IBCM – The Madeira Free Zone (International Business Centre of Madeira, IBCM) is a special tax regime that is fully integrated into the legal systems of Portugal and the European Union.
The regime was established to attract international business and investment and has been officially approved by the European Commission as a regional development tool.
Companies registered with the IBCM may apply a reduced corporate tax rate of 5% on profits derived from international activities. Income derived from operations within Portugal is taxed at standard rates.
To qualify for the benefits, a company must have an economic presence in the region, including job creation and investment. For example, a company must either create at least one job and have assets of at least €75,000 by the end of the second year of operation, or ensure the creation of at least six jobs.
Key benefits of the regime include:
- access to the system of double taxation agreements
- exemption from withholding tax on dividends for non-residents
- participation in the exemption regime for dividends and capital gains
- reduction or exemption from local taxes
The IBCM is not an offshore jurisdiction: it is fully regulated by Portuguese and European authorities and complies with international transparency standards. The regime is in force until 31 December 2033, with the prospect of extension.
