Canary Islands Special Zone (ZEC): pay 4% tax with your company
The most advantageous tax regime in Europe for companies in the Canary Islands. We handle the registration and compliance process. No minimum term commitments or fine print.
What is the ZEC?
The Canary Islands Special Zone or ZEC is a special tax regime integrated into the Canary Islands Economic and Fiscal Regime (REF), authorized by the European Commission and valid until 2032 with automatic renewal. It was created to offset the structural costs of the islands as an outermost region of the EU and aims to attract investment and diversify the Canary Islands economy.
It’s not a tax haven. It’s a regime with real substance: it requires genuine economic activity, jobs created in the islands, and an effective management headquarters in the Canary Islands.
Tax advantages of a ZEC entity
4% in Corporation Tax
The standard tax rate in Spain is 25%. With the ZEC, profits generated within the regime are taxed at 4%. For a company with a taxable base of €80,000, the annual savings exceed €16,000.
IGIC exemption
Transactions between ZEC entities and imports of goods are excluded from the Canary Islands General Indirect Tax.
Other exemptions
No taxation on Property Transfers or Documented Legal Acts for operations and assets linked to your ZEC activity.
No withholding tax on dividends and interest
Dividends distributed to foreign parent companies and interest paid to non-residents are exempt from withholding tax in Spain.
Compatible with RIC and DIC
You can combine the ZEC with the Canary Islands Investment Reserve and the Investment Deduction, accumulating incentives from the Canary Islands REF.
Requirements to register in the ZEC
To qualify for the program, your company must meet the following requirements:
- Newly created entity with registered office and effective management headquarters in the Canary Islands.
- At least one administrator residing in the islands.
- Activities included: technology, consulting, logistics, audiovisual, R&D, commerce, among many other sectors. Excluded are hotels, restaurants, financial services, and new construction.
- Minimum investment in fixed assets in the first two years: €100,000 in Gran Canaria and Tenerife; €50,000 in the other islands. Innovative and knowledge-intensive companies may be exempt from this requirement if they create additional jobs.
- Job creation: minimum 5 positions in capital islands (Gran Canaria and Tenerife), 3 in the rest, in the first six months from registration
Not sure if you meet the ZEC requirements?
At Asesorae, we review it. We tell you if your company qualifies, what steps to take, and if the tax savings truly justify the change.
For whom does the ZEC make sense?
ZEC is for companies, not for self-employed individuals. If you operate as a self-employed individual and your business volume justifies the change, it might be time to consider setting up a limited liability company (SL) that takes advantage of this special economic zone. The profiles that benefit most are:
Technology and digital services companies
Software, online platforms, telecommunications or digital marketing with equipment in the Canary Islands.
Consulting, engineering and professional services
Firms with their own established team in the islands that bill for high-value projects.
Logistics and trade
Operators who centralize their management in the Canary Islands, even if the goods do not physically pass through the islands.
Mainland Spain or foreign companies
Companies that open a branch or subsidiary in the Canary Islands to benefit from the reduced rate of 4%.
R&D and Industry
Projects with investment in productive assets and creation of stable employment in the archipelago.
Audiovisual and video game sector
Production companies, animation studios and content platforms that develop their activity in the archipelago.
How we manage your registration in the ZEC
The process has two official phases and we will guide you through them from beginning to end.
Application for prior authorization from the ZEC Consortium
We submitted the application for prior authorization to the Canary Islands Special Zone Consortium, along with the project description. The description must demonstrate the company's technical and financial solvency and justify its contribution to the islands' economic development. We handled the drafting and submission.
Obtaining prior authorization
The Consortium evaluates the application and, if it meets the requirements, issues the preliminary registration authorization. From that moment, you have 18 months (extendable for another 9) to complete the final registration in the ROEZEC.
Creation of the company
If the company is not yet incorporated, we handle its creation: notarization and registration with the Companies Registry. There are no advisory fees, you only pay the notary and registration costs.
Registration in the ROEZEC
We prepare and submit the application for registration in the ZEC Official Register of Entities to the Consortium, along with the company's incorporation documents. Registration is completed within 10 days of submission. From that moment, your company can apply the 4% tax rate.
Ongoing tax and accounting advice
Registration is the beginning, not the end. To maintain the ZEC regime, the entity must consistently meet the employment, investment, and activity requirements. We provide ongoing tax, accounting, and labor advice to ensure you don't lose the regime due to avoidable non-compliance.
Frequently asked questions about the ZEC
Is the ZEC only for large companies?
What happens if I stop meeting the requirements?
Can I combine the ZEC with the RIC?
Does the ZEC have indefinite validity?
We manage your ZEC
We take care of the descriptive report, the registration in the ROEZEC and ongoing tax advice so that you can maintain the regime without risks.
No long-term contract · REF Specialists
Content of this guide
Manage your ZEC company with specialists in the Canary Islands REF
If you want to know if your business fits into the ZEC catalog, if you meet the employment and investment requirements, or if the tax savings justify the switch, tell us about your situation and we’ll get back to you within 24 hours. No obligation and no hidden clauses.
