MADEIRA, THE ISLAND OF CRISTIANO RONALDO

If you ask around, they will tell you that Madeira is one of the many tourist destinations in the Atlantic Ocean, full of sea, sun, tourists and beer. But they are wrong. Despite being in the age of global and mass tourism, Funchal and its island have remained a unique place in the world, where everyone is a staunch defender of values, the environment – and money from their tax haven, which is among the most transparent in the world and, for this reason, generously tolerated by the European Union.

Far away, imaginative, beyond the terrible Pillars of Hercules. When the Portuguese, by chance (in 1418, a storm diverted GonçalvesZarco’s ship from its route off the African coast^[1]), found it uninhabited, they called Porto Santo the bay in which they were able to shelter from the swells. The islands appear in a Castilian geographical manual, called “El Libro del Conocimiento”, written just after 1385^[2]. A year later the Spaniards deliberately went there, spotted another piece of land, and called it Madeira (the island of wood) because of its abundance of this raw material. In 1425 the Portuguese monarchy began to build ports and towns^[3], and in 1440 the archipelago was divided into three captaincies^[4], Porto Santo, Machico and Funchal^[5].

Colonisation was slow and complicated, settlers were few and far between, and there was a struggle against an exuberant nature. But the island is a gold mine because of its laurel forests^[6], an intricate jungle of precious wood, with trees reaching 40 metres in height^[7]. Settlers built ingenious irrigation canals (the Levadas), a century after the arrival of man in Madeira agriculture and fishing flourished, enough to cover the needs of Portuguese bases throughout West Africa, up to the coast of Guinea^[8].

Then came the arrival of sugar cane, imported from Sicily, which replaced other crops and completely transformed the landscape: the city of Funchal became the most important sugar centre in the world, distributed by large companies from Flanders (Belgium and Holland^[9]). After the voyages of the explorer Vasco de Gama and the Portuguese settlement in Africa, the Arabian Peninsula and India, with the Treaty of Tordesillas (1494^[10]) Madeira and Funchal became the fundamental stop for all ships leaving for the colonisation of Brazil^[11]. This, in time, became a problem, as South America began to compete with Madeira’s sugar^[12].

The settlers reinvented themselves, importing vineyards, which to this day are one of the island’s main riches, allowing a local commercial bourgeoisie to flourish^[13]. Madeira wine, along with that of Oporto and Jerez, is one of the most famous and appreciated in the world at the time^[14]. In 1755, thanks to an agreement between the Portuguese and British monarchies, establishing Madeira as a free trade zone for wine products, the island became part of the industrial revolution^[15]. This treaty led to an invasion of British products on the Portuguese market, which was not competitive in terms of price and quality, and this created a structural crisis that Portugal is still suffering today, which led to the first waves of emigrants: to the United States, Brazil and Venezuela^[16].

The division of the world between Spain and Portugal decided by the Treaty of Tordesillas^[17]

Madeira reinvents itself again: due to the climate, the vegetation, the sea, the island becomes world famous for the treatment of pulmonary diseases, which triggers the tourism sector that makes the island rich again at the turn of the 19th and 20th centuries^[18]. After the end of the Second World War, due to general economic growth and improved transport, Madeira had to fight against dozens of new exotic and affordable tourist destinations^[19].

These were the years of the dictatorship of Antonio Salazar, Prime Minister of Portugal from 1932 to 1968, who with his corporatist and autarkic policies dragged the nation into the loss of its colonies and poverty – including Madeira^[20], where subsistence agriculture became the centre of activity and the only export commodity became the banana^[21]. To give the island hope of redemption, in 1980 the Portuguese democratic government turned Madeira into a Free Trade Zone, within which goods could circulate without duties and taxes. The MIBC (Madeira International Business Centre), managed by a state-owned company, the SDM Sociedade de Desenvolvimento da Madeira^[22], was founded to accommodate trading companies from all over the world. Within just five years, the MIBC generated 15% of the island’s GDP^[23].

While other tax havens are being fought by the international community, Madeira is an exception, pampered by the European Union and the International Monetary Fund, which, in May 2011, invested 78 billion euros in the local financial centre^[24]. In June 2021, Madeira received EUR 16.2 billion from the Recovery Fund, an event that was hailed by President Ursula Von der Leyen as “the beginning of a new phase” in the implementation of the European facility^[25].

Also at stake is the request for independence, launched by the vice-president of the regional government of Madeira, Pedro Calado, who sees Funchal in open competition with Gibraltar, Cyprus, Malta and other offshore centres, and therefore wants space to maintain the island’s competitiveness^[26]. True is, as stated by the independentist Teresa Leal Coelho in 2016, that it is impossible to compare Madeira and Panama, because Funchal offers not only tax benefits, but complete transparency on the ownership of companies and bank accounts^[27].

