Usual timeline | Indicative cost |
|---|---|---|---|
| Empresa na Hora | In person | About 1 hour | €360 (€220 with pre-approved articles) |
| Empresa Online 2.0 | 100% online | 2 to 10 days depending on the file | €220 to €360 depending on the type of articles |
Empresa na Hora allows you to walk into a one-stop shop (Loja do Cidadão, registry office, etc.) and walk out with the company created in under an hour, using a pre-approved name and articles of association. It’s ultra-fast but requires you to be physically present or to mandate someone through a power of attorney.
Empresa Online 2.0 allows everything to be done remotely, provided you have a Portuguese authentication method (Citizen Card, Chave Móvel Digital, or a professional certificate). It is therefore a powerful tool for residents or those already embedded in the Portuguese ecosystem; for a complete non-resident, it often requires going through a local lawyer.
Post-incorporation obligations: RCBE, commencement of activity, accounting
Once the company is registered, the work is not over. Portugal has set up a Registo Central do Beneficiário Efetivo (RCBE), the central register of beneficial owners, managed by the IRN. Every company must declare its UBOs – individuals holding more than 25% of the capital or voting rights, or exercising effective control – within 30 days. Failure to file can result in heavy fines.
The company must file a commencement-of-activity declaration with the Autoridade Tributária, formalizing its entry into the scope of CIT and VAT, with the possible choice of certain regimes. This declaration must be signed by a certified accountant (Contabilista Certificado), whose appointment is practically mandatory from the moment of incorporation.
The company is then subject to recurring obligations: bookkeeping, filing an annual CIT return (Modelo 22), submitting accounts via the IES declaration, VAT returns, withholding tax returns, etc. All of this is based on a level of transparency incompatible with a “mailbox” use.
Corporate taxation: a competitive but closely monitored regime
Creating a Portuguese “offshore” structure only makes sense if the tax treatment follows. Portugal offers a coherent package: competitive CIT, no wealth tax, a participation-exemption regime, and for individuals, a new IFICI regime for certain qualified activities. But all of this falls within a logic of fighting abuse.
CIT: 19% on the mainland, 13.3% in Madeira, 5% under the MIBC
On the mainland, the standard CIT (IRC) rate is 19% from tax periods beginning in 2026, with a downward trajectory to 18% and then 17%. For SMEs and small mid-caps, a reduced rate of 15% applies to the first €50,000 of profit.
Madeira applies a 30% reduction to this rate: so we arrive at 13.3% in 2026 (and eventually 12.6% and then 11.9% if the trajectory is confirmed). For small structures, a rate of 10.5% applies to the first €50,000.
Within the MIBC, a licensed company benefits from a 5% rate on the portion of profit derived from eligible international activities. In addition, there are massive exemptions: up to 80% reduction on certain property taxes, stamp duty, municipal and regional surtaxes, as well as an exemption from withholding tax on dividends, interest, and royalties paid to non-residents (excluding blacklisted jurisdictions).
It is interesting to compare these rates with some other parameters.
| Key parameter (2026) | Mainland | Madeira (general) | MIBC (licensed) |
|---|---|---|---|
| Standard CIT rate | 19% | 13.3% | 5% (eligible income) |
| SME rate < €50,000 | 15% | 10.5% | 5% |
| Standard VAT | 23% | 22% | 22% (regional regime) |
| Wealth tax | None | None | None |
From a purely arithmetic standpoint, Madeira, and even more so the MIBC, are powerful tools for reducing the tax cost of an international business. But this reduction is governed by anti-abuse safeguards, starting with the increased 35% withholding tax on flows to jurisdictions “blacklisted” by Portugal, and by the transfer pricing and CFC rules applicable to so-called “offshore” arrangements.
Withholding taxes and international flows
Non-resident companies without a permanent establishment in Portugal are, in principle, taxed on their Portuguese-source income via a 25% withholding tax. This rate rises to 35% when the recipient is established in a jurisdiction listed as having significantly more favorable taxation than Portugal.
For Portuguese companies, payments of royalties, interest, or dividends to a classic offshore structure can trigger a 35% withholding tax. Thus, while inbound flows (from clients) may be optimized, outbound flows to certain tax havens risk being penalized—a crucial point to factor in for any intermediary structure.
Conversely, Portugal has signed 78 tax treaties, including with the United States, and applies the EU “parent-subsidiary” directive, which in many cases allows for a reduction or even elimination of withholding taxes on dividends between European subsidiaries and parent companies.
Tax residency and the risk of reclassification of “real” offshore structures
Creating a Portuguese company that is “onshore at a reduced rate” is one thing. Continuing to use a US LLC or a company in Malta, Cyprus, Dubai, or Delaware alongside it while living in Portugal is another: this is precisely what Portuguese authorities target.
A company is resident in Portugal if its legal seat or effective management is located there. Managing a foreign company (Delaware, Malta, etc.) from Lisbon can lead to its reclassification as a Portuguese resident: taxation on worldwide income, filing the Modelo 22 return, and application of Portuguese rates.
The authorities look very concretely at where board meetings are held, where the CEO and senior executives work, where day-to-day decisions are made, and where the offices, records, and bank accounts are located. This approach follows the OECD commentary on the concept of “place of effective management” and is binding on the Portuguese tax administration.
For individuals, the 183-day rule or the habitual-abode rule establishes tax residency in Portugal, making worldwide income taxable. Billing through a US LLC without declaring yourself is unsustainable in the medium term.
Conversely, a recent ruling by the tax authorities (ruling no. 29716) confirmed that a non-resident appointed as director of a Portuguese company, without remuneration, without significant physical presence, and with duties performed from abroad, does not become a Portuguese tax resident and is not taxable on foreign income. This kind of nuance shows that Portugal is not trying to “trap” non-residents at all costs, but rather applies its criteria strictly.
