Positioned in the heart of the Atlantic, the Madeira archipelago in Portugal is actively seeking startups and tech talents to fuel its economic development. This region is fast becoming a hub for Web3 entrepreneurs, drawn by its natural beauty and the opportunities it offers for business growth. With an aging population and a pressing need for a more diverse economy, the local government of Madeira is turning to emerging technologies like blockchain to drive progress.
Emerging Technology Companies: A Major Economic Force
Rogerio Gouveia, the finance secretary of Madeira’s regional government, notes that nearly 30% of businesses in Madeira’s free trade zone are emerging-technology companies. This special economic area provides tax benefits to businesses, including one of the lowest corporate tax rates in the European Union and a capital gains tax exemption for qualifying firms.
The most significant tax incentive for companies looking to establish a foothold in the region can be found in the Madeira free zone, also known as the International Business Center. Here, the corporate tax rate is capped at a highly competitive maximum of 5%. Importantly, this is not an offshore haven. The regime operates within a structured set of regulations and is subject to rigorous audits by both national tax authorities and the European Commission.
Building a Web3 Ecosystem in Madeira
One of the key players in Madeira’s Web3 ecosystem is Yacooba Labs, a software development company that uses blockchain technology to create ticketing solutions. This tackles issues such as inflated secondary markets and ticket fraud. Additionally, Madeira’s tax incentives are tied to other initiatives aimed at transitioning the region’s focus from tourism to a tech-based economy. This includes an emphasis on IT education in local schools, marking a stark contrast to the 50% illiterate population of the island in the 1970s.
Developing an Innovative Payment Network
Madeira is also in the process of developing a payment network that will link local merchants and simplify currency exchange for tourists. While still in the exploratory phase, it is likely that this network will leverage blockchain technology. This would allow tourists to load and use a single debit card across the archipelago for all goods and services. The same card system would streamline government operations, including the payment of social benefits like scholarships to residents.
The Madeira archipelago is being used as a testing ground for this model, continuing its history of serving as a laboratory for new technologies. Over the years, the region has been used to validate other technologies in Portugal, such as 4G and cable television.
As part of the Madeira startups and innovative payment system initiative, the Madeira Blockchain 2023 conference was held from November 30 to December 1. This event brought together Web3 companies from around the world that are shaping the business models and technologies of the future.
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