Doing Business in The Canaries

Doing Business in the Canaries
A guide to investing, working and living in the Canary
Contents
1. INTRODUCING THE CANARY ISLANDS 1.1. The Canary Islands, a strategic enclave between continents 1.2. Reasons for investing in Canaries 1.2.1 Market acces 1.2.2 The best Tax Regime in Europe 1.2.3 Access to talent 1.2.4 Access to knowledge 1.3. Macro-Economic Data 1.3.1 Canary Island GDP 1.3.2 Population. Socio-economic data 1.3.3 Labour market 7 8 10 11 18 20 22 24 24 26 26 2. BUSINESS OPPORTUNITIES 2.1. Bio-technology and Health Sciences 2.2. Renewable Energies and Clean Energies 2.3. Information and Communications Technologies (ICTs) 2.4. Outsourcing 2.5. Audio-visual Sector 2.6. Optics, Astrophysics and Space Technologies 2.7. Logistics and Transport 2.8. Advanced Tourist Services 3. INCENTIVES AND FINANCING 3.1. Economic and Fiscal Regime General (REF) 3.2. Economic and fiscal regime of the canary islands (REF): investment incentives 3.2.1.The Canary Islands Special Zone (ZEC) 3.2.2.The Reserve for Investments in the Canary Islands (RIC) 3.2.3.Deduction for investments in the Canary Islands 3.2.4.Deduction for Production of Tangible Assets in the Canary Islands 3.2.5.Fiscal advantages of the Indirect Canarian Tax 3.2.6.Special Register of Ships and Shipping Companies 3.2.7.Canarian Free Trade Areas 4. HOW TO SET UP IN THE CANARY ISLANDS 4.1. Institutional support 4.2 Legal forms in Spain 4.3. Steps required to set up a business activity 4.4. Work and residence permits 4.5. Employment regime 4.6 Complementary information 5. LIFE IN THE CANARY ISLANDS 5.1 The warmth of nature 5.2 Cosmopolitan culture 5.3 Leisure and sports 5.4 Health 5.5 Education 5.6 Largest overseas communities in the Canary Islands 6. ADDRESSES OF INTEREST 29 31 32 33 35 36 38 40 42 45 46 48 50 52 59 64 67 69 71 75 76 78 84 88 90 91 93 94 96 98 100 101 102 111
Doing Business in the Canaries

A guide to investing, working and living in the Canary Island
Introducing the Canary Islands
1.1
The Canary Islands, a strategic enclave between continents
1. INTRODUCING THE CANARY ISLANDS
The Canary Islands are one of the seventeen autonomous regions of Spain and as such, they are part of the European Union (EU) and the Euro Zone. Just over 1,000 kilometres from the Spanish Mainland and about 100 km from Africa, the Canary Island Region is set in the Atlantic Ocean as a strategic enclave between three continents: Europe, Africa and America. From an administrative point of view, they are divided into two provinces: Las Palmas, made up of the islands of Gran Canaria, Fuerteventura and Lanzarote, and Santa Cruz de Tenerife, consisting of Tenerife, La Gomera, La Palma and El Hierro. Capital status is shared between the cities of Las Palmas de Gran Canaria and Santa Cruz de Tenerife. Their unique natural conditions have maintained the Canary Islands as a top-flight holiday destinations for decades, bringing over 10 million foreign and 1,5 million Spanish tourists a year to visit the islands, attracted by the weather and the kind and friendly people.
1.2
Reasons for investing in Canaries
The combination of all these characteristics together with one of the highest standards of quality of life in Europe, the special tax regulations and other features listed below, make the Canary Islands a business centre with enormous potential: Geo-strategic situation and ties Investment incentives Qualified and competitive human resources Excellent services and communications infrastructure State-of-the art technological research
1.2.1 Market access

a) Location and ties
Their ideal geographic position as the southern Gateway to the European Union and tri-continental bridge between America, Africa and Europe, makes the Islands a magnificent platform for trade and business. Historically and culturally, the Islands have close ties with Latin America and they also have strong trading and institutional links with West Africa. They make an excellent platform for trade, logistics and transferring services and technology between continents as they are on the main international trading routes. This enables investors to use the Canary Islands for tackling strategic projects in West Africa and Latin America, with all the legal security implicit in basing their business in Europe.
GENERAL DATA Total surface area 7,447 km 1,114 km of coastline 257 km of beaches Min. 15C- max. 24C Spanish GMT Euro 41,732,626 m 19,806 2,126,769 285,59 hab/km2 13,750,092 40 hour week 641,40 / month 2% 8 (6 International) 10 12 4,261 km
Canarias
Average annual temperature Official language Local time Currency G.D.P. 2011 G.D.P. per capita 2011 Population 2011 Population density Tourist arrivals 2011 Working Week Minimum wage 2011 Retail Price index 2011 Facilities: Airports Commercial Ports Marinas Road network
Provincia de Sta. Cruz de Tenerife
Provincia de Las Palmas

LANZAROTE
LA PALMA Santa Cruz de La Palma TENERIFE
Arrecife
Santa Cruz de Tenerife LA GOMERA San Sebastin de La Gomera Valverde EL HIERRO
GRAN CANARIA
Puerto del Rosario
FUERTEVENTURA Las Palmas de Gran Canaria
10
11
1.2
b) Excellent transport and communications facilities

Airports. The Canary Islands have eight airports, six of which are international, receiving over 34 million passengers a year. These allow for around 1,500 direct flights a week to all the main European cities with the leading international airlines, including low-cost companies that have been booming in recent years. By way of example, in 2009, the Canary Islands had 467 direct flights a week to the United Kingdom and 334 to Germany.
Ports. There is an extensive network of commercial and fishing harbours and marinas in the Canary Islands, with the Port of La Luz y Las Palmas (Gran Canaria) and the Port of Santa Cruz de Tenerife among the leading ports of Spain in passenger and cargo traffic, both between the Islands and from and to the rest of the world. It is worth mentioning that the Canary Islands are on all the shipping routes between Europe, America, Africa and, in recent decades, Asia too, making it a strategic ship supply and repair station in the Mid Atlantic.
Canary Island ports in figures for 2011 Connections with Africa, on the other hand, include 38 flights a week to the following destinations: - Agadir / Al Massira (Morocco) - Casablanca (Morocco) - Dakhla (Morocco) - El Aain (Morocco) - Goulimime (Morocco) - Marrakesh (Morocco) - Praia (Cape Verde) - Nouadhibou (Mauritania) - Dakar (Senegal) Cargo traffic in Canary Island airports in 2011 (kilograms)
TOTAL PASSENGER TRAFFIC CARGO TRAFFIC
6,197,785 38,322,368
49,328,894
Connections with America include flights to the following destinations: - Caracas (4 flights a week)
Shipping connections with Africa include routes to: Angola, Benin, Cape Verde, Cameroon, Congo, Ivory Coast, Gabon, Gambia, Ghana, Guinea Bissau, Guinea Conakry, Liberia, Mauritania, Morocco, Nigeria, Senegal, Sierra Leone, South Africa and Togo.
No direct weekly flights (main destinations):

UNITED KINGDOM REST OF SPAIN GERMANY SWEDEN NORWAY FINLAND BELGIUM
Source: ISTAC, INE, AENA
Passenger traffic in Canary Island airports in 2011

