Legal reserve

Companies must establish a legal reserve under the following conditions:

(a) For Lda, 5% of the annual profits corresponding to at least 20% of the share capital, with minimum amount of 2.500€;

(b) For S.A., 5% of the annual profits corresponding to at least 20% of the share capital.

Auditing requirements

In accordance with Portuguese law, all companies licensed within the legal framework of Madeira’s IBC must keep proper books of accounts and make them available, if necessary, for inspection by the Portuguese fiscal authorities. The official books of accounts should be made in the Portuguese language and currency (EURO).

If the company is S.A., it is required a Committee with a minimum of three members where one member must be a qualified auditor or an auditing company that operates in Portugal.

In the case of private limited companies, if two of the following pre-requisites are fulfilled during any two consecutive years, then such companies are required to present annual accounts audited by either a qualified auditor or an auditing company:

(a) Average of 50 employees per annum;

(b) Total assets of 1,5 million Euro or more per annum;

(c) Total income of 3 million Euro per annum.