Madeira: Types of Company
Madeira is a civil law jurisdiction, subject in general to Portguese law, and thus the trust does not exist as such. Portugal has not ratified the Hague Convention on the law applicable to trusts and their recognition.
Nonetheless when the Free Trade Zone Legislation of Madeira was enacted, provision was made for the creation of offshore trusts. Decree Law No 352/88 & Decree Law No 149/94 deal with the registration and management of offshore trusts whereas Decree Law 264/90 concerns authorization by Government of trust corporations and branches. The property of trusts must be outside Portugal, and their income must be derived from outside the country.
An offshore trust lasting for more than one year needs to register in the Free Trade Zone registry, although the identity of the beneficiaries need not be disclosed. Neither settlor nor beneficiaries may be residents of Portugal. Only Stock Corporations (see above) and branches of foreign trust corporations licensed to operate under the Free Trade Zone Legislation of Madeira can act as trustees. See Offshore Business Sectors for details of the licensing regime for trust companies.
Trusts are not subject to the vestigial exchange controls operated by the Bank of Portugal. Trusts are not subject to tax; see Offshore Legal and Tax Regimes for details of the taxation of trustees and trust companies.
Trusts are free to emigrate without authorisation by substituting their proper law with that of another jurisdiction.