Madeira wants to grow its economy through innovative payment systems and companies.
Defi

Madeira wants to grow its economy through innovative payment systems and companies.

Seeking digital talent and entrepreneurs, an archipelago in the midst of the Atlantic wants to accelerate its economic growth.This area is seeing a surge of Web3 entrepreneurs.The natural beauty of Portugal’s Madeira archipelago has been lauded, but the local administration there is looking into new technology like blockchain because of the region’s aging population and urgent need for a more diversified economy. Emerging-technology companies account for almost 30% of businesses in Madeira’s free trade zone, a special economic zone that provides tax benefits to businesses, such as one of the lowest corporate tax rates in the EU and capital gains tax exemption for qualified firms, according to Rogerio Gouveia, finance secretary of the regional government of Madeira.

“For companies aiming to establish a presence in the region, the foremost tax incentive is found in the Madeira free zone or the International Business Center. This area offers a preferential tax regime, capping the corporate tax rate at a competitive maximum of 5%. It’s important to note that this is not an offshore haven. This regime operates within a structured set of regulations and undergoes rigorous audits by both national tax authorities and the European Commission,” Gouveia said during the Madeira Blockchain conference.

Yacooba Labs, a software development firm that uses blockchain technology for ticketing solutions to address problems like pricey secondary markets and ticket fraud, is one of the companies behind Madeira’s Web3 ecosystem.

Furthermore, the tax advantages offered by Madeira are linked to further measures that are intended to reorient the region’s economy away from tourism and toward a technology-based one. These measures include a focus on information technology education in nearby schools.This stands in stark contrast to the island’s 50% illiterate population in the 1970s.Additionally, Madeira is developing a payment network that will link neighborhood businesses and make it easier for visitors to exchange money.The network, which is now in the feasibility study stage, will probably make use of blockchain technology to let visitors load and utilize a single debit card for all goods and services throughout the archipelago.The distribution of social benefits to citizens, such as scholarships, would be streamlined by the use of the same card system for government operations.

“We want to see if this model is feasible. 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,” noted Gouveia,stating that other Portuguese technologies, including cable television and 4G, have also been validated by the archipelago over the years.