Austrian couple outpaced the technological results in Madeira

Austrian couple outpaced the technological results in Madeira

António Larguesa - Jornal de Negócios

Download PDF
Original article

Connecting Software, headquartered in Vienna and with offices also in Slovakia and the US, has opened a technology center in Funchal, where 12 people already work at and found more than tax benefits. Connecting Software expects to soon increase the team in Funchal up to two dozen employees.

Thomas and Maria Berndorfer were on vacation in Tenerife when they heard a radio program about tax havens in Europe, in particular, the Canary Islands and Madeira. As the government of Slovakia, where they had installed the first development center, taxes were increasing, they researched more about the country and the tax conditions for companies in the Madeiran offshore. "We came to Funchal and fell in love with this wonderful island", Connecting Software's CEO tells Negócios.

In addition to the tax benefits, which were at the origin of the investment decision made in 2017, the Austrian couple was surprised by the local support - from politics to the university - and to find "an ambitious country that strives to become even better" and in which "the economic crisis seems to have caused a positive change in people's mentality". What was expected to be a mere representation office with five people, has become a technological hub that already has 12 people and is expected to reach two dozen soon.

"We started by bringing in developers and, thanks to the excellent outcomes, we now have 'software testers' here and we have also created a marketing department. The next step is to add a support team. We are convinced about the potential. And, in the future we can expand to Brazil because of the proximity to the US and speaking the same language", points out the entrepreneur, who in 2007 realized the difficulties of companies when using various incompatible applications, and set up a business that provides a platform and products to integrate and synchronize the software.

Only with his own investment - "he did not want to compromise his vision by bringing banks or venture capital into the company", he created the Slovak operation in Malacky because of the tax advantage, lower labor costs, and the proximity to the headquarters in Vienna; and then opened a commercial office in Denver (Colorado) to serve American customers, before entering the International Business Center, known as the Madeira Free Trade Zone.

With an annual turnover of around two million euros, Connecting Software currently employs around 40 people of 12 nationalities. It has customers in a hundred countries worldwide, with a total of one thousand customers from the public and private sectors. This is the case with the Ministry of Justice and Parliament in Canada, with several government services in New Zealand or with large private companies, such as Securitas (security) or the British Compass Group, which is considered the world's largest supplier of food services.


"Strikes are a bothersome thing"

Why is Madeira Island attractive?

In addition to the lower taxes, the leading Connecting Software lists other factors relevant to technology investors and found in this archipelago.


Upon arriving in Funchal, he has found "a lot of local support": at the political level, through the investment office, at the university, and in the tax advice of consultant Mad.Intax in the Free Zone.


"Why work in the cold of the North [European] or in developed urban areas, if I can live in paradise?" The quality of life, which includes nature, food, or good weather, manages to "attract talents from all over the world".


For those who "value low flow and long-term partnerships with the team", it is a benefit to be in a small region and to have "more influence over local operators", while in other countries they face more competition.


It is in the US that 40% of software licenses are sold. "And with the Madeira time zone, you can work with Europe and have opening hours overlapping the west and east coast, which is comfortable and effective."

The businessman criticizes the Portuguese government for "forcing companies to treat employees like children".

How has your experience as an investor in Portugal been? In the US and in Austria, individuals take over their own lives. One feels individualism and the freedom to make decisions. Here in Portugal, ancient thinking makes it difficult to succeed quickly. The Government obliges companies to be responsible for everything concerning employees and to treat them like children. Sometimes it's even embarrassing, especially when you have highly qualified specialists on the team. Strikes are also a bothersome matter as they greatly reduce the flow of work. Here people want someone to work things out for them. As an investor, I prefer to work with those who know what they want and how to achieve it.

What is the biggest challenge?

So far it is the lack of knowledge about the culture. Good business requires stability. Any market, in itself, is unpredictable enough, so you need sustainable relations with the Government and with people inside and outside the company. Then you can act like an entrepreneur - because you know what to expect. But I am satisfied with the conditions this year and a half. I am grateful for the openness and for being welcomed in Madeira. We are happy to be growing here, hiring more people and paying taxes for that.