ZEC low tax zone


The Canary Islands Special Zone (ZEC) is a low tax zone cre- ated 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 pro- duction structure.

ZEC was authorized by the European Commission in January 2000 and it is regulated in the Law number 19/94 of the 6th of July, 1994.


In general terms, any entity or branch which intends to carry out an industrial, commercial or service activity included in the list of authorized activities.


  • It must be a newly-created entity or branch with its regis- 
tered address and effective place of management within 
the geographical area of the ZEC.
  • At least one member of the administration must reside in 
the Canary Islands.
  • It must make a minimum investment of 100,000 euros (in 
Gran Canaria or Tenerife) or 50,000 euros (in the case of La Gomera, El Hierro, La Palma, Fuerteventura or Lanzarote) in fixed assets related to the activity within the first two years following its registration.
  • It is necessary to create, at least, five jobs (in Gran Canaria or Tenerife) or three (in the other islands) during the first six months following its registration and this average must be maintained during the time that the benefits are en- joyed.
  • It is necessary to conduct activities that are permitted in the ZEC.


  • Growing of medicinal and pharmaceutical plants • Fishing and aquaculture
• Food industry
• Textile industry • Manufacture of products of wood and furniture
• Paper, Chemistry and pharmaceutical industry
• Manufacture of glass, ceramic and construction products; Manufacture of metal structures
• Manufacture of computer, electronic and optical products; manufacture of other machinery and equipment
• Building of pleasure and sporting boats
• Manufacture of unmanned aerial vehicles
• Manufacture of bicycles and invalid carriages
• Repair of ships and boats, aircraft and spacecraft and other transport equipment;
  • industrial and other articles repair
 Natural resources, desalting, waste management and recycling
• Generation, transport and distribution of electricity from renewable resources
• Audio and video production and distribution
• Rehabilitation, reforming, remodeling or renovating buildings or spaces
• Wholesale trade and commission trade
• Transportation and support activities
• Travel agencies and reservation services
• Legal and accounting activities
• Activities of head offices; management consultancy activities (coordination cen-
  • tres and intra-group services excluded)
 Architectural and engineering activities; technical testing and analysis • ICT related activities
• Research and development (R+D)
• Security and investigation activities
• Training
• Consultancy
• Advertising and market research
• Other professional, scientific and technical activities
• Therapeutic and assistance activities in residential centres
• High performance training and physical well-being centres
• Theme parks


Corporate Income Tax

ZEC Entities are subject to the Corporate Income Tax in force in Spain, at the reduced rate of 4%. This special rate will apply to a maximum amount of the income tax, de- pending on the number of jobs created.

Income Tax Nonresident (IRNR) exemption

  • Dividends paid by ZEC subsidiaries to parent companies resident in another country as well as the interest and other income from transfers to third parties of capital and capital gains from property, obtained without a per- manent establishment are exempt from withholding.
  • The exemption described below shall also apply to in- comes from the residents of any state where such in- comes are paid by a ZEC company and come from op- erations materially and effectively carried out within the geographical area of the ZEC.
  • These exemptions do not apply when the income is ob- tained through countries or territories with which there is not an effective exchange of tax information, or when the parent company has its tax residence in one of these countries or territories.

Property Transfer Tax and Stamp Duty (ITP-AJD)

ZEC entities are exempt from these taxes in the following cases:

  • Acquisition of goods and rights for the activity develop- 
ment of the Entity in the geographical area of the ZEC
  • Corporate operations done by the ZEC entities, except 
their dissolution.
  • Documented legal acts related to transactions of these 
entities in the geographical area of the ZEC. 
Canary Islands General Indirect Tax (IGIC) 
In the ZEC the supply of goods and services done within ZEC entities, as well as imports of goods made by them, shall be exempt from taxation by the IGIC. It is similar in nature to VAT, although there are major differences such as the lower tax rates. 
Compatibility with other REF tax incentives 
According to the limit of the Community Law on accumu- lation of financial support and under certain conditions, ZEC tax advantages are compatible with other REF tax in- centives like the Reserve for Investment, the regime of de- ductions for investments and the tax-free areas.

More information and authorisation procedure:

zec@infokapital.com / info@infokapital.com