Madeira IBC IBC

The **International Business Centre of Madeira (IBC)**, known locally as Centro Internacional de Negocios da Madeira, was established by Portugal in 1980 with the explicit approval of the European Commission as a regional state aid scheme. Companies licensed in the IBC and meeting the regime conditions pay a reduced corporate income tax rate of 5 percent on qualifying profits, against the standard Portuguese rate of 21 percent plus surcharges.\n\nThe reduced rate applies up to a cap that scales with the number of jobs created and total taxable income. Qualifying activities include international services, holding companies, e-commerce, shipping, and industrial activities in the Free Trade Zone. To qualify, companies must create a minimum number of full-time jobs in Madeira (typically 1 to 6 depending on the scheme tier) within the first 6 months and maintain substantive operations on the island, including office space and at least one director with day-to-day responsibilities.\n\nThe regime is approved by the European Commission until 31 December 2027 under the current state aid decision, with the underlying program licensed through 31 December 2028. Companies admitted by the deadline keep their reduced rate until the program end date.

You will encounter the Madeira IBC when comparing low-tax EU jurisdictions for trading, holding, IP, or e-commerce businesses that want to operate inside the EU single market with minimal frictions while keeping effective tax rates low. It is particularly relevant for founders who can credibly base part of their team on Madeira and want a tested, EU-approved regime rather than a free zone outside Europe.