Canary Island Special Zone
Attractive tax incentives in the European Union
Company formation
The Canary Islands have some of the most attractive tax incentives in the European Union, boasting the lowest onshore corporate tax rate of just 4%. Unlike other jurisdictions in Europe, the Canary Island Tax Incentives are permanent due to their 'Ultra-peripheral' status.
The Canary Islands are considered to be at a logistical disadvantage being in Europe's Outermost Regions, therefore, so long as they remain part of Spain, The Canary Islands will always enjoy additional Tax advantages. An important fact for business owners to consider when planning medium and long-term strategies.
Prime Commercial Sales, along with its partners have created ZEC Structures for more than 60 companies from Digital, Tech, Renewable Energy & Contact Centre industries, helping clients to raise Capital Investment in excess of €50 million in along the way.
ZEC project registration
To qualify for a ZEC license Prime Commercial Sales creates a bespoke feasibility study and business plan on behalf of its clients to incorporate the following information:
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Name of the Canary Islands special zone entity
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Legal structure of the entity
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Applicant/s, Equity & Roles
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Proposed notification office
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Fiscal address and headquarters of effective address/domicile (branch)
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Amount and the proposed location of investment
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Number of jobs to be created
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Registration fee guarantee
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Documentation presented with the application
Sections
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Description of the economic activities to be undertaken
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Accreditation of the feasibility of the project: profit and loss account, three-year balance sheet forecast and financing table
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Accreditation of the economic solvency and technical soundness of the project
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Accreditation of the ability to compete at an international level in the case of companies planning to carry out economic activities in international markets
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Accreditation of the contribution to the economic and social development of the Canary Islands.
ZEC qualifying criteria
To qualify for a ZEC license Prime Commercial Sales creates a bespoke feasibility study and business plan on behalf of its clients to incorporate the following information:
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The company must be a newly created company with its fiscal address and effective place of management within the geographical area of the Canary Islands.
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At least one of the Executive Directors or the Company Secretary/Administrator must be resident in the Canary Islands (A Position often provided by Prime Commercial Sales and its partners by way of a Management Service Agreements).
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The Company is required to make an investment within the first 2 years of trading. The investment levels are €100k if located in Tenerife or Gran Canaria and €50k if located on any other island. As part of the accounting exercise, all CapEx and some OpEx expenditures can be allocated to this investment.
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The ZEC company should have a minimum of 5 employees on the company payroll and have its operations physically based within Tenerife or Gran Canaria within the first 6 months of registration. Only 3 Employees are required if the company is based on any other island.
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The activity of the ZEC entity must be accepted in the NACE list of activities outlined by the European Commission.
