Madeira, Portugal

Economy | Madeira International Business Center | Tourist Industry | Energy

🇵🇹 Madeira officially the Autonomous Region of Madeira (Portuguese: Região Autónoma da Madeira), is one of the two autonomous regions of Portugal, the other being the Azores. It is an archipelago situated in the North Atlantic Ocean, in a region known as Macaronesia, just under 400 km (250 mi) to the north of the Canary Islands and 520 km (320 mi) west of Morocco. Madeira is geologically located on the African Tectonic Plate, though the archipelago is culturally, economically and politically European. Its total population was estimated in 2021 at 251,060. The capital of Madeira is Funchal, which is located on the main island's south coast.

The archipelago includes the islands of Madeira, Porto Santo, and the Desertas, administered together with the separate archipelago of the Savage Islands. The region has political and administrative autonomy through the Administrative Political Statute of the Autonomous Region of Madeira provided for in the Portuguese Constitution. The autonomous region is an integral part of the European Union as an outermost region. Madeira generally has a very mild and moderate subtropical climate with Mediterranean summer droughts and winter rain. Many micro-climates are found at different elevations. Madeira, originally uninhabited, was claimed by Portuguese sailors in the service of Prince Henry the Navigator in 1419 and settled after 1420. The archipelago is considered to be the first territorial discovery of the exploratory period of the Age of Discovery.

As of 2017, it was a popular year-round resort, being visited every year by about 1.4 million tourists, almost six times its population. The region is noted for its Madeira wine, gastronomy, historical and cultural value, flora and fauna, landscapes (laurel forest) that are classified as a UNESCO World Heritage Site, and embroidery artisans. The main harbour in Funchal has long been the leading Portuguese port in cruise liner dockings, receiving more than half a million tourists through its main port in 2017, being an important stopover for commercial and trans-Atlantic passenger cruises between Europe, the Caribbean and North Africa. In addition, the International Business Centre of Madeira, also known as the Madeira Free Trade Zone, was created formally in the 1980s as a tool of regional economic policy. It consists of a set of incentives, mainly tax-related, granted with the objective of attracting foreign direct investment based on international services into Madeira.

Economy The Gross domestic product (GDP) of the region was 4.9 billion euros in 2018, accounting for 2.4% of Portugal's economic output. GDP per capita adjusted for purchasing power was 22,500 euros or 75% of the EU27 average in the same year. The GDP per employee was 71% of the EU average.

Madeira International Business Center The setting-up of a free trade zone, also known as the Madeira International Business Center (MIBC) has led to the installation, under more favorable conditions, of infrastructure, production shops and essential services for small and medium-sized industrial enterprises. The International Business Centre of Madeira comprises presently three sectors of investment: the Industrial Free Trade Zone, the International Shipping Register – MAR and the International Services. Madeira's tax regime has been approved by the European Commission as legal State Aid and its deadline has recently been extended by the E.C. until the end of 2027. The International Business Center of Madeira, also known as Madeira Free Trade Zone, was created formally in the 1980s as a tool of regional economic policy. It consists of a set of incentives, mainly of a tax nature, granted with the objective of attracting inward investment into Madeira, recognised as the most efficient mechanism to modernize, diversify and internationalize the regional economy. The decision to create the International Business Center of Madeira was the result of a thorough process of analysis and study. Other small island economies, with similar geographical and economic restraints, had successfully implemented projects of attraction of foreign direct investment based on international services activities, becoming therefore examples of successful economic policies.

Since the beginning, favourable operational and fiscal conditions have been offered in the context of a preferential tax regime, fully recognised and approved by the European Commission in the framework of State aid for regional purposes and under the terms for the Ultra-peripheral Regions set in the Treaties, namely Article 299 of the Treaty on European Union. The IBC of Madeira has therefore been fully integrated in the Portuguese and EU legal systems and, as a consequence, it is regulated and supervised by the competent Portuguese and EU authorities in a transparent and stable business environment, marking a clear difference from the so-called "tax havens" and "offshore jurisdictions", since its inception. In 2015, the European Commission authorised the new state aid regime for new companies incorporated between 2015 and 2020 and the extension of the deadline of the tax reductions until the end of 2027. The present tax regime is outlined in Article 36°-A of the Portuguese Tax Incentives Statute. Available data clearly demonstrates the contribution that this development programme has brought to the local economy over its 20 years of existence: impact in the local labour market, through the creation of qualified jobs for the young population but also for Madeiran professionals who have returned to Madeira thanks to the opportunities now created; an increase in productivity due to the transfer of know how and the implementation of new business practices and technologies; indirect influence on other sectors of activity: business tourism benefits from the visits of investors and their clients and suppliers, and other sectors such as real estate, telecommunications and other services benefit from the growth of their client base; impact on direct sources of revenue: the companies attracted by the IBC of Madeira represent over 40% of the revenue in terms of corporate income tax for the Government of Madeira and nearly 3.000 jobs, most of which qualified, among other benefits. Also there are above average salaries paid by the companies in the IBC of Madeira in comparison with the wages paid in the other sectors of activity in Madeira.

