CanariasZEC reasons to invest

CanariasZEC, six reasons to invest

Promoción

The Canary Islands – The Canaries are so much more than a sun and beach destination. In the last few years, the islands have been projecting opportunities for business investment, given they have one of the most attractive tax regimes for companies operating on an international scale. In this context, the Canary Islands Special Zone (ZEC) has increased weight as it has become an effective fiscal policy instrument to attract companies that focus on diversification of the regional productive fabric through the establishment of entities working in key sectors with growth prospects. These companies are thus attracted to the islands and have made the archipelago a competitive economic base with high added-value employment.

In the international promotion of the Canary Islands as an investment destination, the ZEC is a strategic element, since it is a tool that offers companies the most competitive taxation in Europe with a 4% rate on Corporate Tax. A great many advantages can be added to this: distribution of dividends without withholding tax at source, the exemption of the Canary Islands General Indirect Tax (IGIC) on imports, on the delivery of goods and the provision of services between ZEC companies, as well as the exemption of the Tax on Capital Transfers and Documented Legal Acts, in addition to the possibility of combining these incentives with other tax and economic incentives aimed at promoting business activity in the Canary Islands or offering the maximum accumulation of aid authorised by the European Union.

All these advantages added to the geographical strategic position of the Canary Islands for international trade, have led more than six hundred companies to operate from the archipelago on international markets using the islands as a business platform under the conditions set by this aid with a regional aim, which has been in operation since 2000.

Leading sectors of the economy enter the Archipelago through the CanariasZEC

Promoción

The Canary Islands – The Canary Islands Special Zone (ZEC) has become a privileged observatory for analysing the profiles of companies in the islands from economic sectors which contribute to diversifying the productive structure. Thanks to its economic model which concentrates most of its Gross Domestic Product (GDP) in tourism, the Canary Islands are working towards economic diversification, with the ZEC as one of its strategic tools.

ZEC as one of its strategic tools. Therefore, companies linked to the latest generation sectors are beginning to be implemented in the archipelago. The regional market, for more than two million residents, receives approximately fifteen million tourists a year. These numbers work in favour of a region that also has the advantages of an excellent communication network, qualified staff trained in European universities and an unequalled geostrategic position, which make it a gateway to African markets. This is coupled with the legal security of this territory which is part of the European Union (EU).

One of the most interesting goals aimed for is in the Information and Communication Technologies field (ICTs). The ICTs is one of the big industries that in recent years has not stopped growing and has acquired an important weight in the framework of this incentive. In fact, at the end of 2018, 22% of the companies of the Official Register of the Canary Islands Special Zone Entities (ROEZEC) are carrying out activities related to ICTs in the Islands. This sector involves a high degree of technological innovation. Another sector that has features highly is renewable energy: there are more and more companies related to a wide range of subsectors within this field such as: production, transportation; manufacture, commercialisation of electrical energy from renewable sources, manufacturing, marketing and intermediation of equipment; equipment installation and repair; engineering and technical advice; research and development (R&D); training and ICTs applied to the sector, among others. In the latter case, the Islands have the best conditions for their development, as well as being a natural laboratory for the development of marketing-oriented prototypes.

Other spearheads are the establishment of a very active pole of companies related to the development of software and computer applications. The strengths of the Canary Islands are once again a highly-qualified staff and the possibility of using the Archipelago for its geostrategic position as a platform for business internationalisation. The Islands have also began to host an important core of companies linked to the audiovisual sector. The Canary Islands have magnificent conditions as a natural setting, with a wide landscape diversity and climatic conditions that allow outdoor shooting throughout the year, with highly-qualified personnel, sea and air connections and excellent infrastructure, among others. But there is more. Activities focused mainly on economic sectors which are particularly sensitive to the singularities offered by the Canary Islands such as technology and innovation, outsourcing and business services, services related to port infrastructure and tourism support, in addition to distribution, logistics and transport, naval repair or maintenance or the blue economy are some of the areas that offer business opportunities that are starting to flourish.