Individual tax regimes: after the NHR, a highly targeted IFICI
A large part of the marketing around Portuguese companies promoted a three-part package: low CIT, NHR for the manager, and no taxation on foreign income. The landscape has changed profoundly.
The historic non-habitual resident (NHR) regime has been closed to new entrants and replaced by IFICI (Incentivo Fiscal à Investigação Científica e Inovação), sometimes presented as an “NHR 2.0.” In practice, IFICI is much narrower.
This program is aimed at researchers, higher education teachers, highly qualified executives in innovation or productive investment projects, founders of companies recognized by AICEP or Startup Portugal, and R&D personnel eligible for tax credits. Requirements: not having been a Portuguese tax resident for the previous 5 years, never having benefited from another special regime, and filing the application through the Portal das Finanças within the deadlines.
For eligible individuals, IFICI applies a flat 20% rate on Portuguese professional income (salaries and self-employment income) related to the qualified activity, instead of the progressive brackets that can reach nearly 48%. A large portion of foreign-source income – dividends, interest, rents, certain capital gains – can remain exempt in Portugal, provided the source country has a right to tax under a treaty or OECD principles. However, foreign pensions are taxed under the progressive scale.
The key points can be summarized as follows.
| Aspect | Old NHR (more open) | IFICI (current targeted regime) |
|---|---|---|
| Duration | 10 years | 10 years (non-renewable) |
| Target | Broad (high-value-added profiles, HNWIs, retirees) | Research and innovation, startups, qualified jobs |
| Rate on PT professional income | 20% on high-value-added activities | 20% on eligible activities |
| Foreign income | Largely exempt under certain conditions | Generally exempt, except pensions |
| Foreign pensions | Flat 10% | Progressive scale |
For a manager moving to Portugal to run their Madeira-based or mainland structure, access to IFICI is therefore not automatic: a simple remote contract with a foreign company is no longer enough; there must be a link to a recognized Portuguese entity in the targeted sectors, and an activity carried out in Portugal.
Anti-money laundering, KYC, and the beneficial ownership register: the end of anonymity
Another illusion associated with the notion of an “offshore company” is anonymity. In Portugal, this option no longer exists, and that is not a minor detail: it is one of the most structured transparency systems in Europe.
Law 83/2017 imposes on banks, lawyers, notaries, accountants, and company service providers obligations of in-depth identification of clients and beneficial owners, with systematic collection of data: name, address, nationalities, occupation, tax number, identity document, and origin of funds.
Every company must also register with the RCBE, the central register of beneficial owners, indicating the individuals who control more than 25% of the capital or voting rights, or who exercise effective control by other means. This register is accessible to obliged entities, meaning a shell company can no longer hide the true owner from banks or the authorities.
Financial institutions must report any suspicious transaction to the financial intelligence unit (UIF) without informing the client, and must refuse or suspend doubtful transactions. Cash transactions above certain thresholds (€15,000 or €50,000 depending on the case), transfers to high-risk jurisdictions, and many real estate transactions are subject to mandatory reporting.
For an entrepreneur who imagines that a company in Madeira allows them to discreetly manage real estate assets in Portugal or international flows without being noticed, the reality is quite different: transparency rules are omnipresent, and structures without substance are explicitly targeted, particularly in real estate, with partial transparency rules on the value of assets held through companies.
Creating an offshore company in Portugal remotely: when does it make sense?
In light of this entire framework, the question “Can you really create an offshore company in Portugal remotely?” calls for a multi-part answer.
From a purely technical standpoint, it is possible:
You can incorporate a Portuguese company (Lda, SA, or even an MIBC entity in Madeira) without being a resident, by carrying out most of the steps remotely through powers of attorney, local service providers, and the Empresa Online 2.0 platform. Profit taxation is highly competitive: up to 5% on certain activities in Madeira, 13.3% under the ordinary regional regime, and 19% on the mainland with a downward trend. You can hold the company through a foreign holding or directly, while benefiting from the network of tax treaties and European directives.
On the other hand, it is not possible:
Total anonymity is impossible (RCBE, KYC, reporting), a company without real substance attracts the tax authorities, spending 183 days in Portugal creates tax residency, and structures set up through Madeira cannot conceal real estate ownership or optimize capital gains beyond the anti-abuse provisions.
Portugal therefore does not offer an “offshore” in the traditional sense, but rather a sophisticated compromise: an EU member state, with low CIT (as low as 13.3% or even 5%), potentially optimized personal taxation for certain profiles through IFICI, no wealth tax, and a very dense tax treaty network—all within an ultra-regulated environment.
For an international entrepreneur or investor seeking a stable European base, with a reasonable tax burden and a compliant image, this compromise is highly attractive. For someone looking to hide funds or eliminate all taxation, it is on the other hand completely unsuitable.
Conclusion: from the offshore fantasy to choosing a competitive and transparent tax hub
In 2026, the real question is no longer “where can I find a secret tax haven?” but “in which country can I structure my business efficiently without getting the authorities and banks on my back?” To that question, Portugal, and especially Madeira, provide a solid answer.
You can create and manage a company in Portugal remotely with a low CIT rate, but it remains fully onshore: subject to the Portuguese tax code, EU rules, OECD transparency standards, the beneficial ownership register, and heavy anti-money laundering obligations.
The challenge for a French-speaking entrepreneur considering this option is therefore no longer whether they can escape tax through a “magic” company, but whether their business model, physical presence, and international flows lend themselves to a structured setup in Portugal or Madeira, with substance, transparency, and deliberate optimization. Within that framework, the answer is clearly yes: it is possible, legal, and potentially very effective. Outside that framework, the idea of an “offshore company in Portugal” is more of a marketing slogan than a sustainable strategy.
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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.
