An archipelago in the middle of the Atlantic is looking for startups and tech talent to boost its economic growth. Web3 entrepreneurs flock to this area.
The Portuguese archipelago of Madeira is praised for its natural beauty, but its aging population and pressing need for a diversified economy have led its local government to explore emerging technologies like blockchain.
According to Rogerio Gouveia, Finance Secretary of the Madeira Regional Government, emerging technology companies represent almost 30% of companies in the Madeira Free Zone, a special economic zone that offers tax incentives to companies. Exemption from capital gains tax in the EU and for qualifying companies.
“For companies wishing to establish themselves in the region, the main tax incentive is the Madeira Free Zone or International Business Center. This zone offers a preferential tax regime, limiting the corporate tax rate to a competitive maximum of 5%. It should be noted that this is not a tax haven. The regime operates within structured regulations and is subject to strict audits by both national tax authorities and the European Commission,” Gouveia told Cointelegraph during the Madeira Blockchain Conference.
One of the companies behind Madeira’s Web3 ecosystem is Yacooba Labs, a software development company that uses blockchain technology to solve issues such as ticketing solutions, hypermarkets and ticket fraud.
In addition, Madeira’s tax incentives are related 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 contrasts with the island’s 50% illiteracy in the seventies.
Madeira also operates a payment network that connects local merchants and facilitates currency exchange for tourists. Although still in the feasibility study phase, the network is likely to use blockchain technology to allow tourists to load and use debit cards across the archipelago for all products and services. The same card system will be used to streamline government functions, including providing social benefits such as education scholarships to citizens.
“We want to see if this model is viable. We are using Madeira as a laboratory for such a model, similar to how the region has been used in the past to test other technologies,” Gouveia said, adding that for decades, the archipelago has helped Portugal test other technologies such as 4G and cable television.
Cointelegraph was on the floor during the second edition of Madeira Blockchain 2023, held between November 30 and December 1. The conference brought together Web3 companies from around the world who are shaping tomorrow’s business models and technologies.
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