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News & Knowledge

The Portuguese Comandita Structure and the benefits it offers

15th November 2016
Carlos Santos, Dixcart Management (Madeira) Lda

The Portuguese Comandita Structure can offer a number of advantages to individuals in jurisdictions such as Austria and Germany where special tax treatments are applicable to partnerships. MSI's Portuguese specialist member Dixcart Management (Madeira) Lda provides more information on this topic.

Higher rate taxpayers can choose to hold their foreign investments through a Portuguese Comandita Company (Partnership), and benefit from a significant increase on their returns.

There are four different types of companies that can be established in Portugal:

  1. Private limited liability companies (Sociedade por Quotas, LDA)
  2. Public limited companies (Sociedade Anónima SA Corporation)
  3. Limited co-partnership companies (Sociedade em Comandita, SC)
  4. General partnership companies (Sociedade em Nome Collectivo, SNC)

The third type of company is based on a structure similar to a Kommanditgesellchaft (KG) which is the German name for a limited partnership business entity. This structure is a traditional and well used corporate structure in Germany, Austria and a number of other European countries, including Portugal.

Comandita Tax Status – Germany: Portugal

In Germany, the limited co-partnership company (KG) is not taxed as a separate entity. The German KG itself is not subject to German tax, neither German trade tax (Gewerbesteuer) nor German corporation tax.

Each partner is liable to pay tax on their share of income from the company, according to his or her individual tax status. In contrast, the Comandita (Partnership) in Portugal is considered a corporate entity and is taxed as such.

The Opportunity

Tax efficiencies are available through the use of a Portuguese Comandita in jurisdictions where special tax treatments are applicable to partnerships. This is particularly relevant in Austria and in Germany.

Further tax efficiencies can be provided through the use of a Portuguese Comandita registered in the International Business Centre of Madeira.

Read more about The Portuguese Comandita Structure and the benefits it offers

About Dixcart Portugal - Madeira

Dixcart Portugal Lda is a company incorporated in Portugal and registered in Madeira under the provisions of the International Business Centre Legislation, which allow companies to undertake activities from Madeira whilst enjoying tax exemptions.

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