The generosity of the European Union

Cannes Film Festival, June 2016. From left: Antonio Banderas, Isabela Dos Santos, her husband SindikaDokolo^[28]

Of course, not all that glitters is gold. In 2015 the island had 260,000 inhabitants, but more than 1,500 new companies a year, and certainly not all founded by gentlemen in search of tax savings^[29]. Mossack y Fonseca, the Panamanian trust company whose thousands of criminal clients are at the root of the Panama Papers scandal, is also present in Madeira, and the president and vice-president of the region’s legislative assembly, Tranquada Gomes and Miguel de Sousa, are also involved in its affairs^[30].

ICIJ journalists also uncovered 20 years of hidden payments from ES Enterprises, the offshore company of the Portuguese banking group Espirito Santo (GES)^[31] , in serious financial crisis, since 2014, for undeclared loans (€3 billion) granted to Banco Espirito Santo de Angola^[32] – money linked to the friendship between the head of the family Ricardo Espirito Santo Salgado and Isabela Dos Santos, the unscrupulous daughter of the President of Angola, José Eduardo ‘Zedu’ Dos Santos, who over the years, together with her husband SindikaDokolo and her lover Juan Al Barazi, accumulated a fortune estimated at over EUR 3.3 billion^[33].

Also involved in the criminal investigation that follows these discoveries are Madeira MPs Pedro Queiroz Pereira, Angelo Correia and the Champalimaud family. The former, owner of the Semapa and Portucel group, has two companies at Mossack y Fonseca, with which he paid for the chartering of private jets in 2006. The second, a leading figure in the PSD and former minister, is linked to Anchorage Group Assets Ltd (Virgin Islands), but says he does not remember^[34]. The Champalimaud family, industrialists and bankers, have opened companies at Mossack y Fonseca: Luis de Mello Champalimaud and his father António have secret accounts at UBS^[35].

When Portugal joined the European Union in 1986, the pre-existing treaties were renegotiated^[36]. In 2000, the European Commission noticed that tax exemptions in Madeira exceeded the billion euro per year threshold, but that the 4000 companies in the Free Trade Zone employed no more than a thousand people. The Commission therefore launched an investigation to check whether Madeira’s Free Trade Zone tax regime complied with European State aid rules. Two years later, the investigation was closed without any result^[37].

The European Union considers that the geographical isolation of the island, located almost a thousand kilometres from the Portuguese coast, justifies this preferential treatment^[38]. The agreements concluded to frame the Autonomous Region of Madeira allowed the continuation of the benefits until 2027. In addition to income tax benefits, companies operating in the FTZ also benefit from significant advantages in terms of customs duties: raw materials and semi-finished products imported into the FTZ are exempt from import duties^[39]. In 2020, the MIBC recorded a 5.5% increase in the number of registered entities compared to the previous year, but the SDM fears that this is the last year, as the Portuguese government now seems intent on enacting stricter rules^[40].

For years, multinational companies, nabobs and celebrities have been channelling their billions into the coffers of Madeiran companies, such as Spanish footballer Xabi Alonso who, having transferred his image rights to Kardzali Ltda. Funchal, he received tens of millions from his years at Bayern Munich and Real Madrid here, from Adidas or other sponsors, for which he is now under investigation^[41]. Like his colleague Javier Mascherano (FC Barcelona), convicted in 2016 of tax fraud, perpetrated through his Anadyr Overseas Ltda. Funchal^[42].

Defendants in the trial on Madeira residence visas granted in exchange for bribes^[43]

Like JérômeValcke, former secretary general of FIFA, owner of the company Galactic Leisure Ltda. Funchal^[44]. Or Bashir Saleh Bashir, personal friend of the Libyan dictator Muammar Gaddafi, and director of the company Lap Overseas Ltda. Funchal^[45]. The German rock band BöhseOnkelz, who hid millions in revenues in Ciboule Trading and Marketing Ltda. Funchal^[46]. To finish with GianlucaVialli, owner of Crewborne in 1998 (even before the end of his career as a footballer), controlled by the GianlucaVialli Family Trust, whose manager is another Madeiran company, Belvedere Investments Limited which, between 2008 and 2013, lends up to 4.1 million without interest, which serves to finance Fish Eagle Trading e Serviços Ltda. Funchal^[47].

