The Canary Islands – The Canary Islands Special Zone (ZEC) is an incentive which was created within the framework of the Economic and Fiscal Regime (REF) of the Canary Islands. Its aim is to create jobs in sectors that contribute to the diversification of the regional economy and that therefore boost its development.
For this purpose, the ZEC can accept all entities that intend to develop an industrial, commercial or service activity according to an extensive list of permitted activities.
One of the most attractive advantages of this incentive is a 4% reduced corporate tax rate, which is applicable to companies that settle and develop an economic activity in the islands.
In exchange for this reduced taxation, companies must contribute to diversify economic activities, which is the ultimate objective of this incentive. Hence, they have to meet some conditions: a minimum number of job creations and a certain amount of investment.
Requirements to create a company under this tax regime
Your entity or branch must be newly created and its central office and management headquarters must be located in the geographical area of the ZEC.
At least two of the company administrators must live in the Canaries.
You must make a minimum investment of 100,000 € (for the islands of Tenerife and Gran Canaria) or 50,000 € (in the case of La Gomera, El Hierro, La Palma, Fuerteventura or Lanzarote) on fixed assets affected by the activity, within the first two years of authorisation.
You must create three to five jobs depending on the location (three for the smaller islands, five for Tenerife and Gran Canaria) within six months following the authorisation and you must hold this average for the duration of your ZEC registration.
The corporate purpose of your entity or branch must be included within the activities allowed by the ZEC