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.