Regional government Madeira has been a significant recipient of European Union funding, totalling up to €2 billion. In 2012, it was reported that despite a population of just 250,000, the local administration owes some €6 billion. Furthermore, the Portuguese treasury (IGCP) assumed Madeira's debt management between 2012 and 2015. The region continues to work with the central government on a long-term plan to reduce its debt levels and commercial debt stock. Moody's notes that the region has made significant fiscal consolidation efforts and that its tax revenue collection has increased significantly in recent years due to tax rate hikes. Madeira's tax revenues increased by 41% between 2012 and 2016, helping the region to reduce its deficit to operating revenue ratio to 10% in 2016 from 77% in 2013.

Tourist Industry Pearl of the Atlantic, island of eternal spring… Madeira well deserves its fanciful nicknames and the affection visitors and locals alike feel for this tiny volcanic island that offers so much.

Tourism is an important sector in the region's economy, contributing 20% to the region's GDP, providing support throughout the year for commercial, transport and other activities and constituting a significant market for local products. The share in Gross Value Added of hotels and restaurants (9%) also highlights this phenomenon. The island of Porto Santo, with its 9-kilometre-long (5.6 mi) beach and its climate, is entirely devoted to tourism.

Visitors are mainly from the European Union, with German, British, Scandinavian and Portuguese tourists providing the main contingents. The average annual occupancy rate was 60.3% in 2008, reaching its maximum in March and April, when it exceeds 70%.

Whale watching has become very popular in recent years. Many species of dolphins, such as common dolphin, spotted dolphin, striped dolphin, bottlenose dolphin, short-finned pilot whale, and whales such as Bryde's whale, Sei whale, fin whale, sperm whale, beaked whales can be spotted near the coast or offshore.

Energy Electricity on Madeira is provided solely through EEM (Empresa de Electricidade da Madeira, SA, which holds a monopoly for the provision of electrical supply on the autonomous region) and consists largely of fossil fuels, but with a significant supply of seasonal hydroelectricity from the levada system, wind power and a small amount of solar. Energy production comes from conventional thermal and hydropower, as well as wind and solar energy. The Ribeira dos Soccoridos hydropower plant, rated at 15MW utilises a pumped hydropower reservoir to recycle mountain water during the dry summer. In 2011, renewable energy formed 26.5% of the electricity used in Madeira. By 2020, half of Madeira's energy will come from renewable energy sources. This is due to the planned completion of the Pico da Urze / Calheta pumped storage hydropower plant, rated at 30MW. Battery technologies are being tested to minimise Madeira's reliance on fossil fuel imports. Renault SA and EEM piloted the Sustainable Porto Santo—Smart Fossil Free Island project on Porto Santo to demonstrate how fossil fuels can be entirely replaced with renewable energy.

Madeira, Portugal 
<b>Madeira, Portugal</b>
Image: Bengt Nyman

The Madeira Island has a population of over 251,060 people. For the location of Madeira see: Funchal.

To set up a UBI Lab for Madeira see: https://www.ubilabnetwork.org Twitter: https://twitter.com/UBILabNetwork

Twin Towns - Sister Cities Madeira has links with:

🇵🇭 City of Muntinglupa, Philippines
Text Atribution: Wikipedia Text under CC-BY-SA license

Antipodal to Madeira is: 163,-32.75

Locations Near: Madeira -17,32.75

🇵🇹 Funchal -16.905,32.648 d: 14.5  

🇮🇨 San Cristóbal de La Laguna -16.314,28.478 d: 479.6  

🇮🇨 Santa Cruz de Tenerife -16.25,28.467 d: 481.7  

🇮🇨 Arona -16.667,28.1 d: 518  

🇮🇨 Las Palmas -15.44,28.13 d: 535  

🇮🇨 Las Palmas de Gran Canaria -15.44,28.13 d: 535  

🇮🇨 Telde -15.42,27.993 d: 550.3  

🇮🇨 San Bartolomé de Tirajana -15.573,27.926 d: 553.6  

🇮🇨 Santa Lucía de Tirajana -15.533,27.917 d: 555.5  

🇮🇨 Arrecife -13.548,28.96 d: 534.9  

Antipodal to: Madeira 163,-32.75

🇦🇺 Port Macquarie 152.908,-31.43 d: 19053.5  

🇦🇺 Coffs Harbour 153.117,-30.3 d: 19040  

🇦🇺 Lismore 153.29,-28.815 d: 18990.1  

🇦🇺 Taree 152.45,-31.9 d: 19019.7  

🇦🇺 Gold Coast 153.416,-28.002 d: 18955.6  

🇦🇺 Southport 153.405,-27.974 d: 18953  

🇦🇺 Redland City 153.25,-27.583 d: 18916.5  

🇳🇨 Nouméa 166.45,-22.267 d: 18801  

🇦🇺 Port Stephens 151.917,-32.75 d: 18979.1  

🇦🇺 Logan 153.109,-27.639 d: 18908.4  

Bing Map

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