The effectiveness of the ZEC in employment as an economic policy instrument is three times higher than other incentives applied in the Canary Islands

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Canary Islands 05/09/2018.- The Consortium of the Canary Islands Special Zone (ZEC) has commissioned a study on the impact of the ZEC on the socio-economic structure of the Archipelago, which analyses the contribution and capacity to influence of this incentive of the Economic and Tax Scheme (REF) of the Canary Islands on regional business structure, as well as on growth, productivity and employment. The study, which has been prepared by the economist, Antonio José Olivera Herrera, concludes that, comparing the effectiveness of this incentive with other similar economic policy instruments applied in the Islands, the ZEC is the most efficient in the use of public resources.

 

Thus, the return from the ZEC, per million euros of public investment, is raised to a total of 55.41 new jobs created, as opposed to -also per million euros invested – the 13,01 jobs created in the 2000-2006 European Structural Funds or the 16.43 jobs generated through the Reserve for Investment in the Canary Islands (RIC) 1994-2007. In short, the ZEC is more than three times more efficient as an economic policy tool compared to other similar instruments applied in the Canary Islands.

 

With a public investment amounting to the 82 million euros between 2012-2016, the ZEC companies have created 4,525 jobs, with the particularity that in addition these are better paid jobs which are consolidated over time. The average pay in the ZEC entities is quantified at 29,971.81 euros, which is 16 % higher than the average paid in the Canary Islands, amounting to 25,941.52 euros, i.e. the ZEC companies pay an average of 4,030.29 euros more per year to their employees, which exceeds even the average wage that is recorded in the rest of the national territory.

 

The average workforce of the ZEC company exceeds that of the Canary Islands SMEs

It is stressed that in the context of the higher incidence of the economic crisis, the percentage of ZEC companies compared to those created with their same requirements was substantially higher. In 2014, 76 companies of similar characteristics were created in the Canary Islands, of which 59 were in the ZEC (77.63%), in 2015 77.39% and in 2016 26.29%. In 2017, in the Islands there are 5,502 companies that comply with the requirements required to operate within the framework of this tax incentive. The ZEC contributes 10.34% of the total Canary Islands firms equivalent in legal form, employment and authorized sectors.

 

 

The amount of the turnover, referred to the 2015 fiscal year, amounted to 40,881 million euros from 55,989 companies, of which, the ZEC companies contributed 1,102 million euros, i.e. 2.70% of the turnover of the Canary Islands. In addition, the ZEC companies invested 34.4 million euros in 2016 making an average investment of 166 118.08 euros, which means that the ZEC companies invest 1.35 % of the total and invest 3.95 times more than the average of the Archipelago.

Another data shows that the ZEC companies produce 5.6 times more than the regional average with an average of 4 million euros compared to 730 thousand euros of the Canary Islands SMEs. As regards the workforce, the average of the ZEC entities is 3.4 times higher than that of the Islands, with 16.76 workers compared to the average workforce of the Canary Islands companies which is 5 workers. While the average production per worker in the ZEC entities is 243 thousand euros, 67% higher than the average of the Canary Islands. As regards the contribution of the ZEC to the Islands’ economy, the study notes that the companies operating under this low taxation scheme with full legal certainty guaranteed by the European Commission and the Governments of Spain and the Canary Islands are larger than the regional average, more productive, pay better wages and their investment level is higher.

Jornada de Industria en la Ciencia

ZEC presents incentives at the conference of industry in science, organized by INEUSTAR

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Canary Islands.- The Canary Islands Special Zone (ZEC), together with the INtech Tenerife Science and Technology Park and IACTEC – the Canary Island Astrophysics Institute (IAC) Technological and Business Cooperation Area – presented the opportunities offered in the area within the framework of the Industry in Science Conference organised by the Spanish Association of Science Industry (INEUSTAR). The organizers announced that they will open a delegation in Tenerife, which will serve as a catalyst to attract companies from the sector in order to promote technology and innovation.

In the presentation of the opportunities in the area, IATEC and INTECH analysed the potential offered by the Canary Islands, in particular Tenerife, in terms of infrastructures, facilities, programmes to support qualified employment and synergies with other technological companies and the advantages offered by the ZEC. On behalf of the Consortium, the director of the Santa Cruz de Tenerife Investor Service Agency, Olga Martín, explained the tax advantages of this incentive to do business in the sector; Pablo Redondo from IACTEC explained those related to the promotional activities and Coqui García broke down the general and aid programs of INtech Tenerife.

These working sessions, inaugurated in Tenerife promote and establish synergies between entities with specific needs and companies that can cover them from sectors of industry such as technology, aerospace, astrophysics, medical equipment and bio applications, among others. The programme also included a section on the presentation of specific opportunities with the following speakers: Alex Oscoz from the IAC; Ramón García from the CTA Consortium; Manuel Collados from the EST Technological Development Project and Carlos Gutiérrez from NRT (Liverpool II). Along with these, Juan Ruiz Alzola presented Medical Equipment and Bio Applications and Alex Oscoz (IACTEC and IAC) Micro- and Nano-Satellites.

In this context, specific meetings were also held to announce the most representative projects currently in progress and those planned for the future, their implementation and the main challenges and needs related to the industry and proposals for collaboration. INEUSTAR is a private non-profit association of Spanish companies working for organizations dedicated to the conception, design, construction, operation and maintenance of scientific facilities and instruments in all fields, to contribute to the advancement of science and technology and the consolidation of innovation.

 

 

Videoconferencia con Sassari

ZEC participates in a round table on tax incentives and internationalisation organised by the chamber of commerce of Sassari (Sardinia)

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Canary Islands.- The Director of the Santa Cruz de Tenerife Investor Relations Agency of the Canary Islands Special Zone (ZEC), Olga Martín, and the Director of International Investment of the Canary Islands Economic Development Agency (PROEXCA), Carmen Sosa, participated in a round table organised by the Chamber of Commerce of Sassari (Sardinia), which focused on issues relating to the internationalisation of SMEs and the role of European Union (EU) tax incentives in contributing to the development of island economies. Representatives of various business associations interested in learning about the Canary Islands’ tax system attended this debate.

Both the ZEC and PROEXCA gave their views and explained to the participants the advantages of the Canary Islands’ Economic and Fiscal Regime (REF), particularly those of the ZEC, as well as the business opportunities offered by the Canary Islands as a geostrategic enclave from a tri-continental point of view. This round table, in which the Canary Island institutions participated via videoconference, is the starting point for a closer collaboration with the Sassari Chamber of Commerce in the future, taking into account the similarities that exist between the economies of both regions.