Madeira: Offshore Business Sectors
This page was last updated on 30 June 2021.
As Madeira is in general subject to Portuguese law, it is a civil law jurisdiction and therefore trusts do not exist as such. Portugal has not ratified the Hague Convention on the law applicable to trusts and their recognition.
Nonetheless, the Madeiran free trade zone legislation made provision 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 no. 264/90 concerns government authorization of trust corporations and branches. The property of trusts must be outside Portugal, and income 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 Madeiran free trade zone legislation can act as trustees.
Trustees require authorization from the Madeiran regional government, and at least 51% of the shares must be held by nominees. A transfer of more than 5% of the shareholding in a trust company requires the approval of the regional government.
Trust companies must be audited annually and must retain a statutory auditor on their board of directors. They must keep books of account relating to the trusts being administered.