TOTAL
Source: AENA
30,052,550
467 448 334 45 41 31 29
12
1. Morocco: Port of Casablanca, Port of Agadir, Port of Tarfaya, Port of Dakhla, Port of Layoun 2. Mauritania: Autonomous port of Nouakchott Autonomous port of Nouadibou 3. Senegal: Autonomous port of Dakar 4. Gambia: Port of Banjul 5. Guinea Bissau: Port of Guinea Bissau 6. Guinea Conakry: Autonomous port of Conakry 7. Sierra Leona: Freetown Port 8. Liberia: Port of Monrovia 9. Cte dIvoire: Port of San Pedro Autonomous port of Abidjan 10. Ghana: Port of Tema Port of Takoradi 11. Togo: Autonomous port of Lom 12. Benin: Autonomous port of Cotonou
3 4 5 6 7 20 8 9 10 11 12 13 14
15 13. Nigeria: Port of Lagos Port Harcourt 14. Cameroon: Autonomous port of Douala 15. Guinea Ecuatorial: Port of Malabo / Port Bata 16. Gabon: Port of Libreville 17. Congo: Autonomous port of Point Noir 18. Angola: Autonomous port of Luanda Autonomous port of Lobito 19. Namibia: Port of Walvis Bay 20. Cabo Verde: Puerto Grande Port of Mindelo 16 17
18
19
13
1.2
Canary Island ports are connected to over 500 ports throughout the world by some thirty-odd shipping lines. They have spacious, modern docks and large storage and operations capacity, apart from many container terminals in constant expansion, vehicle terminals, large cold storage capacity and high quality facilities for passengers and cruise ships. On the other hand, the Islands have an extensive inter-island air and sea transport network, with a large number of connections that are ideal for carrying both passengers and cargo. This facilitates business between the islands, which in turn, have an extensive road network. This allows fast and effective distribution for the supply chain of products and services.
Telecommunications. The Canary Islands are the ideal place for setting up and operating any kind of information and communication technology-related activity, as you can see from the wide satellite cover (around 50 satellites provide services in Canaries) and their fibre optic submarine cable connections. As for mobile telephone services, they are no different from the rest of Spain and Europe as mobile phone use is similar to that of the Spanish Regions with the highest Gross Domestic Product (GDP) and it is on a par with the European Union average. Several international telecommunications companies operate in the Islands, with a high degree of deregulation and with the latest generation technologies in information transmission. As for mobile telephone services, there is full GSM service cover, UMTS multi-media networks are in place, as is ADSL technology for high-speed internet connections. With regard to hard-wired networks, the growth of ADSL services and fibre optic lines is the result of all the modernisation that the Canary Islands have been through in recent years. High-speed, broad-band internet connections offer enhanced security and standards in line with the rest of Spain and Europe.
Transport infrastructure in the Canary Islands 2011

AIRPORTS COMMERCIAL PORTS
8 (6 international) 10-State ports 17-General Interest (Reg. Govt.) 14-Harbours and jetties (Reg. Govt.) 17+1 Dock (Reg. Govt.) 2 State Ports 4,467 km
MARINAS ROAD NETWORK
Source: ISTAC, AENA, PUERTOS DEL ESTADO, INE, GOBIERNO DE CANARIAS
14
15
1.2
There are currently 11 submarine cables connecting the Canary Islands with the Spanish Mainland and countries such as South Africa, Portugal and Italy, and regions such as South East Asia and America. In 2011 started a new fibre-optic underwater cable, Pencan 8, which increased the reliability and power of the existing cables with its capacity of 5,12 Tbps. The 2,000 kilometres of submarine cable network that connect Cadiz with Tenerife, Gran Canaria and La Palma, was installed in the first six months of 2011, after the singing of the contract between Alcatel Lucent and Canalink. This network will cover the exponential growth in demand for greater broadband internet connectivity in the Canary Islands. In this context, the new amenities supports for new IP applications and services, high speed data centres used in green energy research, for telecommunications services, the public administration and the academic and research community, especially with the connection of the telescopes located at Roque de los Muchachos, on the island of La Palma. D-ALIX Connection The submarine cable network will also support the D-ALIX data centre, an essential component of ALIX, which is located in Granadilla de Abona (Tenerife), making the Canary Islands a high availability, reliable connectivity point with West Africa. The network of this infrastructure has been designed to meet high quality and robustness criteria to cover the technical and service requirements demanded by all telecommunications operators providing their services in Spain. These are also necessary in order to effectively bridge the digital divide between the Canary Islands and the rest of Europe.
16
1.2
1.2.2 The best Tax Regime in Europe

Traditionally, the Canary Islands have always had a different and stable tax and economic regime to off-set the island factor, fragmentation and distance in comparison with the rest of Spain and Europe. To this end, they have their own Economic and Tax Regime (REF, from the Spanish) under Spanish legislation and with the full authorisation of the European Union (EU). The REF contains a series of tax breaks for setting up and operating business activities, including: Company Tax Rates 2010
(Source: Consorcio de la ZEC)
The table below shows how the Companies Tax rate levied on companies registered in the Special Canary Island Zone is the best in Europe.
France Italy Spain Germany United Kingdom Portugal
34,4% 31,4% 30,0% 29,8% 28,0% 26,5% 26,0% 25,5% 24,0% 23,2% 19,0% 12,1% 4,0%
The chance to pay less in Company Tax
Flat 4% tax rate on ZEC companies Up to 90% reduction on the tax base for undistributed net profits 50% rebate on the production of tangible goods More beneficial tax deductions on investments than in the rest of Spain
Finland Netherlands Greece Average Poland Ireland
Many exemptions from INDIRECT TAXES Set up in FREE PORTS with amazing economic advantages
For setting up a company For increasing capital For acquiring capital goods Canary Islands
Economic advantages for inporting and exporting and for actively processing goods
18
19
1.2
1.2.3 Access to talent

The Canary Island population is younger than the national average for Spain, but highly qualified and offers more competitive labour costs than in the rest of Spain. The low turnover of staff also means that companies can win the loyalty of their employees to a greater extent, something that does not occur elsewhere in the European Union. Furthermore, according to data from the National Statistics Office (INE, from the Spanish), the average labour cost per employee in the Canary Islands in third quarter of 2011 amounted to 2,077.86 /month compared with an average of 2,456.91 /month for the rest of Spain, putting the Canary Islands below the national average. The Canary Islands have two public universities, one on each of the two main islands: the University of La Laguna, in Tenerife, and the University of Las Palmas de Gran Canaria, in Gran Canaria. Between the two of them, they had a total of 50,562 students enrolled in 2011, over half of whom were studying science and technology. Nearly 5,000 students graduate from these universities every year. The Tenerife borough of La Orotava, on the other hand, is immersed in the process of creating the first private university in the Islands, the European University of the Canary Islands which is set to start classes in September 2013.
The linguistic abilities of the Canary Islanders is generally striking, basically due to the high percentage of foreign residents in the Islands, the long-standing tourist tradition of the Islands and the fact that there is a large number of bilingual schools. Number of bilingual schools: 3 French schools 7 German schools 1 Japanese school 1 American school 1 Norwegian school 16 British schools 2 Swedish schools
20 21
1.2
1.2.4 Access to knowledge

