Chris Burton is a licensed corporate service provider and Market Leader in Worldwide Company Formations and Offshore Bank Accounts
Chris Burton is a licensed corporate service provider and Market Leader in Worldwide Company Formations and Offshore Bank Accounts

The best tax advantages for your business in Europe - 4% onshore corporate taxation.

What is the Zec Canarias?

Tenerife and the Canary Islands offers the best taxation in Europe namely the "Zona Especial Canaria"(Zec Canarias – Canary Islands Special Zone). This fiscal incentive was authorised by the European Commission in the year 2000, in order to promote investment and social improvements within all of the Canary Islands. The corporate taxationfor Zec Canarias companies is currently 4% instead of 25% in mainland Spain.


What are the requirements to be a Zec Canarias entity?

The Zec Canarias is aimed at all those entities and branches that are going to develop an industrial, commercial or service activity in the islands (check the list of permitted activities here).

The requirements for these companies include:

  1. Being a brand new incorporation or sub branch of an existing company.
  2. A minimum of one director must be a resident in The Canary Islands
  3. A Minimum investment of € 100,000 (in Gran Canaria or Tenerife) or € 50,000 (in El Hierro,, Fuerteventura, La Palma, La Gomera or Lanzarote ) in fixed assets. For example an investment into property.
  4. Create at least 5 jobs (for Gran Canaria or Tenerife) or 3 (other islands) in the first six months of the activity, maintaining this annual average throughout the life of the company in the Zec Canarias.
  5. Establish the corporate purposes within the Zec Canarias.

What are benefits of being a Zec Canarias entity?

  1. Corporation Tax of 4%.
  2. Exemption in the Tax on Patrimonial Transmissions and Documented Legal Acts.
  3. Exemption in the IGIC (the equivalent of VAT in the Canary Islands) to import (both raw material, investment material or finished products), and exemption in operations between Zec Canarias entities.
  4. Application of the International Double Taxation Agreements, and exemption at source from withholding for repatriation of capital applying the parent-subsidiary Directive.
  5. Elimination of the restriction on the application of the deduction for internal double taxation of dividends.

What sectors can be developed in the Zec Canarias?

Without a doubt, the Zec Canarias offers development opportunities for many sectors including online marketing, gambling or marketing activities or ICT, to highlight a few.

In the case of ICT, the Canary Islands offer an ideal business hub where to develop activities related to technologies that are applicable to other sectors, including tourism, training or smart destinations. Hence, many companies have already decided to settle in the Zec Canarias and carry out their data mining activities, call center services, software and digital services, or simply establish their technological platforms.

Having this said, we could agree that the ICT segment is in the midst of an expansion phase in the archipelago, mainly due to:

  1. location links with EU and Africa
  2. Leading technology research
  3. Optimal service and communication infrastructures
  4. Highly qualified and competitive staffing

All the above, along with the benefit that the Canary Islands have one of the highest standards of living in whole of Europe and possibly the world (cost of living, leisure, climate, security, internet speed), places the islands in a sort after situation for both companies and for their employees. It's no wonder that many international digital nomads are taking advantage of this opportunity of setting up there head quarters on the island.

Chris Burton Consultants are able to offer a professional Zec Canarias company formation service along with a physical office and canary island resident director service.

Chris Burton is a licensed corporate service provider and Market Leader in Worldwide Company Formations and Offshore Bank Accounts