Madeira's Tech Revolution: The Atlantic's Emerging Blockchain Hub


Madeira's Tech Revolution: The Atlantic's Emerging Blockchain Hub
© Getty Images Entertainment/Octavio Passos

The Madeira archipelago, a picturesque group of islands in the middle of the Atlantic Ocean, is making headlines not just for its natural beauty but also for its ambitious economic transformation. Seeking to revitalize its economy and address the challenges posed by an aging population, Madeira is turning to emerging technologies, notably blockchain, to attract startups and tech talents.

Rogerio Gouveia, the finance secretary of the regional government of Madeira, highlighted the significant role of emerging-technology companies in the local economy. Nearly 30% of businesses in Madeira’s free trade zone now belong to this sector.

This zone is not just any area but a special economic region offering enticing tax benefits, including one of the lowest corporate tax rates in the European Union and capital gains tax exemption for eligible firms.

Madeira's Strategy: Tax Incentives and Technological Innovations

The key to Madeira's appeal lies in the Madeira free zone or the International Business Center.

"For companies aiming to establish a presence in the region, the foremost tax incentive is found in the Madeira free zone. This area offers a preferential tax regime, capping the corporate tax rate at a competitive maximum of 5%," Gouveia explained in an interview with Cointelegraph during the Madeira Blockchain conference.

He was quick to clarify that this is not an offshore haven but a well-regulated environment, subject to rigorous audits by national tax authorities and the European Commission. In addition to fiscal incentives, Madeira is exploring innovative applications of blockchain technology.

One such initiative is the development of a payment network intended to connect local merchants and facilitate currency exchange for tourists. While still in the feasibility study phase, this network aims to use blockchain technology to enable tourists to load and use a single debit card across the archipelago for all products and services.

This system will also be employed to streamline government operations, including the distribution of social benefits like scholarships. "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 noted, referencing Madeira’s history as a testing ground for technologies such as 4G and cable television in Portugal.