The Canary Islands are the Spanish region with the highest increase in total R+D+i spending in recent years. In line with the current European Union (EU) policy, the Canary Island Government allots major resources to developing the Islands as a technological and business centre with a view to diversifying their economy and promoting sectors that generate high value added. Support to innovation in the Autonomous Region of the Canary Islands is provided by the two public universities and institutes of technology, which provide the highly qualified human resources necessary for developing the range of business activities and turn the Islands into a genuine R+D+i laboratory. The Canary Islands have state-of-the-art scientific facilities and a large number of excellent applied research centres, particularly in areas such as bio-technology, robotics and telemetry, food and marine technology, environmental management and renewable energies, plus the universities own research institutes, which have gained broad international projection from some 150 research groups that work in each of these.
Scientific facilities in the Canary Islands MARINE RESEARCH Canary Island Oceanographic Centre Canary Island Institute of Marine Sciences (ICCM, from the Spanish) Applied Algology Centre Spanish Algae Bank (BEA, from the Spanish) ASTROPHYSICS AND TECHNICAL RESEARCH Canary Island Astrophysics Institute (IAC, from the Spanish) Canary Island Institute of Technology (ITC, from the Spanish) Technological Institute of Renewable Energies (ITER, from the Spanish) HEALTH RESEARCH Canary Island Institute of Tropical Diseases (ICET, from the Spanish) Institute of Bio-medical Technologies (ITB, from the Spanish) Canary Island Research and Health Foundation (FUNCIS, from the Spanish) BIOLOGICAL AND AGRICULTURAL RESEARCH Antonio Gonzlez University Institute of Bio-organics Institute of Natural Products and Agro-biology (IPNA, from the Spanish) Canary Island Institute of Agro-food Research (ICIA, from the Spanish) These centres make Canaries a springboard to the cutting edge as they make it possible to carry out high quality technological research with well trained professionals, institutional support and facilities that meet all the requirements with every guarantee of success.
22
23
1.3
Macro-Economic Data
1.3.1 Canary Island GDP

The ideal position of the Canary Islands keeps this region in constant contact with the outside world. It also makes them a key intermediating point between countries, with their finger firmly on the pulse of the present down-turn in the world economy. Over the last ten years, the Canary Island economy has seen its GDP grow faster than the European average and in the last five years, except for 2010, it has outgrown Spanish national GDP. This translates into an economy that is both more dynamic and more sensitive to cycles than that of the rest of Spain, due to its dependence on the main European markets. The Canary Islands on the other hand, have always had a growing market that has actively attracted the working population.
Distribution of GDP at market prices by sectors of activity 2011 (%)

Sources: INE, ISTAC
83%
1%
3%
4%
9%
Agriculture Energy Industry Construction Services
Gross Domestic Product at market prices (%)

Sources: INE, EUROSTAT
5 4 3 2 1 0 -1 -2 -3 -4 -5
0,9
2008
2009
2010
2011
The services sector, and tourism in particular, is the sector that directly and indirectly generates most of the GDP, as this graph clearly shows. The energy sector, on the other hand, has gained weight in recent years, thanks to the fact that the institutions have enhanced their promotion of alternative energies. Industry focuses basically on the energy sector and water, food products, tobacco-related activities and some other light industries (chemicals, paper and cardboard, etc.). Construction, very important in recent years, has been especially hard hit by the economic slow-down. Geographic factors and the climate determine the productive structure of the Canary Island region in the services sector, which is focused above all on the tourist sector as has already been mentioned. In the case of the Canary Islands, unlike other Spanish regions, this has proved to be highly resilient to the economic crisis and possible oscillations in flows of tourists over the course of the year. The high hotel occupancy rate is striking at 13 points above the Spanish average, which, together with the high quality of the tourist amenities and the services available, make the Canary Islands Spains favourite destination and a benchmark in Europe. The average stay exceeds the average stay of tourists in the rest of Spain by more than three days. These indicators confirm the structural nature of tourism in the Islands.
0,9
0,3
-4,2 -3,7 -4,3
-0,3 -0,1
2,1
0,7
1,5
Canaries Spain EU-27 (Euros) 19,806 23,271 26,166
PER CPITA GDP 2011

Source: INE, EUROSTAT
CANARIES SPAIN EUROPE
Tourism 2011
Sources: INE, ISTAC
TOURIST ARRIVALS HOTEL BEDS SELF-CATERING BEDS
13,750,092 237,900 193,300

25
24
1.3
Macro-Economic Data
1.3.2 Population. Socio-economic data.

The rapid growth in the population has been part of the expansion of the Spanish economy from 1994 to 2007, and the Canary Islands have benefited from this expansion in both economic and demographic terms. At 1st of January 2011, The Census in the Canary Islands showed a population of 2,126,769 habitants.
Population density 2011 Population growth in the Canary Islands
Labour costs in Spain in comparison with Europe. Labour cost/hour (2011) Spain has lower costs than the rest of the EU-27
(Source: Eurostat)
Belgium Sweden Denmark France Luxembourg Netherlands Germany Finland Austria UE-27 Spain United Kingdom Cyprus Slovenia Portugal
285.59 hab./km
Source: INE
2003: 1,894,868 hab. 2011: 2,126,769 hab.
One of the characteristics of the population structure in the Canary Islands in terms of age and sex is the lower degree of ageing. At the 1st of January 2011, the ageing rate was 13.41%, compared with the Spanish average of 16.6%, showing that the population structure of the Islands is younger than that of the both the rest of Spain and Europe.
Source: Ministry of Science and Innovation.
10
15
20
25
30
35
40
Labour costs in Canaries in comparison with the rest of Spain. 2011 The Canary Islands have the lowest labour costs in Spain
(Source: INE)
Basque country Navarre Madrid Catalonia Asturias Aragon Balearics Cantabria Andalusia Castilla y Len La Rioja Murcia
CastillaLa Mancha
This distribution of the population, and the wide variety of the resident foreign population, has led to the Canary Islands being chosen as an international benchmark for testing products before they are marketed commercially.
1.3.3 Labour market

The labour market behaves differently in the Canary Islands from the rest of Spain and Europe in terms of specialisation, turnover and salaries.
Galicia
Valencian community
Extremadura The Canaries
10
15
20
25
Minimum Wage 2011 641.40 euros/month

26
Working week 40 hours/week

27
Business Opportunities
2. BUSINESS OPPORTUNITIES
The Canary Islands have highly qualified and trained professionals in many fields of science as the Islands are an excellent laboratory for experimenting and developing Research, Development and Innovation (R+D+i). Furthermore, the Islands have highly specific natural conditions and a rich and varied biodiversity, making them an excellent place to invest in knowledge. Hence, the technological R+D+i sectors represent one of the cornerstones of the Canary Island Governments development policies for economic diversification. Below is a presentation of the sectors with the greatest business potential in the Canary Islands because of both their strategic nature and their capacity for growth here.
2.1 Bio-technology and Health Sciences

