Madeira: Offshore Business Sectors
Madeira is a civil law jurisdiction, subject in general to Portuguese law, and the trust thus 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 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 the Free Trade Zone Legislation of Madeira can act as trustees.
Trustees require authorization from the regional government of Madeira 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.