Canary Islands Special Zone
ZEC is an onshore European Tax Incentive in the Canary Islands. It is 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. The Corporate Tax Rate for a ZEC entity is just 4%, the lowest in Europe. ZEC operates under the full authority of the European Commission, Canary Islands Government and Spainʼs Ministry for Tax & Economy, making this the most transparent tax incentive in the European Union.
The low tax zone was created primarily for the promotion of the economic and social development of the Islands and to diversify their production structure. The zone was authorized by the European Commission in January 2000 and it is regulated under Law 19/94 in Spain.
Who can benefit?
ZEC provides the perfect corporate incentive platform for companies trading globally. This could entail Asian and American businesses looking for a management center in the EU and equally EU & UK businesses to launch international expansion plans. Our affiliates in the Canary Islands have advised and structured a diverse range of industries including online & internet, logistics, digital marketing, Contact Centers, International Sales & Marketing and R&D companies to set up in the ZEC. For businesses that don't have geolocation restrictions, the ZEC offers a corporate tax reduction of 80% compared to the European average.
Corporate Tax
In addition to Europe's lowest corporate tax rate of 4%, ZEC companies pay 0% withholding tax when repatriating dividends to onshore locations, VAT incentives as they are outwith the EU's VIES system. Stamp Duty & Transfer Tax is 0% when acquiring assets in the Canary Islands, and 0% VAT on imports relating to the business activity.
We recommend if you are a business owner or on the board of a company that you contact us to discuss the qualifying criteria so our team can examine the possibilities to assist in your businesses tax management.
