What is the Canary Islands ZEC Zone?
The ZEC is a preferential fiscal incentive for registered entities conducting business both in and from the Canary Islands. The fiscal incentive has the full authority of the Spanish Government and the European Commission enabling accepted entities to a corporate tax rate of just 4%.
Unlike other EU Tax Incentives, the Canary Islands due to its proximity to Europe operates under the “Ultra Peripherico” status, which provides investors and companies with long term stability when considering corporate and fiscal structures.
Who is the ZEC Zone for?
The ZEC is ideal for companies that operate across Europe without geographical restrictions, for example, Customer Contact Centres, Technology companies especially Saas Software as a Service, Marketing & Sales operations, Backoffice Management Companies such as, Accounting, Payroll, and Service Support Centres.
Main ZEC Advantages;
- ZEC companies are subject to the Corporate Income Tax in force in Spain, but at the reduced rate of 4%, compared to 25%, average in the rest of Spain.
- ZEC companies are eligible for the EU Parent-Subsidiary Directive, meaning dividends paid by ZEC subsidiaries to parent companies are exempt from Withholding Tax. Spain has tax treaties signed with more than 80 countries. VIEW EXAMPLE Benefit of Distribution of Dividends ZEC Company
- Tax exemption on Transfer Tax and Stamp Duty (ITP-AJD).
- The supply of goods and services conducted between ZEC entities is exempt from, Canary Islands General Indirect Tax “IGIC”, similar in nature to VAT.
- It must be a newly-created company with its registered address and effective place of management within the geographical area of the ZEC.
- At least one of the Directors must reside in the Canary Islands, or the shareholders must appoint an existing resident of the Canary Islands.
- The company must make a minimum investment of 100,000 euros (in Gran Canaria and Tenerife) or 50,000 euros (in the rest of the islands) in fixed assets related to the activity within the first two years, following registration in the ROEZEC.
- It is necessary to create, at least, five jobs (in Gran Canaria and Tenerife) or three (in the other islands) during the first six months following registration in the ROEZEC and this average must be maintained during the time that the benefits are enjoyed.
- It is necessary to conduct activities that are permitted in the ZEC.
For more details about the Canary Islands Special Zone ZEC please contact: Rosana Mesa-Labrador E: firstname.lastname@example.org T: +34 608 291 189
CIC Director, Christopher Pennington, with Canarian Governments ZEC Consortium Vice President, Milagros Luis Brito