Bio-technology and Health Sciences are two important sectors in the area of R+D+i, which is why there are top-flight lines of research in these fields. Thus, the Canary Islands are considered a macro-laboratory with vast reserves of natural resources and one of the richest bio-diversities in the world. In this sense, it is worth pointing out that this small island region of the Canary Archipelago contains 80% of all Spains bio-diversity, with over 14,000 land species, 600 endemic plants and 5,500 marine species recorded. The region has pioneered research on, and the use of, marine bio-technology since the 1990s. The Spanish Algae Bank, founded in 1998, has a catalogue of over 150 strains. The private sector includes the BIOAgramar Foundation, which has a collection of almost 1,500 varieties. Furthermore, there are large numbers of highly qualified professionals working in one of the three Faculties of Marine Sciences in Spain, which is located in the Canary Islands. The Institute of Natural Products and Agro-biology (IPNA-CSIC) was named as one of the best in the world in its field by a committee of experts from the European Science Foundation. This is the first Spanish centre of its kind and it is destined to become a benchmark in Europe. On the other hand, the Canary Islands are leaders in the field of minimally invasive surgery and image-guided medicine in Spain. There are also important initiatives in the field of bio-engineering, rolled out by the Canary Island Agency for Research, Innovation and Information Society (ACIISI, from the Spanish), the Canary Island Research and Health Foundation (FUNCIS, from the Spanish), the Universities of Las Palmas de Gran Canaria and La Laguna, the University Hospital of the Canary Islands (Tenerife), the Doctor Negrin University Hospital and the Materno-Infantil Hospital Complex (Gran Canaria).
30
31
2.2 Renewable Energies and Clean Energies

The natural conditions of the Canary Islands make them unique for developing wind, solar, wave and tide energy. The Canary Islands are on the leading edge in water and clean energy technologies:
G
The Canary Island Oceanic Platform (PLOCAN) is one of the major keynote projects of Spanish science. The objective is that it will act as a base for testing and implementing international projects in the area of marine technologies. Thus, PLOCAN contributes to the development of new and emerging technologies and to bringing them to the market.
World leaders in sea-water desalination technology with an installed capacity that can produce over 600,000 m3 of desalinated water per day. The first desalination plant in Spain was opened on the island of Lanzarote in 1965. The Canary Islands currently top the rankings in the development of this kind of technology. The Canary Islands offer a high return per square metre on investments in sectors such as wind, solar photo-voltaic and wave energy and applied research is well advanced. By way of example:
G
2.3 Information and Communication Technologies (ICTs)

The fragmented nature of the Islands has fostered an intensive development of the communications sector. The need for constant communication with the rest of the world has driven the Canary Island public and private sectors to sign up to ambitious plans and projects to keep the Islands connected to the rest of the world. Hence, the Regional Government has developed a specific programme for rolling out new technologies in the field of ICTs for the period 2007-2013. Companies in this field that want to set up or move their facilities to the Canary Islands are eligible for a wide range of benefits. Facilities and resources available:
G
Solar energy: over 2,500 hours of sunlight a year, with a radiation of 5-6 KWh/m2 a day. Photo-voltaic facilities are powered by over 1,700 hours. Wind energy: constant winds with average velocities of 6 to 8 m/s offer wind farms the equivalent of between 3,000 and 4,000 hours. The Canary Island Energy Plan is set to install 1,025 MW of wind power, increasing the 137 MW currently installed almost ten-fold.
Some islands could become self-sufficient by using energy from underground (geo-thermal energy) as they are volcanic. The Canary Islands have enormous potential in this field, putting them at the head of Europe together with Iceland. The main advantage of this kind of renewable energy is its continuity, whereas the more conventional forms, such as solar and wind power, depend on the cycles of day and night and the wind respectively. El Hierro 100% Sustainable Project: the island of El Hierro is part of an ambitious project that will make it the first island in the world to be supplied by clean energy. This will be done by building a 10MW hydro-wind plant that will come on line in mid 2011. A later phase of the project plans to introduce electric vehicles and all fossil-fuels will practically disappear from the island. El Hierro is being used as a macro-laboratory for experimentation with a view to rolling out new renewable energy formulae based on sustainable development models.
There are several top-flight international research centres that can testify to the drive that the Islands intend to give to R+D+I policies.
32
33
There are three Science-Technology Parks, which intend to harness the synergies generated by the cluster of technology-based companies in one place. Tech-based investment projects implemented in the Islands have the full support of the Regional Government as they are determined to promote economic diversification in the Canaries. The Canary Island Astrophysics Institute (IAC) and the Canary Island Institute of Technology (ITC), both leading-edge research agencies, manage two of the ten most powerful super-computers in Spain. These are the La Palma and the Atlante super-computers, which belong to the Spanish Super Computing Network (RES, from the Spanish) created by the Ministry of Science and Innovation to drive a range of different scientific projects. The Canary Islands have qualified professionals, engineers and specialised vocational training, with wages below the Spanish average.
2.4 Outsourcing
The Canary Islands are highly attractive and offer real opportunities for companies in the field of outsourcing. The main advantages of outsourcing in the Canary Islands is the availability of offices, the time difference between the islands and most of the rest of Mainland Europe, qualified labour with language skills and lower set-up costs. One of the features of the labour market is the large segment of young, highly qualified people. The Canary Islands have one of the highest employment rates of any region in Spain (60.79%) with one of the lowest turnover rates and the best indicators for language skills (22 bilingual schools). The two public universities in Canaries, the different VT specialities focusing on call-centre operations and the large number of research centres, generate highly competitive human resources. Moreover, salaries and turnover of employees are lower than in the rest of Spain and the EU. On top of all this, there are generous tax breaks for R+D+I activities (up to 82% in the Canary Islands and a maximum of only 27% in the rest of Spain). Their geo-strategic position as a springboard to North West Africa, where major projects in the areas of consulting and integration systems are starting to emerge, give the Canary Islands a competitive edge.
Other interesting opportunities in the Canary Islands include:

G
Digital Cable Television (TDT, from the Spanish). Fully operational since April 2010, when analogue television broadcasting was phased out, it has opened up new broadcasting frequencies. Auxiliary Mobile Services. With an above-average penetration rate for mobile telephones and a fiercely competitive market, telephone companies and operators have to differentiate and segment their products. Open Source Software. Spain, and the Canary Islands in particular, offers an unrivalled setting for developing business models based on open source software, with a growing market and strong support from the public sector.
34
2.5 Audio-visual Sector

Canaries are the perfect setting for films. The variety and versatility of the landscapes attract countless audio-visual productions every year. Over 200 local and foreign audio-visual productions are made in the Islands every year (feature films, television programmes, video clips spots, photo-shoots, etc.). The potential of the Canary Islands as a film location is vast and the Canary Island Government provides strong support for the sector. Evidence of this is the declaration signed by the Canary Island Parliament on the 22nd of May 2009, considering the industry a strategic sector for the Canary Islands. The main advantages of the Islands in this area are:
G
The incipient Canary Island audio-visual industry has already reaped success in the cinema due to the existence of experienced, highly professional companies to provide all kinds of support services or to implement large scale projects on their own. On the other hand, the highly developed tourist industry provides benefits that include complete accommodation, transport and catering services.
The Canary Islands are a niche in providing value added to cartoon productions in the phase of editing and polishing the raw work done in Asia. This represents a business opportunity for cartoon productions in both pre and postproduction phases.
G
Unbeatable tax breaks: the deduction on Companies Tax for Canary Island productions amounts to 38%. Furthermore, there is a regional funding plan that puts out a call for projects every year (between May and June), with a budget of over one million euros. Since 2007, funds from the Canary Island Investment Reserve (RIC, from the Spanish) can be invested in audio-visual productions made in Canaries that obtain the obra canaria (Canary Island work) label granted by the Canary Island Government.
Movies filmed in the Canary Islands include One millions years B.C., by Don Cheffey, starring Raquel Welch (1966), Los abrazos rotos, by Pedro Almodvar, starring Penelope Cruz (2008), or the more recent Clash of the Titans, by Louis Leterrier, starring Ralph Fiennes and Liam Neeson. As for local talent, the Islands can boast not only of being the birth place of actors of the calibre of Javier Bardem, but also of graphic animators such as Carlos Baena, who brought life to the leading players of Pixars recent hits Ratatouille and Wall-E, or directors such as Juan Carlos Fresnadillo, director of Intacto and 28 weeks later, or Mateo Gil (Alejandro Amenabars co-screenwriter) who is currently directing Blackthorn with Sam Shepard and Eduardo Noriega.
36
37
2.6 Optics, Astrophysics and Space Technologies