The multinational industry that has made the most use of Madeira is the Sonangol group – the Angolan state oil industry, which has created companies on the island to pay illicit dividends to friends and allies of President Dos Santos. Such as Odka Ltda., a consulting firm that received $11.5 million for management software: co-owner of Odka is the wife of MárioLeite da Silva, an advisor to Isabel Dos Santos^[48]. For years, the president’s daughter used her Uruguayan offshore company, Nielton SA Montevideo, to set up hundreds of companies in Funchal, each linked to an illegal business operation^[49]. When these companies were discovered in 2007, Nielton moved to Malta, where it is managed by João Rafael Martins Lobo de Campos^[50], who manages many other Dos Santos family companies in the Maltese archipelago^[51].

PepsiCo’s subsidiary, for example, used to be called Malpensa, Chevron’s subsidiary changed its name from Feingold to Livermore, and then there are companies from the ENI group, the Russian aluminium giant Rusal, the Swiss Swatch and the fashion industry, such as the Sorelle Fontana^[52] – some of whose directors manage dozens or even hundreds of companies^[53]. In addition to the offshore companies, there are the ship registries, also favoured by extremely favourable taxes^[54], and the branches of foreign banks (more than 30) that manage the assets of some of their wealthiest clients in Funchal^[55], with annual transactions of around 10 billion euros^[56]. As well as the many pensioners from different EU countries who, without being rich, happily spend their retirement years in a beautiful and extremely inexpensive place^[57].

Madeira, pearl of the past, ready for the future

January 1925: George Bernard Shaw takes dancing lessons in the garden of the Reid’s Palace Hotel in Funchal^[58]

It may seem strange, but the history of world tourism is written by tuberculosis. Since 1800, the most famous locations have been those where the climate is favourable to treating the sick, and Madeira is a sort of paradise in this sense, not only because of its climatic and environmental qualities, but also because it is far from and unreachable by the wars that have stained the last two centuries of European history^[59]. The first to send their ailing relatives were the royal families and the German, English, Dutch, Swedish, Austrian and Brazilian nobility, for whom luxurious hotels and others were built for their retinues^[60].

In 1894 the Englishman William Reid opened his first hotel on the west side of Funchal Bay, still famous for its tea, and from then on there was a flourishing of small family hotels and luxury international hotels – a development that increased exponentially after the opening of the international airport in 1963. Guests included the likes of George Bernard Shaw, who took dancing lessons during his time in Madeira^[61], Winston Churchill, who spent his time painting the view from his room^[62], nobles visiting Napoleon on St. Helena and stopping over in Funchal^[63], and Archduke Charles of Austria, the last emperor of the House of Habsburg, who died and was buried here^[64].

Today Madeira is a destination for mass tourism and specialised tourism for sailors, surfers, fishermen and mountain bikers^[65]. An island that focuses on environmental protection and sustainable development^[66], thanks to solar, hydroelectric and wind power systems^[67], and that accepts visas to stay in breathtaking locations for those who are willing to pay at least 350,000 euros to enter: mainly Chinese citizens, who have brought over two billion euros to Madeira since 2012^[68]. But the biggest driving force behind the island’s tourism comes from its most famous son, footballer Cristiano Ronaldo, who since 2015 has invested over 37 million euros in the construction of two hotels for the Pestana group – Portugal’s largest hotel operator^[69].

The Portuguese footballer is the symbol of Madeira as it is today: an island that is not afraid of cultural contaminations, proud of its biodiversity, ready to do anything not to spoil its beauty, proud of its past and its future, rooted in a series of autonomous policy decisions that, over the years, have proven to be right and forward-looking.

ESP010

^[1]https://artsandculture.google.com/entity/m06gqy5?hl=it

^[2]https://www.islamadeira.es/historia-de-madeira/

^[3]https://www.islamadeira.es/historia-de-madeira/https://www.corriere.it/esteri/21_maggio_19/dov-ceuta-perche-spagnola-dd7b20f4-b882-11eb-86a2-256e95d23aef.shtml

^[4]https://www.madeira-web.com/es/madeira/datos/historia.html

^[5]https://www.madeira-web.com/es/madeira/datos/historia.html

^[6]https://acmadeira-pt.translate.goog/index.php/o-contexto-da-regiao-autonoma-da-madeira?_x_tr_sl=pt&_x_tr_tl=it&_x_tr_hl=it&_x_tr_pto=sc

^[7]https://it.wikipedia.org/wiki/Laurisilva

^[8]https://www.islamadeira.es/historia-de-madeira/

^[9]https://www.madeira600.pt/pt-pt/historia

^[10]https://www.islamadeira.es/historia-de-madeira/

^[11]https://it.wikipedia.org/wiki/Trattato_di_Tordesillas ; https://www.madeira600.pt/pt-pt/historia