The Canary Islands are not only a special travel destination but also offer other advantages. Companies also relocate their company to the Canary Islands or there are opportunities to set up a new company. Due to its remote location, the Canary Islands receive special tax treatment. Corporate tax from 1 to 5%. Sales tax of approximately 4.5%. In order to benefit from these tax advantages, you can register the new company as a so-called ZEC company.
Requirements for are:
It must be a new company. At least one person authorized to manage must be resident in the Canary Islands. At least 100,000 euros investment in fixed assets within 6 months. At least 5 jobs must be created. Registration in the register by December 31, 2006 at the latest
The Canary Islands special zone is a low-tax area that was created within the Canary Islands Economic and Tax System (REF) with the aim of promoting the economic and social progress of the archipelago and expanding production structures. The Canary Islands Special Zone was approved by the European Union in January 2000. Following the approval, the Spanish state government implemented it in the form of the necessary legal changes in the Canary Islands economic and tax system (Royal Decree Law 2/2000 of June 23 amending Law 19/1994 of July 6 and Royal Decree Law 12 / 2006 of December 29 amending Law 19/1994 and Legislative Decree / 2/2000 of June 23). The benefits of the Canary Islands Special Zone can initially be claimed until December 31, 2019, an extension is subject to the approval of the European Commission. Registration in the official ZEC company register (ROEZEC) can be made until December 31, 2013.
Service companies can settle anywhere in the archipelago. Companies whose activities include the production, processing, refinement and distribution of goods must settle in the areas specifically designated for this.
ZEC companies are subject to the corporate tax applicable in Spain at a reduced tax rate of 4%. ZEC companies are exempt from the tax on capital transfers and documented legal acts in the following cases:
- When acquiring goods or rights that serve the business purpose within the geographical scope.
- In all corporate transactions of ZEC companies with the exception of the dissolution of the company.
- For legal acts linked to transactions made by these companies within the geographical scope of the ZEC.
It must be a newly established company with its registered office and actual business address within the geographical scope of the Canary Islands special zone. At least one person authorized to do business must reside in the Canaries. The investment in fixed assets required to carry out the planned activity must be at least EUR 100.00 (for the islands of Gran Canaria and Tenerife) or EUR 50,000 (for Fuerteventura, Lanzarote, La Gomera, El Hierro or La Palma). The investment must be completed no later than two years after approval as a ZEC company. Depending on whether they are islands with a provincial capital or not, the company has to create at least five or three jobs in the Canaries within a period of up to six months after the operating license, and this average number of employees during the entire activity as a ZEC- To retain businesses. The company's corporate purpose within the ZEC must be one of the permitted activities.
- Manufacture of office machines, data processing equipment and devices, electrical engineering, precision engineering and optics.
- Paper, publishing and printing industry and duplication of image, sound and data carriers.
- Electricity generation from renewable energy sources.
- Prefabricated materials for the construction industry.
- Chemical industry.
- Mechanical engineering
- Services related to the use of natural resources and waste disposal.
- Maintenance and repair of aircraft engines.
- Transport and communications.
- Research and Development.
- Audiovisual production.
Investors who want to settle in the ZEC must first apply to the board of the special zone. The board of the ZEC assesses the applications and decides on the inclusion in the ZEC register. After provisional approval has been granted by the board, the company can be registered in the official ZEC commercial register. Just contact us if you have any further questions about the Canary Islands special zone.
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