Today, the Canary Islands are an attractive destination for both tourists and entrepreneurs who wish to make a priority in the working world and start their own business. Would you like to incorporate a company in this community? We explain the advantages and requirements to do so!

The Canary Islands: a special economic zone

The Canary Islands Special Zone (ZEC) is known as a low tax zone created within the framework of the Economic and Fiscal Regime of the Canary Islands and authorized by the European Commission in January 2020, with the main objective of promoting the economic and social development of the territory.

Tax advantages offered by the ZEC

• Corporate income tax is payable at 4%.

• Non-resident income tax is not subject to withholding on dividend distributions.

• Transfer Tax and Stamp Duty

• The Canary Islands General Indirect Tax is exempt from taxation.

• Compatibility with Free Trade Zone

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How to operate in the ZEC?

If you wish to enjoy the benefits granted by the Canary Islands Special Zone, you must fulfill a series of requirements. Next, we will tell you what they are:

• Be a newly created entity or branch with its effective place of management in the geographical area of the ZEC.

• At least one of the legal representatives or administrators must reside in the Canary Islands.

• In the case of the Tenerife and Gran Canary Islands, you must make a minimum investment in fixed assets of 100,000 euros.

• In the case of non-capital islands (La Palma, La Gomera, El Hierro, Fuerteventura, Lanzarote) you must make a minimum investment in fixed assets of 50,000 euros.

• Create five jobs during the first six months, or only three jobs if it is a non-capital island.

• Prior authorization from the ZEC Consortium.

• Present a descriptive report of the economic activities to be developed, justifying solvency, viability, competitiveness and contribution to the productivity and development of the Canary Islands.

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Self-employment in the Canary Islands

Now, if your plan is to become self-employed in the Canary Islands, you should know that, in general terms, the steps are quite similar to the rest of Spain. Below, we explain the procedure for registering:

First of all, you will have to register with the Tax Authorities by filing form 036 or 037 at a Tax Office. In addition, you will have to select the Economic Activities Tax (IAE) that corresponds to your specific case.

After that, the next step will be to register in the Self-Employed Workers Regime (RETA), presenting the TA0521 form. You will have 60 days from the beginning of your activity.

In the same way, you will have to register for the Canary Islands General Indirect Tax (IGIC). For it, you must present the proof of census declaration of the State Tax Agency, to the Canary Islands Tax Agency, since it constitutes an indispensable step to become autonomous.

In this sense, you will have to use form 400 and present it at any Point of Attention to the Entrepreneur Single Business Window of the Canary Islands.

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What other steps do I need to take?

• In case you are planning to open a commercial premises to carry out your activity, it is important that you register at the City Hall to obtain the opening license.

• In the event that you are going to have workers in your charge, you will have to report it to the labor agency of your community, register them with the Social Security and keep a time record.

Setting up a company or starting a business is an important step in the world of work, and if you are at that point in your life, we bring you news: the Canary Islands is an excellent option to explore the entrepreneurial movement and join the business world!

Remember that, in TAS Consulting we offer consulting and help you manage each of your procedures so you can take your company to the next level, so do not hesitate and check the services we have for you on our website.