The Canary Islands are the headquarters of the Canary Island Astrophysics Institute (IAC), a highly international Spanish research centre that is also responsible for operating the Teide Observatories (Izaa, Tenerife) and the Roque de los Muchachos Observatory (Garafia, La Palma). The extraordinary astronomic quality of the skies up in the mountains of the Canary Islands, protected by law, and a series of international agreements, have enabled these observatories to attract telescopes and other instruments from over 70 scientific institutions from 19 countries. Much of the technology used in their research is developed by the IAC itself, Thanks to their experience and the knowledge accumulated from pioneering space projects in Spain, the IAC has attained a leading position in the most important areas of know-how and technology for developing advanced instrumentation. This experience has been enhanced recently with the launch of what is currently the largest and most advanced telescope for optical infrared astrophysics: the Gran Telescopio CANARIAS, or Great Canary Island Telescope (GTC). This project has also advanced skill building in these technologies among Spanish companies. The installation of this telescope in the Roque de los Muchachos Observatory keeps the Canary Islands on the leading edge internationally.
Apart from participating in the GTC, the IAC also plays a highly active role in the leading international projects and initiatives in the field of astrophysics. This is the case of the European Optical Infrared Co-ordination Network for Astronomy - OPTICON; the project to build the European Extremely Large Telescope (E-ELT) and two of its possible future instruments; the instrumentation for the HERSCHEL, PLANCK and IMAX VLTs; and the conceptual design study for the future European Solar Telescope (EST); among others. The IAC is currently a powerful technological research and development centre, among the best of its kind in the world, capable of championing the scientific, technological and cultural resources of the Canary Island skies to the benefit of all. It has proved a useful instrument, not just for facilitating the use of the observatories by the national and international scientific community, but also for optimising Spains scientific and technical development. As for space technology, the National Aerospace Institute (INTA)s Canary Island Space Centre (CEC, from the Spanish) is located in the south of the island of Gran Canaria. According to experts in these matters, it is ideally placed to provide support for launching satellites, the remote control of satellites, acquiring Earth observation satellite data, detecting and locating emergency alerts picked up by the Cospas-Sarsat satellites for saving human lives, as well as for communications with geo-stationary satellites. The Space Centre has provided support for many international space missions.
38
39
2.7 Logistics and Transport

Locating in the Canary Islands means being closer to Africa and America without leaving Europe. The Archipelago is 100 kilometres from the west coast of Africa and just over 1,000 kilometres from Mainland Spain. This makes it a key business platform that facilitates trade and the transfer of services and technology between continents. Business success is helped by the modern infrastructure of the Canary Islands. There are 8 airports, 6 of which are international. The two busiest of these (Gran Canaria and Tenerife North) handled over 35 million passengers each and almost 50,000 tonnes of cargo in 2011. There are 1,500 weekly connections to destinations in Europe and many direct flights to Africa, Latin America and North America. Madrid is just a two-and-a-half hour flight away; London, Frankfurt and Rome, four hours and Caracas, eight hours away. Concerning sea transport, the Islands are connected with almost 500 ports throughout the world, with over thirty shipping lines, including the main logistics operators. The Canary Islands are known as the largest supply, ship repair and bunkering station in the Mid Atlantic and one of the top three for hydro-carbon logistics distribution. Some references:
G
UNICEF and the International Red Cross have chosen the Canary Islands to set up their logistics operations base for emergency humanitarian relief to Africa; one of only four facilities of this kind in the world. The Islands Port Authorities form part of important international institutions in the industry, such as, for example, the International Cargo Handling Co-ordination Association (ICHCA), which intends to foster co-operation among the main ports of the west coast of Africa and the Canary Islands through the Canary Islands/Africa Regional Chapter. The Canary Islands are seeking to become one of the largest bunkering centres in Europe for low-sulphur fuels in order to seize the opportunity represented by the SECA Area coming into effect in the Mediterranean in 2011. In the Spanish national rankings, the Canarian ports are:
G
Number three in container handling. Number four in passenger traffic.
41
2.8 Advanced Tourist Services

The Canary Islands, a top flight holiday destination: Around 12.5 million tourists choose the Canary Islands as their holiday destination every year. Innovative projects in this field, such as management software and ICT projects, renewing the accommodation stock, alternative leisure products and other advanced services, offer excellent opportunities.
Market niches for products

G
A range of services to reinforce the product clubs that the Canary Islands are promoting abroad: Wellness Delight, Family Welcome, Water Sports Experience and Volcanic Experience. Scientific tourism: The Canary Islands has great capacity for hosting scientific conferences of all kinds, but especially in the fields of astrophysics and marine sciences. It has two observatories for the former, which have hosted over 600 astronomers over the last 30 years, while for the latter, there are many facilities devoted to marine research so it is fast becoming the most important dedicated oceanic platform for all sea-related research. Adventure sports: surfing, windsurfing, kite surfing, diving, rambling, climbing, sky diving, bungy jumping, caving, etc. Travel mentors and holistic holidays: There is a range of health and alternative therapy centres attracting those looking for an oasis of peace in the Canary Islands.
Tourism Data 2011

(Source: Istac e INE)
Average annual temperature Foreign tourist arrivals Domestic tourist arrivals Hotel beds Self-catering beds Occupancy rate
Min. 15C - Max. 24C 10,187,690 3,562,402 237,900 193,300 64,16%
Market niches for tourism services

G
The Canary Island Tourism Cluster was founded in 2009 to bring together all the stakeholders in the industry: companies, institutions and other players who make up this community. The Cluster has helped to promote and reinforce many regional groups, products, etc. The Canary Islands offer key opportunities both to add new tourism products to broaden the main sun, sea and sand product and in advanced tourism services with the development of technological applications. Hence, the Canary Island Government has used the Canary Island Agency for Research, Innovation and Knowledge Society to roll out its programme of innovative actions in tourism aimed at promoting R+D+I in the industry.
ICT-based technological services: development of management and marketing tools for tourism services and ICT-based services (Wi-Fi, Wi-Max, etc.) for tourist areas.
G
Other technological services: development of energy saving or energy efficiency services, domotic systems, sustainable construction materials, efficient lighting, etc. which can be applied to tourist resorts and businesses. Other services: high-value services such as design, interior design, alternative transport, gastronomic services, etc.
42
Incentives and financing
3.1
General Fiscal Regime
3. INCENTIVES AND FINANCING
The Spanish fiscal system is modern and competitive. The fiscal pressure in Spain (measured as the percentage of taxes and national insurance in the GDP) is approximately four points below that of the countries around it as it can be seen in the graphic below. It has to be outlined that the Canary Islands are below the Spanish average due to its specific Fiscal and Economic Regimen, which includes exemptions and reductions up to 4% of the corporate Tax if its approved in the Canary Islands Special Zone (ZEC).
The main directly applicable taxes in Spain are:

