In the 1980s a deep sea port was constructed at Canišal, 30 km from Funchal, where only a fishing village had existed before and it was here that an industrial free trade zone was established. The industrial free trade zone now measures some 138 hectares in size. A large number of companies engaged in such diverse activities as foodstuffs, tobacco, metal works and electrical appliances have set up there.
The Industrial Free Trade Zone has been created to receive activities which, by their nature, involve the physical movement of goods. All goods, regardless of their nature, quantity, origin and destination, may be imported into the Zone in order to be stored, repaired or transformed with few formalities, provided they are not a threat to national security or public health.
Madeira's FTZ offers a wide range of both tax and customs incentives which form a unique package, unrivalled by any other Free Trade Zone. Madeira can be of great benefit for non-European companies wishing to penetrate into the EU Single Market more easily, and for European companies aiming at reducing their operational costs and enhancing their tax efficiency.
Besides benefiting from the existing tax regime applicable to a MIBC company, especially the reduced tax rate of 5% until 2027, manufacturing companies in the Industrial Free Trade Zone may also benefit from a 50% reduction on the taxable income, when fulfilling two of the following criteria:
- Contribution to the modernization of the economy through technical innovation, new products and procedures;
- Diversification of the regional economy by introducing new activities of added value;
- Fixation of qualified human resources;
- Contribution to the improvement of the environment;
- Creation of 15 jobs for a period of 5 years.
In addition, Madeira's FTZ has other characteristics which, in some cases, may also become important competitive factors:
- The islands' geographical location, with speedy access tothe European, African, and American markets.
- Political and economic stability
- Modern telecommunications
- An excellent climate without great temperature variations throughout the year