An archipelago in the middle of the Atlantic is looking for startups and tech talent to boost its economic growth. Web3 entrepreneurs are flocking to this region.
Portugal's Madeira archipelago is praised for its natural beauty, but an aging population and the urgent need for a more diversified economy have led the local government to explore new technologies such as blockchain.
According to Rogerio Gouveia, finance minister of the regional government of Madeira, emerging technology companies make up almost 30% of companies in Madeira's free trade zone, a special economic zone that offers companies tax advantages, including one of the lowest corporate tax rates in the European Union and exemption from capital gains tax for eligible companies.
“For companies seeking a presence in the region, the main tax incentive is in the Madeira Free Zone or the International Business Center. This territory offers a preferential tax system that caps the corporate tax rate at a competitive maximum rate of 5%.” “It is important to note that this is not an offshore haven. This system operates within a structured framework and is subject to strict audits by both national tax authorities and the European Commission,” Gouveia told Cointelegraph during the Madeira Blockchain Conference.
Portugal's island of Madeira. Source: David Pogue/Pixabay
One of the companies behind Madeira's Web3 ecosystem is Yacooba Labs, a software development company that leverages blockchain technology for ticketing solutions and addresses issues such as overpriced secondary markets and ticket fraud.
In addition, Madeira's tax incentives are linked to other initiatives aimed at shifting the region's focus from tourism to a technology-based economy, including an emphasis on information technology education in local schools. This is in sharp contrast to the island's 50% illiterate population in the 1970s.
Madeira's Regional Finance Minister Rogério Gouveia speaks about the region's efforts to attract start-ups and tech talent.
Madeira is also working on a payment network that will connect local merchants and simplify currency exchange for tourists. While the network is still in the feasibility study phase, it will likely use blockchain technology to allow tourists to top up and use a debit card across the archipelago for all products and services. The same card system is used to streamline government operations, including the disbursement of social benefits such as scholarships to residents.
“We want to see whether this model is feasible. We are using Madeira as a laboratory for such a model, similar to how the region has been used to test other technologies in the past,” noted Gouveia, adding that over the decades the archipelago has also served to validate other technologies in Portugal , such as 4G and cable TV.
Cointelegraph was on site during the second edition of Madeira Blockchain 2023, which took place from November 30th to December 1st. The conference brought together Web3 companies from around the world who are shaping the business models and technologies of tomorrow.
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