G
Corporate Tax (IS) Individual Income Tax (IRPF) Tax on Incomes of Non-Residents (IRNR)
Fiscal pressure in Europe, 2009 (Taxes / Percentage of GDP)

Source: Eurostat 2011
Sweden France Italy Germany
Corporate and Personal Income Tax
In Spain the tax system differences when the incomes are gained by an individual, personal income tax (IRPF), or a company or legal entity, corporate tax (IS). Another difference is between resident and non-resident, when it will apply the Non-Resident Income Tax. It is considered as fiscal resident in Spain, if stays more than 183 days in the natural year within the country, or when the base or core of its economical activities are in Spain.
For more detailed information look at: www.investinspain.org

Euro-zone UE-27 Netherlands United Kingdom Czech Republic Portugal Greece Spain Poland Ireland
10
20
30
40
50
60
46
47
3.2
Economic and Fiscal Regime of the Canary Islands (REF): Investment incentives
Historical Background
Past, present and future of the REF: a special and stable regime
Are the fiscal incentives of the current REF compatible with community regulations?
The question of the compatibility of the Canarian fiscal regime with the community regulations arises because certain help, whether direct or indirect, granted by the States or with state funds, may falsify or threaten free competition, favouring certain companies or productions. Any uncertainty in this respect has been dispelled by the Decision of the European Commission of 16th December 1997, which confirms that the fiscal incentives set out in the REF are forms of help which can be considered to be compatible with the common market in accordance with the Treaty of the European Union and the EEC Agreement. The Decision considers that the fiscal incentives set out in the REF constitute indirect help to investment and the exploitation of the companies in the Canaries, and justifies their existence provided that it is subject to limits set down by the community regulations themselves and the conditions set down in the Decision. The Royal Decree Act 13/1996 of 26th January, Act 13/1996 of 30th December, Royal Decree Act 7/1998 of 19th June and Royal Decree Act 2/2000 of 6th July (Approval of the Canary Islands Special Zone), Royal Decree Act 12/2006, of 29th December, by means of which Act 19/1994, of 6th July, in Modification of the Economic and Fiscal Regime of the Canary Islands is modified, and Royal Decree Act 2/2000, of 23rd June, have introduced all the appropriate modifications which adapt the fiscal incentives of the REF to the provisions set down in the community Decision, achieving the full adaptation to the community regulations.
From what time is it possible to speak of a Fiscal and Economic Regime in the Canary Islands?
From the 15th Century to the present time, the Canary Islands have enjoyed a fiscal and commercial peculiarity caused by their situation as islands and their geographical distance. These historical rights have been manifested in the form of an almost free-trade regime in the framework of a more or less pronounced form of protectionism according to the period. In the mid-19th Century, this peculiarity became a system of free ports which lasted until the Spanish civil war. During the following years, the system has evolved with the introduction of interventionist elements which culminated in Act 30/1972 on the Fiscal and Economic Regime of the Canary Islands (REF) in which it was intended to establish a set of measures with the final objective setting the basis to promote the economic and social development of the Islands.
How has the REF been adapted to the accession of Spain to the European Union? What legislation governs the current REF?
The need to make this fiscal peculiarity in the Canary Islands compatible with the community regulations in the matter of competition and the internal market and the changes that the world economic reality has undergone in these last two decades have led to the Canarian fiscal regime, by maintaining its objective of developing the territory, adapting to the new demands of the environment.
Is the continuity of the Canarian fiscal peculiarity guaranteed?
For this reason, Act 19/1994 in Modification of the Economic and Fiscal Regime of the Canary Islands, in which the fiscal measures with direct incidence on the REF are set down, as well as the regulation of the so-called Canary Islands Especial Zone (ZEC), an instrument of promotion of the economic and social development of the Islands was approved.
Definitively, the recognition of the outlying nature of the Canary Islands and the need to compensate for the costs involved in being islands and the territorial distance have been successively expressed in the Treaty of Accession of Spain to the European Community (Protocol II), in the POSEICAN programme, in the REGIS II community initiative, in article 299 of the Treaty of Amsterdam, article 349 in the Treaty of Lisboa, and in all the Community Decisions which have been approved since then, which guarantees the stability of their fiscal peculiarity, although it is subject to the conditions and controls of the European Commission, the institution responsible for ensuring respect for community law.
49
48
3.2
Economic and Fiscal Regime of the Canary Islands (REF)
What fiscal advantages do the Canary islands offer?
The opportunity to pay less in Corporate Tax
Fixed tax rate of 4% for ZEC Companies A reduction of up to 90% of the net undistributed profits from the Tax Base (RIC) Deductions for investments in strategic sectors that are more advantageous than those of the rest of Spanish territory Fiscal bonus of 50% of the profits obtained from the sale of tangible goods produced in the Canary Islands
1. It must be a newly-created entity with its registered address and place of effective management in the geographical ambit of the ZEC. 2. At least one member of the administration must reside in the Canary Islands. 3. It must make a minimum investment of 100,000 euros (in Gran Canaria and Tenerife) or 50,000 euros (in the rest of the islands) in fixed assets related with the activity within the first two years, following registration in the ROEZEC (Official Registry of ZEC Entities). 4. It is necessary to create, at least, five jobs (in Gran Canaria and Tenerife) or three (on the other islands) during the first six months following registration in the ROEZEC and this average must be maintained during the time that the benefits are enjoyed. 5. It is necessary to conduct activities that are permitted in the ZEC. 6. It is necessary to present a descriptive Report of the economic activities to be carried on, which justifies their solvency, viability, competitiveness and its contribution to the economic and social development of the Canary Islands. These entities will have the following advantages:
G
Multiple exemptions in INDIRECT TAXATION Installation in FREE TRADE AREAS with special economic advantages
For the incorporation of the company For capital increase For the acquisition of capital goods Economic advantages from the practice of export and import and from the active perfecting of goods
ZEC entities are subject to Corporate Tax in force in Spain but at a reduced rate of 4% applicable (compared to 25% which is the European average). They are exempt from withholding of dividends from ZEC subsidiaries to their parent companies in other country in the European Union thanks to the Parent-Subsidiary directive and to other countries with which Spain has signed an agreement so as to avoid double taxation (over fifty countries). Exemption from Capital transfer Tax and Stamp Duty. Exemption from the Canarian Indirect General Tax (IGIC) (equivalent to IVA/VAT) for the provision of goods and services between ZEC entities, and on imports.
The mentioned fiscal incentives will be explained as stated below:

G
3.2.1 The Canary Islands Special Zone (ZEC)

G
The Canary Islands Special Zone (ZEC) is an economic instrument created with the purpose of promoting the economic and social development of the Islands and the diversification of their productive structure. The actual ZEC regimen period will expire on 31st December 2019, and can be extended with the prior authorisation of the European Commission. Companies may register up to 31st December 2013.
50
The ZEC covers all the territory of the Canary Islands with certain peculiarities:
G
The requirements which must be fulfilled by the companies to gain access to the ZEC are the following:
In the case of companies whose object is the provision of services, they may be established anywhere in the territory.
51
3.2

