MADEIRA FREE TRADE ZONE (MFZ) 9 TH OF JULY 2014

MADEIRA FREE TRADE ZONE (MFZ) 9 TH OF JULY 2014

MADEIRA FREE TRADE ZONE REGIME Autonomous Region since 1976 TOTAL AREA 741 Km2 (Madeira) 801 km2 (Archipelago) ABOUT MADEIRA CAPITAL Funchal (more than 100,000 inhabitants) OFFICIAL LANGUAGE Portuguese (the English being commonly spoken) LOCATION In the North Atlantic, about 861 km from Lisbon and 580 km from the coast of Africa POPULATION (2012) 263 091 CURRENCY Euro ( ) IMPORTS (2010) 136 309 000 EXPORTS (2010) 55 010 000

WHY MADEIRA FREE TRADE ZONE? Tax system fully approved and supported by Portugal and the European Union (EU) Permission of trust schemes International image of transparency and rigor (without an offshore scheme) Reduced taxation Properly regulated and supervised business environment

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).

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.

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.

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

MADEIRA FREE TRADE ZONE 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 territory or 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: Job Positions IRC TAX RATE Minimum Investment Limit (annually) 1 a 2 75.000,00 2.730.000,00 3 a 5 75.000,00 3.550.000,00 6 a 30-21.870.000,00 31 a 50-35.540.000,00 51 a 100-54.680.000,00 Mais de 100-205.500.000,00

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.

TAX REGIME Taxation Corporate Income Tax Rate SUMMARIZED TAX FRAME Income from activities held with nonresidents 5% Dividends/ Capital Gains 0 % Royalties 2,5% or 5% Capital (Stamp) Duty Withholding Tax Full Exemption Paid to non-resident shareholders Dividends 0%; or 5% to 28% Interests 0 % Capital Gains 0 % Royalties 0 % Services 0 %

MORE FAVORABLE REGIME OTHER TAX BENEFITS 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.

COMPETITIVE STRENGHTS Change the registered office of a company to the MFTZ ensures that a company is entitled to a very competitive Income Tax rate Can be found a great climate, political and social stability and a very low rate of crime. Madeira has as an economy based on internacional services Has excellent and varied hotel units, a university, a modern transport system such as the International Airport, the Port of Funchal or its roads. Has stable protective legislation and a tax on investments that you cannot find in another jurisdiction Madeira is part of the EU, the Eurozone, the Schengen area and the OECD, benefits from all the agreements to avoid double taxation signed by Portugal Presence of banks internationally renowned and stable and trustworthy business partners that can ensure very low cost when compared with other offshore locations. The high European standards of safety and security for investors, a strong currency with a wide circulation

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.

APPLICABLE FEES DESCRIPTION FEE Constitution Fee 1.000 Annual Operating Fee Aditional Operating Fee (only for SGPS) 1.800 (1.300 if using local Management Company) 0,5 % of taxable income that exceeds 1 Million Registration of Trust 300 Constitution Fee for Trust Branches Annual Operating Fee for Trust Branches 1.000 2.400

APPLICABLE FEES Constitution Fee Headquarter Local Director and partners Accounting Taxation Salaries Invoicing Operating License 3.000,00 800,00 (annual) (i) 850,00 (annual) (ii) 1.000,00 (annual/partner) 1.750,00 (annual) 1.800,00 (annual) 10,00 (per worker) 6,00 (per document) 1.800,00** (annual) * 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

STATISTICAL DATA

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:

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