An archipelago in the middle of the Atlantic is looking for startups and technological talents to boost its economic growth. Web3 entrepreneurs are flocking to this region.
The Portuguese archipelago of Madeira has been praised for its natural beauty, but an aging population and the pressing need for a more diversified economy led its local government to explore emerging technologies, such as blockchain.
According to Rogerio Gouveia, finance secretary of the Madeira regional government, emerging technology companies represent almost 30% of companies in the Madeira free trade zone, a special economic area that offers tax benefits to companies, including one of the lowest corporate tax rates. in the European Union and exemption from capital gains tax for eligible companies.
"For companies wishing to establish a presence in the region, the main tax incentive is found in the Madeira free zone or the International Business Centre. This zone offers a preferential tax regime, limiting the corporate tax rate to a competitive maximum of 5%. It is important to note that this is not an offshore haven. This regime operates within a structured set of regulations and is subject to rigorous 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 for ticketing solutions, addressing issues such as overvalued secondary markets and ticket fraud.
Additionally, Madeira's tax incentives are associated with 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 stark contrast to the 50% illiterate population on the island during the 1970s.
Madeira is also working on a payments network that will connect local merchants and simplify currency exchange for tourists. Although still in the feasibility study stage, the network will likely use blockchain technology to allow tourists to load and use a debit card throughout the archipelago for all products and services. The same card system will be used to streamline government operations, including the payment of social benefits, such as scholarships, to residents.
"We want to see if this model is viable. We use Madeira as a laboratory for such a model, similar to how the region was used in the past to test other technologies," Gouveia said, adding that over decades, the archipelago has also served to validate other technologies in Portugal, such as 4G and cable television.
Cointelegraph was present 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 that are shaping the business models and technologies of tomorrow.
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