Do you know about the Canary Islands Special Zone?
The Canary Islands Special Zone (ZEC) is a low tax zone created for the promotion of the economic and social development of the Canary Islands.
The ZEC was authorized by the European Commission in 2000 and is regulated pursuant to Law No. 19/94 of the 6th of July, 1994.
In addition to being the best tax regime in Europe, the Canary Islands offer all of the infrastructure, services and advantages of a European lifestyle, and have a privileged geostrategic position to operate efficiently in Africa.
As an added benefit, the Canary Islands provide legal certainty and have skilled human capital.
The tax advantages of the Canary Islands Special Zone
The main benefit is a reduced Corporate Tax rate of 4%, compared to an average of 22% in the European Union (EU), in addition to other incentives.
Dividends distributed by ZEC subsidiaries to their parent companies registered in other countries are exempt from withholding, except for countries without information exchange with Spain.
Dividends distributed by ZEC subsidiaries to their parent companies registered in other countries are exempt from withholding, except for countries without information exchange with Spain.
Exemption from the Canary Islands Indirect General Tax (the equivalent of VAT in the Canary Islands) for imports and transactions between ZEC entities.
Exemption from the Transfer and Stamp Tax.
Exemption from the Transfer and Stamp Tax.
Compatibility with the tax-free areas, Reserve for Investment and the Regime of Deductions for Investments in the Canary Islands.
What are the requirements to become a ZEC entity?
Be a branch or newly-created entity with its registered address and effective place of management in the Canary Islands.
At least one member of the administration must reside in the Canary Islands.
Create at least five jobs during the first six months (in the case of non-capital islands, the requirement is at least three jobs).
The Prior authorization by the ZEC Consortium.
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