As an EU member state, Portugal is of course bound by EU law, and the 6th Directive authorises the use of electronic invoices. More specific legislation which required EU member states to allow the use of electronic invoices by 1st January 2004 was authorised by the Council of Ministers in December 2001.

Portugal was among the earliest EU member states to introduce enabling legislation in 1999, but it was without effect until precise administrative provisions were also adopted, which did not happen until the end of 2001, although the provisions themselves had been formulated a year before, in 2000.

The result is that Portugal, and hence Madeira, is the first EU country to have a fully-realised electronic invoicing regime. This is of particular importance in the context of the recently-approved EU directive applying VAT to non-EU providers of on-line services. Madeira is already one of the preferred locations for EU-wide VAT registration for digital suppliers, because of its low VAT rate, and the electronic invoicing provisions make it very simple for a non-EU supplier to use Madeira as its base without needing to have a physical installation that can issue paper invoices.

There is no requirement in the electronic invoicing law for paper copies to be produced or retained, although electronic records have to be backed-up and retained for an appropriate period (often 7 years).