In an effort to attract startups and tech professionals, Portugal’s Madeira archipelago is presenting itself as a potential hub for emerging technologies like blockchain. This move comes as a response to its aging population and the need for a more diverse economy. Rogerio Gouveia, finance secretary of the regional government of Madeira, stated that almost 30% of businesses in Madeira’s free trade zone are now emerging-technology based companies. The area also boasts one of the lowest corporate tax rates in the European Union and offers capital gains tax exemption for eligible firms.
Key to attracting companies to the region is the Madeira free zone or the International Business Center. This zone provides a preferential tax regime, with the corporate tax rate capped at a mere 5%. It’s not an offshore haven, rather it functions within a strict regulatory framework and is subject to stringent audits by national tax authorities and the European Commission.
Software development company Yacooba Labs, is one of the enterprises contributing to Madeira’s Web3 ecosystem, using blockchain technology for their ticketing solutions. This addresses issues like inflated secondary market prices and ticket fraud. Coupled with Madeira’s tax incentives are efforts to shift the economic landscape from tourism to technology. This includes an emphasis on IT education in local schools.
In order to streamline transactions for both residents and tourists alike, Madeira is in the process of developing a payment network. Although still in the early stages, this network will use blockchain technology to enable a universal debit card for all products and services. The goal is to connect local merchants and simplify currency exchange for tourists. The regional government will also use this card system for administrative purposes, like the dispersal of social benefits.
Madeira has a history of serving as a testing ground for new technologies, such as 4G and cable television. In keeping with this tradition, the island is intrigued by the potential of this blockchain-enabled payment model and is keen to see if it is feasible on a broad scale.