Madeira Lures Tech Startups and Digital Talent for Economic Diversification
Summary:
The Madeira archipelago in Portugal is appealing to tech startups and digital talent, particularly Web3 developers, to boost economic growth and diversify from its reliance on tourism. Already, emerging technology firms constitute nearly 30% of businesses in Madeira's free trade zone. The regional government offers favorable tax incentives, including one of the lowest corporate tax rates in the EU. Efforts to shift towards a technology-based economy include promoting IT education and developing a payment network using blockchain technology for tourists and government operations. The strategic move is not only aimed at economic diversification, but also addresses the challenges of an aging population.
In an attempt to invigorate its economic expansion, a secluded chain of islands in the Atlantic Ocean is reaching out to nascent tech companies and digital professionals. Particularly, the region sees an influx of Web3 developers. The Madeira archipelago in Portugal, recognized for its striking natural vistas, is addressing its aging populace and the necessity for a versatile economy by dabbling in advanced technologies such as blockchain. Rogerio Gouveia, the head of financial matters for the local government, mentioned that almost a third of firms in Madeira's duty-free commercial zone are tech startups. This zone is an economic region providing profitable tax advantages to companies, including one of the European Union's lowest business tax amounts and exemptions on capital gains tax for qualifying firms.
"For those businesses eager to gain a foothold in the region, the most enticing tax incentive lies within the Madeira free trading zone, also known as the International Business Center. Here, a preferential tax arrangement is in place, setting a competitive corporate tax ceiling of 5%. It's crucial to underline that this doesn't equate to a tax haven; rather the system operates under a strict regulatory framework, subject to close scrutiny by both national tax bodies and the European Commission," Gouveia explained to Cointelegraph during the Madeira Blockchain conference.
Behind the development of Madeira's Web3 infrastructure is Yacooba Labs, a software development venture using blockchain tools to devise ticketing solutions, tackling problems such as inflated secondary market prices and ticket fraud.
Moreover, the tax concessions available in Madeira are synced with other programs designed to transition the region away from tourism towards a digitally focused economy. This includes an emphasis on IT education within local schools, a marked divergence from the 50% illiteracy rates of the 1970s on the island. The regional finance authority, Rogério Gouveia, expounds on the region's push to entice tech startups and digital innovators.
Madeira is also in the process of establishing a payment network intending to unify local businesses and make currency exchanges simpler for tourists. Despite still being in the exploratory stage, the network will probably utilize blockchain tools to facilitate the use of a singular debit card across the islands, valid for all goods and services. This system will likewise serve to streamline government operations, including the dispensation of social beneficiaries such as study grants for local residents.
"We are keen on first establishing the feasibility of this model. We view Madeira as a testing ground for this sort of system, similar to how past technological trials have been held here." Gouveia stated, adding that Madeira has been instrumental in introducing and validating different technologies in Portugal, such as 4G and cable television. Cointelegraph’s team participated in the second Madeira Blockchain 2023 conference, held from November 30th to December 1st, which saw the participation of Web3 firms worldwide that are pioneering the technological landscape of the future.
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Published At
12/2/2023 5:05:55 PM
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