The ZEC is working on the promotion for the attraction of business projects in these sectors, which are considered key elements for the projection of the Canary Islands in the context of the world economy. A very low taxation regime (with a Corporate Tax of 4% against 20% of the EU average), a distribution of dividends without withholding tax at source and the maximum accumulation of aid are some of the attractions of this economic policy tool which offers the most advantageous taxation in Europe. It is also one of the instruments that projects the Canary Islands as a business destination.

Prsentación de la ZEC en Londres

CanariasZEC presents its 4% taxation to London

Promoción

  The Canary Islands – The forum entitled The Canary Islands: a unique location in the EU for investment and growth, is the framework where the Canary Islands tax advantages have been presented.

The Canary Islands Special Zone (ZEC) presented its tax advantages to investors from the strategic sectors of technology and renewable energies in the Lincoln Centre in London. These advantages are a true added value to the opportunities in the Canary Islands as it is tricontinental business base for international business operations within the framework of the European Union.

At this business and investment forum entitled The Canary Islands: a unique location in the EU for investment and growth, which was organised by the ZEC, representatives of the Canary Islands Government and the London School of Economics (LSE) also took part, and those attending received information regarding the multiple tax advantages the Canaries offer to companies in the United Kingdom (UK) that are looking for alternatives to invest or relocate in view of the Brexit. This market strengthens the Canary Islands’ position as a highly competitive region because of its fiscal and economic environment for investors, companies and multinationals who value the profits made from settling in the Islands. Indeed, the Canaries are a strong region thanks to their tax regime, the quality of life they offer and their strategic geographical position to expand in markets worldwide, and particularly in the markets of West Africa. Furthermore, the UK and the Canary Islands have always had strong social and economic ties.

This market strengthens the Canary Islands’ position as a highly competitive region because of its fiscal and economic environment for investors, companies and multinationals who value the profits made from settling in the Islands. Indeed, the Canaries are a strong region thanks to their tax regime, the quality of life they offer and their strategic geographical position to expand in markets worldwide, and particularly in the markets of West Africa. Furthermore, the UK and the Canary Islands have always had strong social and economic ties.

  An excellent location and a privileged door opening to Europe

A key aspect of the debate was the opportunity that the Canary Islands offer to UK businesses, within certain sectors, to remain in the EU market. Only the tourism, construction, finance and retail sectors are excluded from these tax benefits. One of the main attractions of the Canary Islands is its generous tax regime created with the objective of encouraging foreign direct investment. It was emphasized that all the advantages of this aid to the operating of businesses are applicable to companies settled in the Canary Islands and who have an economic activity there. In exchange for this reduced taxation, these companies must contribute to diversify the economic activity of the zone. The other two main conditions are job creation and investment made in the islands.

The director of the ZEC, Olga Martín, detailed some of the tax policies of the Canaries which are decisive for foreign investors. She explained: “Companies can not only benefit from a corporate tax rate at 4%, which is much lower than the average 20% in the rest of the EU, but investments in research and technology can get a deduction of 35 to 55% too, and in the case of the film industry, it can reach up to 45%”.

With regard to the British market, a door is now opening to growth opportunities in order to get new investment projects from companies located in the UK who wish to keep their activity within the member states, taking advantage of the competitive advantages offered by the low taxation of an incentive that guarantees full legal certainty, the distribution of dividends without withholding at the source and the maximum accumulation of aid authorised by the EU, among its many attractions. All these aspects simply help to be more competitive.

  With this forum, the ZEC has closed its programme of actions scheduled for 2019. These actions are regulated by the 2014-2020 Promotion Plan. This document, which has been approved by the Governing Council, assesses on a yearly basis the countries and sectors where action must be taken. International action carried out this year has mostly been directed to markets with potential such as London, the USA, Germany, Sweden, France, Poland and Denmark. Likewise, it has included specific initiatives to reverse and sector missions in order to consolidate business ecosystems in the fields of information and communication technologies (ICT), technology and innovation, outsourcing and business services, renewable energy, naval industry-related activities and services linked to activities that support tourism, among others.