INVEST IN ANGOLA MADEIRA ANGOLA

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1 INVEST IN ANGOLA MADEIRA ANGOLA

2 Invest in Angola 1. An investment opportunity Capital city 6 million 20% ANGOLA Country 18.5 million Portuguese 2 nd Language 80% 1 st Language Angolan Kwanza (AOA) It is one of the richest countries in the Sub-Saharan region in respect of minerals and other natural resources, such as oil and diamonds. Since 2002, Angola has been rebuilding itself for the future to come, in order to pull alongside in terms of economic growth and development. Re-establishing the national economy, the infrastructures and the normal life of its people has restored national and international confidence and national pride as well as steadily increased the flow of foreign investment. Angola is now the fastest growing economy in Africa and one of the fastest in the world. Angola has not signed, until today, any Treaty or Convention for the avoidance of double taxation, hence the importance of its relationship with Portugal and its tax benefits, both those available within the International Business Centre of Madeira (IBC) and general tax benefits. 1/5

3 2. Madeira: a great vehicle to invest in Angola Portugal has continued to invest in its former colony as they have shared a language and common history for so long. Because of this close relationship, Portugal has implemented some general tax benefits that, together with the IBCM benefits, make Madeira the best vehicle for investing in Angola. Advantages are not only related to tax benefits: many Portuguese have worked in Angola or in companies that operate in Angola in a broad range of business sectors and as such it is not difficult to find workers with experience in the Angolan market and who maintain close emotional ties with Angola, or who were even born there. There is also the fact that Angolan legislation has many points in common with Portuguese legislation. Madeira is an autonomous region of Portugal located in the Atlantic Ocean, in the same time zone as London, 1 hr 20 min from Lisbon from where there are daily flights to Luanda. Madeira is a modern economy based on International Services Tourism: 28% and IBC: 21%), having highly specialized and efficient professional services providers, as well as qualified workforce with proficient language skills. 1h 20m It has a mild climate, modern infrastructures and outstanding natural beauty. Add to this a safe environment with a low crime rate and the result is a great quality of life. MADEIRA Efficient structures using Madeira: Holding Trading 2/5

4 Holding MADEIRA CO Angolan OpCo DIVIDENDS and CAPITAL GAINS 0% Dividends received [1] Sale of the Madeira HoldCo Sale of subsidiaries [1] upon application of the Participation Exemption or the tax credit for international double taxation Participation Exemption ALL DIVIDENDS RECEIVED FROM AN ANGOLA SUBSIDIARY SHALL BE EXEMPT, PROVIDED THAT THE FOLLOWING REQUIREMENTS HAVE BEEN MET: The Madeira company has directly or indirectly held a participation of at least 5% of the share capital of the angolan company uninterruptedly for 2 years The angolan subsidiary is subject to and not exempt from a tax that is identical or similar to corporate income tax, provided that the rate applicable to the entity is not less than 60% (13.8%) of the corporate income tax rate* Distributed profits are not costs that can be deducted by the angolan subsidiary The company is not subject to a tax transparency regime [ *] This requirement can be dispensed with if the profits of that entity come from active operations that are not aimed at the Portuguese market. In cases where the Participation Exemption does not apply, there is a unilateral tax credit for international economic and legal double taxation that allows for a tax credit for income tax paid by the Angolan subsidiary on profits distributed to the Madeira company, provided that the first aforementioned requirement is complied with in terms of the participation exemption (double economic taxation), along with a tax credit for withholding tax (double legal taxation). Capital gains earned by the Madeira company from the sale of its subsidiaries in Angola are exempt from taxation, in accordance with the terms of the Participation Exemption. If the capital gains are not exempt because the Participation Exemption requirements have not been met, there is also the possibility of only half (50%) of the capital gains being considered, if reinvested under certain conditions. Trading This structure is used for the purchase and sale of goods or the supply of services in Angola: project management, logistics, procurement, among others, using Madeira. MADEIRA CO 5% Corporate income tax (CIT) Profits Purchase and sale of goods and supply of services Angolan Client 3/5

5 3. The International Business Centre of Madeira The IBCM is a special tax regime that seeks to attract foreign investment. Among others, tax benefits include 5% corporate income tax, withholding tax exemption on payments made abroad, a worldwide participation exemption, exemption from stamp duty, exemption from tax on capital gains from the sale of shares in the Madeira company or from the sale of subsidiaries. TAX BENEFITS corporate 5% income tax EXEMPTIONS withholding tax (WHT) Capital gains tax on sale of shareholdings It is an economic development instrument created to modernize, diversify and internationalize the Madeira economy. CAPITAL DUTY As such, IBCM is fully integrated into Portuguese rule of law and into the European Union (EU). Its special regime (state aid) was approved beforehand by the EU in full compliance with all of its treaties and legislation. For instance, all the principles of the EU Treaty are applicable to Madeira companies and their investors, and the EU VAT system is entirely applicable. It is not on any official blacklist issued by international organizations that list territories and regions as tax havens. In addition, it complies with all the criteria defined by the OECD with respect to transparency and information exchange. One of the activities that can be performed within the scope of the IBCM is the supply of international services, including trading and holding services. 4/5

6 4. NEWCO NEWCO is a corporate services provider, which under its previous brand New Madeira, and for more than two decades, has supported the incorporation and management of companies in competitive jurisdictions. With wide experience and know-how, which allowed it to successfully support major multinational companies as well as smaller companies and start-ups, NEWCO is present in Madeira and Malta, where it helps its clients benefit from a wide range of opportunities in these extremely attractive jurisdictions. While clients focus on their business, NEWCO, together with its clients specialists, offers effective solutions which may increase net profits by up to 35%. As a corporate services provider, NEWCO ensures that its clients receive all the necessary support to efficiently set up their companies in Madeira and Malta. The strategic values driving NEWCO s business activities are know-how, customer satisfaction, integrity, service excellence and innovation; and our clients acknowledge these in the services we provide. To better understand how we can help your company take advantage of the opportunities offered by Malta and Madeira, visit us at, or just follow us online through our blog, LinkedIn, Twitter or Facebook accounts. The findings of a survey carried out to assess our clients satisfaction speak for themselves: Would be very likely to recommend NEWCO 93% 87% The company sets an excellent standard in its sector 5/5