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5 Qualifying Criteria for Canary Islands ZEC Companies

The Canary Islands has a unique onshore tax system providing excellent conditions to foster investment and trade across the EU.


This system is included on a permanent basis within the EU Legal Framework through Art 299.2 of the Treaty on European Union, offering exceptional advantages to both investors and companies.



What is the Canary Islands ZEC?


The ZEC is a low tax zone created within the framework of the Canary Islands Economic and Tax Regime (REF) for the promotion of the economic and social development of the Islands and to diversify their production structure.


ZEC was authorized by the European Commission in January 2000 and it is regulated in the Law number 19/94 of the 6th of July, 1994.


Companies accepted by the ZEC Commission benefit from a 4% Corporate Tax Rate, the lowest in the European Union.


What is the Qualifying Criteria for Canary Islands ZEC Companies?


➔ Present a full business project as part of the official application, to the ZEC Commission.


➔ The business must be a newly-created entity, or branch, with its registered address and effective place of management within the geographical area of the ZEC.


➔ Have at least one member of the “Administration” (Resident Director or Company Secretary) must reside in the Canary Islands.


➔ It must make a minimum investment of 100,000 euros (in Gran Canaria or Tenerife) or 50,000 euros (in the case of La Gomera, El Hierro, La Palma, Fuerteventura or Lanzarote) in fixed assets related to the activity within the first two years following its registration.


➔ It is necessary to create, at least, five jobs (in Gran Canaria or Tenerife) or three (in the other islands) during the first six months following its registration. This average must be maintained during the time that the benefits are enjoyed.


➔ Having a company purpose matching the authorized activities, It is necessary to conduct activities that are permitted in the ZEC. Available online at:


https://canariaszec.com/wp-content/uploads/List-of-economic-activities-included-according-NACE-Rev.2-2018-1.pdf


Any entity or branch which intends to carry out an industrial, commercial or service activity included in the list of authorized can set up in the Islands. ZEC supports a broad range of activities both in the industry, service and wholesale sectors. However, some sectors, are highlighted because they constitute relevant business niches for potential investors who contribute to the modernization of the production and commercial mechanisms in the Islands.

https://canariaszec.com/

Novara Capital Group is an international tax & capital investment consulting firm. We specialise in Corporate Structuring, European Union Tax Incentives, IP Positioning, and Transactions / M&A. We provide intelligent corporate structures, advice, and an integrated service which cross delivers in businesses. We advise companies globally to accelerate international growth, optimise net profits, and enhance equity value leveraging Intellectual Property and Licences. Our in-house experts specialise in International Tax Law, Company Law & Cross Border Jurisdiction, Investment & Asset Management, Mergers & Acquisitions, and Operational Management.

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