G
When it is a matter of companies whose object is the prodution,transformation, manipulation and/or marketing of goods, their area of establishment will be restricted to the limited areas designated to this purpose. What are the fiscal advantages of the RIC?
wer to make contracts, on behalf of and on account of the non-resident person or body is understood.
Application and calculation of the RIC. The RIC makes it possible to reduce the taxable base, up to 90% of the Undistributed Profits (BND), in Corporation Tax for the amount that the establishments situated in the Canary Islands devote from their profits to the contribution to the Reserve for Investments in the Canary Islands.
3.2.2 The Reserve for Investments in the Canary Islands (RIC)

What is the Reserve for Investments in the Canary Islands? Definition of the Reserve for Investments in the Canary Islands. The Reserve for Investments in the Canary Islands, hereinafter RIC, is instrumented with the objective of stimulating investment activity charged against shareholders equity, that is to say, self-financing of the investments of the companies which conduct their activity in the Canary Islands. Ambit of application of the Reserve for Investments in the Canary Islands. Contribution to the RIC represents fiscal advantages of which, in relation to the activity carried out in establishments located in the Canary Islands, the following may make use:
G
What is understood as Undistributed Profits in the calculation of the limit of the fiscal advantage?
Undistributed profits are understood to mean those devoted to increasing the reserves of the company. The calculation of this variable is the result of deducting from the Gross Accounting Profit for the fiscal year in which the RIC has been contributed to, the Legal Reserve (RL) and the dividends to be distributed (D). The RIC can be likewise applied in individual Income Tax. In this case, it would involve a deduction in the total tax liability for IRPF for the net profits of operation devoted to the RIC. The calculation is effected by applying the average rate of tax to the contribution to the RIC1. PBT= Profit Before Tax Accounting Profit Distribution of Profits
Who can make use of the RIC?
All companies and other legal entities subject to Corporation Tax. Those individuals who are subject to Income Tax, both in their net profits from business activities as professionals and it is estimated by the method of direct estimation.
Nevertheless, Royal Decree Act 7/1998 sets down the inapplicability of all fiscal incentives to the productive activities which are within the sensitive sectors (naval construction, synthetic fibres, the automobile industry, iron and steel and the coal industry). What is understood by a permanent establishment in the Canary Islands?
52
Undistributed profits Base for the RIC calculation Corporation Tax
Legal Reserve Voluntary Reserve Reserve for investments in the Canary Islands
The indispensable condition in order to take advantage of the RIC, is that the company, independently of where it is located, must have a permanent establishment in the Canary Islands. By permanent establishment, all the installations or places of work, in which, in a continual and habitual manner, all or part of the activity is undertaken, with po-
In this final case, the deduction may not be greater than 80% of the total tax liability which corresponds proportionally to the amount of the net profits of operation from the establishments of the company situated in the Canary Islands.
53
3.2
What requirements are set in order to be able to enjoy the fiscal benefit deriving from the RIC?

The requirements of the RIC. The necessary requirements for the effective practice of the fiscal benefit, both for companies and for the individuals are the following: 1. Materialising the reserve. In general, the quantities which are devoted to the RIC have to be materialised in the purchase of fixed assets, new or used, within any of the following investments: A. Initial investment B. Creation of jobs C. Acquisition of corporate assets that do not form part of the initial investment. D. Subscription of shares or stockholdings in companies by incorporation or increase of capital and canarian public debt. Type of investment Acquisition of New or Used Fixed Assets
Conditions that must be fulfilled in order to obtain the fiscal benefit
Conditions demanded for new and used Fixed Assets

They must be located or received in the Canary Islands They must be used in the Canary Islands They must be necessary for the conduct of the business activity or they must contribute to the improvement and protection of the environment in the Canary Islands. Investments made by tenants in buildings and those devoted to the rehabilitation of a fixed asset
Additional conditions for Used Fixed Assets

They may not have benefited previously from the RIC. They must represent a technological improvement for the company Minimum duration of the lease must be five years
What is the period of time to materialise the RIC?
2. Maximum period to materialise the reserve. The fiscal use of the contribution to the RIC must be within the maximum period of three years counted from the date of payment of the tax, corresponding to the financial year in which it has been contributed to. A. Initial investment
Costs of establishment /incorporation Rights of Transfer, Patents, Brands Computer Applications Audiovisual productions
Is there any obligation on the part of the company to maintain the goods involved in the RIC?
3. Minimum period of time of existence of the materialization. The minimum period that the goods in which the reserve was materialised must remain in operation in the company depends on the kind of investment chosen:
Buildings, Premises and Land (included in the legally accepted cases) Technical installations, Machinery and Tools Other Installations, Tools and Furniture Computer Equipment
Investment in Fixed Assets: at least five years or during the useful lifetime of the elements if this is less. For these purposes, the duration corresponding to the maximum period of amortization assigned in the officially approved amortization tables. Other Investments: 5 years
Elements of Transport Guarantees and Deposits (registration of supplies) Other investments In the case of used goods, this is only applicable for small-sized enterprises (ERD), where it is demanded that the goods acquired have not enjoyed this incentive previously.
54
55
3.2
B. Creation of employement posts
Related with A and which are to be produced within the space of six months from the coming into operation of the investment. It will be determined by the average increase in the staff of the company arising in the said period with regard to the average staff for the previous twelve months. It must be maintained for five years (ERD 3 years) The RIC is materialised for the first two years of the average costs of gross salaries and social contributions which correspond to the said increase. It will not be possible to reduce the existing average number of staff existing in the financial year previous to the subscription during the four following years.
D. Subscription of shares or stockholdings in companies through incorporation or increase of capital and canarian public debt.
5. A reciprocal system of information is established between both companies 6. In the subscription of shares or stockholdings in ZEC entities : The amount of the issue or capital increase must be greater than 750,000 At least 10% of the issue or increase will not be suitable for a RIC Materialisation The subscribing body may not transfer or cede the use of the affected assets existing in the previous financial year nor in the following four, except for certain exceptions 7. In shares or stockholdings of companies and venture capital funds and in investment funds, provided that: These companies invest a quantity equivalent in shares or stockholdings representative of the capital of the companies referred to in the foregoing points of this group D. Obligations of reciprocal communication are set down The investments made by the company in which there is a holding by the venture capital body or by the investment fund will be incompatible with any other incentive except article 25 Capital Transfer Tax and Stamp Duty. A) Subscriptions of canarian public debt and cases with similar aims. 1. Securities of the Public Debt of the Canarian Autonomous Community, from the Local Corporations of the Canary Islands, from its public companies or its autonomous organisations with the limit of 50% of the amount paid each financial year. 2. Securities issued by public organisations for the construction or exploitation of infrastructures or equipment of public interest. Limit 50% 3. Securities issued by entities that come from construction or exploitation of infrastructures or equipment of public interest for the Canarian Public Administrations once the administrative concession is obtained. Limit 50%.
57
C. Acquisition of capital assets
In acquisition of elements of material or immaterial fixed assets which are not part of the initial investment, which contribute to the improvement and protection of the environment and to R+D costs (e.g.: projects with universities , public research organisations or centres of innovation and technology) In vehicles for passenger transport by sea or road: public services of general interest. In materialization of land: leases of apartments protected by the promoter, conduct of industrial activities and commercial areas in declining tourist zones.
D. Subscription of shares or stockholdings in companies through incorporation or increase of capital and canarian public debt.
A) Indirect materialisation: subscription of shares or participation in societies. Only companies that carry on their activity in the Islands and fulfil the following requirements: 1. Indirect investments in elements of groups A and B 2. Period of materialization of the company is the same as that which contributed to the RIC 3. The RIC will consider not the capital subscribed but that capital paid up to be a RIC materialization (including the issue premium) 4. The investments made by the company in which stock is held will not give rise to the application of any other fiscal incentive, except Article 25 Capital Transfer Tax and Stamp Duty
56
3.2
Can the RIC be materialised in a used asset for which other fiscal benefits have been received? How are the technological improvements to be evaluated?

