MADEIRA FREE TRADE ZONE (MFZ) 9 th of July 2014

1. MADEIRA FREE TRADE ZONE (MFZ) 9th of July 2014

2. MADEIRA FREE TRADE ZONE ABOUT MADEIRA

3. WHY MADEIRA FREE TRADE ZONE?

4. INTERNATIONAL BUSINESS CENTRE OF MADEIRA NOTION • The IBCM consists of a set of incentives, particularly tax, applicable to a wide range of activities that can be developed, in particular, by commercial companies (also branches, agencies, offices); • All type of service-oriented companies may be licensed to carry out activities, namely: International Trading, Consultancy, Management of Intellectual property, e-business, telecommunications, Share Holding (SGPS). • The administration and operation of the MFZ are the sole responsibility of the “SDM - Sociedade de Desenvolvimento da Madeira, S.A.” (to which is due by entities operating in the MFZ, the payment of an application fee and an annual operating fee).

5. INTERNATIONAL BUSINESS CENTRE OF MADEIRA PRE-ESTABLISHED REQUIREMENTS • Start operating within six months after the issuance of the license in the case of international services and one year in the case of the industrial activities or ship registration; and • Creation of 1 to 5 job positions(*) on the first 6 months of operation and undertake a minimum investment of € 75,000 in acquisition of fixed assets, tangible or intangible, in the first two years of operation; or alternatively, • Creation of 6 or more job positions in the first 6 months of operation. • (*) It is not mandatory to develop the labour activity exclusively in Madeira.

6. INTERNATIONAL BUSINESS CENTRE OF MADEIRA DEADLINES • Madeira have an agreement previously negotiated with the EU to practice his tax regime until 2020, which confers stable protective legislation and a tax on investments that you cannot find in another jurisdiction. • Favorable Tax Regime is applied to entities licensed from 1st of January of 2007 to 31st of December of 2014.

7. TAX REGIME FOR MADEIRA FREE TRADE ZONE ACTIVITIES THAT BENEFIT FROM A FAVORABLE TAX REGIME • i) Agriculture and animal production; • Fishing, aquaculture and related services; • Manufacturing industries; • Production and distribution of electricity, gas and water; • Wholesale trade; • Transportation and Communication; • Real Estate Activity, renting and business services; • Higher education, adult education and other educational activities; • Other community services, namely activities related to sanitation, as well as recreational, cultural and sporting activities.

8. Madeira free trade zone IRC – TAX RATE • Incomes are taxed at corporate income tax, until December 31, 2020, at the rate of 5% applicable on profits from operations developed exclusively with entities non-resident in Portuguese territoryor entities also licensed under the IBCM . • The application of the reduced tax rate (IRC) of 5% is limited to a maximum amount upon the annual tax base which varies according to the number of jobs created, as follows:

9. MADEIRA FREE TRADE ZONE IRC - 50% reduction on the taxable income (Industrial Free Trade Zone) • When fulfilling two of the following criteria: • Contribution to the modernization of the economy through technical innovation of products and procedures or business models; • Contribution to the diversification of the regional economy by introducing new activities of added value; • Fixation of qualified human resources; • Contribution to the improvement of the environmental conditions; • Creation of 15 jobs for a period of 5 years.

10. TAX REGIME SUMMARIZED TAX FRAME

11. More favorable regime Othertaxbenefits Exemption of Stamp Duty Tax on every documents, contracts, acts, books, papers and any other operations; Profits distributed to IRC taxpayers are exempted or taxed at a 5% rate; Exemption of Capital Gains Tax on Share Capita l Increase; Exemption of Land Transfer Tax and Stamp Duty Tax on transmissions of shares, stocks and other assets that comprise the assets of the company situated at MFTZ; It will be considered as a cost for tax purposes the injection of share capital.

12. COMPETITIVE STRENGHTS

13. ALTERATION OF REGISTERED OFFICE OF OFF-SHORE COMPANIES Competitive strengths justify the transfer of companies already established in other jurisdictions to the MFTZ: • Especially when those companies are established in a country, territory or region subject to more favorable tax regime (off-shore) • The IBCM is not included in any of the official lists issued by international organizations which set out the territories and regions qualified as "tax haven", fulfilling all the criteria defined by the OECD in terms of transparency and information exchange • The alteration of registered office to MFTZ depends, in the first place, on the law of the country of origin, but Effective transfer of registered office still requires approval of the company name and object in the Portuguese Companies House, the issuance of the license to operate at MFTZ and the respective registrations.

14. apPLICABLE FEES

15. apPLICABLE FEES * The figures in this factsheet does not include VAT at the applicable rate of 22% ** If society is to be a society of Client Management site, the cost will be € 1300.00 / year

16. statistical data

17. LEGAL SERVICES In the process of incorporation of a Company in the Madeira Free Zone, RSA provides a cross Counsel at all stages of the process. For example refer to the following services:

18. THANK YOU! LISBON - OPORTO – COIMBRA - ALGARVE - AZORES - MADEIRA - ANGOLA - BRAZIL - MOZAMBIQUE-CAPE VERDE LISBON Rua Bernardo Lima, 3 1150-074 Lisboa T. +351 213 566 400 F. +351 213 566 488 | 9 Contact: joaonobrega@rsa-advogados.pt www.rsa-advogados.pt