The Canary Islands attract entrepreneurs, who wish to register a company in low-tax jurisdictions. If you want to open a company in Spain, you can consider the option of establishing a commercial enterprise in the Free Economic Zone of the Canaries (FEZ).
The peculiarity of the Canaries FEZ is the special tax regulation. The purpose of the zone was set by the Fiscal Policy (REF) to improve the employment rating, as well as the infrastructure of the island as a whole.
Currently, the FEZ of Canaries is regulated by the special law Fiscal Regime Modification Act (Law 19/1994).
To set up a commercial firm in the FEZ of the Canary Islands, you must fulfill several requirements of the regulator in Tenerife:
- must have a registered address in this zone;
- an administrator is required to reside in the Canaries;
- a min capital requirement of €100,000 for Gran Canaria and Tenerife, and €50,000 for La Gomera, EI Hierro, La Palma, Fuerteventura and Lanzarote. You can deposit within 2 years from the date of registration;
- in the first 6 months after establishing, it is required to create at least 3–5 jobs, depending on the selected island;
- it is possible to engage only in certain types of activities in the FEZ, which you can find below:
- Food industry.
- Pharmacology (plant growing).
- Textile activities.
- Furniture industry.
- Chemical industry.
- Activities for the manufacture of machinery, metal structures, various types of water and machine transports.
- Repair activities.
- Work to cleanse nature.
- Activities related to energy production.
- Audio and video activities.
- Trading activity.
- Travel, transport, advertising services.
- Legal, accounting, consulting services.
- Architecture and engineering.
- Therapeutic activity.
- Services related to performing arts, cultural parks and entertainment, sports.
- Innovative and technical activities.
It should be noted, it is possible to register a company in the Free Zone of the Canaries with a non-resident.
What tax regime applies in the FEZ for investors?
- A corporate tax is 4%.
- The supply of goods and services carried out in FEZ is not subject to IGIC (as VAT). The standard IGIC rate is 7%.
A tax exemption on the FEZ of this jurisdiction can be applied with other REF benefits.
It is possible for a non-resident to receive an exemption from the income tax:
- On dividends, paid by subsidiaries of SEZ, as well as on income from the transfer of capital to third parties, are exempt from tax.
- These exceptions do not apply to FATF jurisdictions.
Those, who wish to register a company in the Free Zone of the Canaries, should know, it will be necessary to obtain the approval from the consortium of FEZ in order to become a member of the FZ.
Further, the registration procedure is as follows:
- An authorization.
- A submission of a package of documents with a description of the activity.Documents are considered approximately 2 months.
- After obtaining the approval of the consortium, an application is submitted to the Register of FEZ. To complete the procedure you will need: a registration application, a tax number (CIF), a document confirming the registration of the firm.
If you still have additional questions about how to establish an enterprise in the Free Zone of the Canary Islands, you can contact the professionals of YB Case for ordering legal advice on the establishment a commercial firm in Spain.