An archipelago in the middle of the Atlantic Ocean is looking for startups and tech talent to fuel economic growth. Web3 entrepreneurs are flocking to the area.
Portugal’s Madeira archipelago has been praised for its natural beauty, but its aging population and desperate need for a more diversified economy have prompted local governments to explore emerging technologies such as blockchain.
Emerging technology companies account for nearly 30% of companies in the Madeira Free Trade Zone, according to Rogerio Gouveia, Finance Minister of the Madeira Regional Government. This region is a special economic zone that offers tax benefits to businesses, including the lowest corporate tax rates. In the European Union, there is an exemption from capital gains tax for eligible companies.
“For companies looking to establish a presence in the region, the greatest tax incentives will be found in the Madeira Free Zone or the International Business Center. These regions offer preferential tax regimes that limit corporate tax rates to a maximum of 5%. This is why offshore It is important to note that it is not a haven: the scheme operates within structured regulations and is subject to rigorous audits by national tax authorities and the European Commission,” Gouveia told Cointelegraph at the Madeira Blockchain conference.
One of the companies behind Madeira’s Web3 ecosystem is Yacooba Labs, a software development company that uses blockchain technology in ticketing solutions to address issues such as high-cost secondary markets and ticket fraud.
Madeira’s tax incentives are also tied to other plans to shift the region’s focus from tourism to a technology-based economy, including an emphasis on information technology education in local schools. This is a sharp contrast to the 1970s, when the island’s illiterate population was 50%.
Madeira is also developing a payments network to connect local merchants and simplify currency exchange for tourists. Although still in the feasibility study phase, the network will use blockchain technology to allow tourists to load and use one debit card across the archipelago for all products and services. The same card system will also be used to streamline government operations, such as distributing social welfare benefits such as scholarships to residents.
“We want to see if this model is feasible, and 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. The archipelago has also served as a proving ground for other technologies in Portugal, such as 4G and cable TV.
Cointelegraph was on hand at the second edition of Madeira Blockchain 2023, which took place from November 30 to December 1. This conference brings together Web3 companies from around the world who are shaping the business models and technologies of the future.
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