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holdings
| Portuguese legislation allows pure holding companies to be established, which are known by the abbreviation SGPS (Sociedade Gestora de Participações Sociais [Corporate shareholding management company]).
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Taking into consideration the favourable tax system applicable to the holdings licensed to operate in the International Business Centre of Madeira, the vast network of double taxation agreements and the fact that SGPS companies comply with the parent subsidiary directive, which allows SGPS companies to receive dividends from subsidiaries resident in the European Union exempted from deducting tax at source in the country of origin, large corporate groups are provided with sufficient reason to integrate Madeira into their corporate structures covering the European Union.
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Another fact that is esteemed by our clients is the possibility given to SGPS companies to distribute income (dividends, interest, the product of liquidation procedures or other income) amongst their shareholders non-resident in Portugal without any requirement to deduct tax at source, even if these shareholders reside in tax havens.
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