Nevertheless, it is necessary to make the following qualifications about the attached table: a) In the case of used fixed assets, they may not have benefited previously from the regime set down in this article, and it must involve a technological improvement for the company
The freedom of amortization for investments which generate employment (R.D. Act 7/1994 of 20th June). Exemptions in Capital Transfer Tax and Stamp Duty for asset purchases of goods The Special Regime of Deduction for investments in the Canary Islands, although in the physical sense, that is to say, the taxpayer may not simultaneously make use of both fiscal benefits on the same capital goods. This limitation disappears if the fractioning of the goods is possible.
b) Technological improvement is understood to mean those investments which have one of the two following effects:
G
It reduces the cost of unit production of the goods or service It improves the quality of the goods or service What happens if the criteria of materialization of the RIC are not obeyed? Penalization for breach of requirements. The taxpayer will be penalised for infringing the requirements demanded by the regulations for the use of the fiscal benefit. The penalization will consist of integrating in the taxable base for the financial year in which the said breach occurs, the strict amount of the sum in breach. On the amount of the breached derived sum, the corresponding delayed interest will be paid. Furthermore, if it constitutes a tax breach, the corresponding tax sanctions will be imposed.
c) Regarding the option of subscribing shares, the current regulations do not demand that the company in which there is a holding should have its registered address in the Canary Islands. Likewise, it only obliges that it carries on its activity on Canarian territory. This relaxation of the demands offers new possibilities for making use of the RIC and a range of formulas of funding of investments in the Canary Islands.
Is there any specific rule to account for the RIC?
4. Accounting of the reserve.

The RIC must feature on the balance sheet with an absolute separation and an appropriate title. It is not possible to make use of the account where is deposited the RIC up to the end of the obligatory period of maintenance of the investment.
3.2.3 Deduction for investments in the Canary Islands

What similarity is there with the deduction of the Company Tax in Spanish territory? The special regime of Deduction for investments in the Canary Islands. The Deduction for Investments in the Canary Islands is a fiscal incentive, equivalent in its operation with that on Spanish territory, but with considerable advantages with respect to the intensity of the fiscal benefit. This special regime of deduction for investments in the Canary Islands is applicable to the following persons and entities:
G
Must the materialization of the RIC be carried out by means of a cash payment? Are the fiscal benefits derived from the RIC compatible with other fiscal 58 incentives?
5. Form of payment of the materialization of the RIC. The taxpayer may use any form of payment it wishes to materialise the RIC: in cash, outside financing or leasing, provided that in this final case there is no doubt about the exercise of the purchase option.
Compatibility of the RIC with other fiscal instruments. The RIC is compatible with the fiscal benefits deriving from specific incentives of the Economic and Fiscal Regime of the Canary Islands and those of the General Regime of Corporation Tax:
G
Tax Allowance for Production of Tangible Goods
Who may take advantage of the deductions for investments in the Canary Islands?
All companies and other legal entities subject to Corporation Tax for the investments they make which remain in the Canary Islands, provided that:
59
3.2

They have their registered address in the Canary Islands If they do not, they must at least have a permanent establishment in the Islands.
G
The individuals that carry on business and professional activities in the Canary Islands, provided that they fulfil the conditions imposed by the regulations of Income Tax for the application of the incentives to the investment set down in Corporation Tax.
What are the rates of deduction applicable to investments in the Canary Islands?
1. The rates applicable on the investments made will be greater by 80% than those of the general regime, with a minimum differential of twenty percentage points. 2. With regard to the limit applicable, it will be 80 per cent greater than that set down in the general regime, with a minimum differential of 35 percentage points. 3. The deduction for investment in the Canary Islands may be made likewise in elements of used fixed assets, provided that: they have not previously enjoyed the deduction for investments of the general regime and that they are a technological improvement for the company. There is an added advantage: the deduction for investments in the Canary Islands can by used by those elements of used fixed assets which would previously have used the RIC. The deductions for investments under Act 20/1991, of 7th June, in modification of the fiscal aspects of the Economic and Fiscal Regime of the Canaries, coming from different modalities or taxation periods of chapter IV of title VI of the Act of the Company Tax will be applied with the particularities set down in Act 20/1991, respecting the limit of 70 per cent on the total tax liability, reduced by the deductions so as to prevent double taxation and the allowances (key [582]). Notwithstanding the foregoing, the said joint limit of 70 per cent will be raised to 90 per cent when the amount of the deduction for activities of scientific research and technological innovation set down in article 35 of the Company Tax Act, together with the amount of the deduction to foment technologies of information and communication from Article 36 of the above-mentioned Act, and which correspond to costs and investments made in the same taxation period, exceeds 10 per cent of the total tax liability, reduced by the deductions to avoid internal and international double taxation and the allowances. On the other hand, in accordance with the provisions of the fourth transitory provision of Act 19/1994, in the Canary Islands, the deduction for investments in elements of the material fixed assets continues to be applied, with the deduction corresponding to 2009 having an independent limit of 50 per cent of the above-mentioned quota (key [582]). On the following page, the types of deduction and the limits applicable in this regime are summarised.
How are the deductions calculated for investments in the Canary Islands?
Application of the special regime of Deductions for Investments in the Canary Islands. The deduction for investments in the Canary Islands constitutes a fiscal stimulation measure which operates, just as occurs in the general regime set down by the Company Tax Act of 1995, as one more reduction of the total tax liability after the application of the deductions for double taxation and possible allowances. In a generic manner, the amount of the deduction is calculated in each case by applying the percentage of deduction stipulated legally for each modality of investment over the total amount of the investments made.
Why does this incentive make investments in the Canary Islands more attractive than those on the rest of the Mainland Spain?
The Canarian regime presents considerable advantage compared with the general:
G
A greater intensity of the fiscal benefit, thanks to a higher percentage of deduction applicable and a wider limit on the total amount of the sum that is finally deductible. The Canarian special regime has a character of permanence, which the general regime lost with the approval of Act 43/1995, the Companies Act, given that since then it is the General Budget Act of the State that determines its existence every year.
The greater intensity of the fiscal benefit of the special Canarian regime of deduction for investments is expressed in the following characteristics which differentiate it from the general regime:
60
61
3.2

MODALITIES OF DEDUCTION DEDUCTION
LIMIT (2)
Investments in elements of tangible fixed assets, excluding land, affected by the development of the economic exploitation of the entity (1) Investments in goods from the tangible assets devoted to the protection of the environment Creation of employment for handicapped workers Gtos. Research and development and technological innovation Research and development Technological Innovation
25 per cent
50 per cent
24/25 per cent
6,000 euros a person/ year of increase 45/75, 6/28 per cent + 37 per cent (additional) 28 per cent 26 per cent 24 per cent 70/90 per cent 26 per cent
(1) In accordance with the provisions of the fourth transitory provision of Act 19/1994, in the Canary Islands, the deduction for investments in elements of the tangible fixed assets continues to be applied.The used fixed assets which give a right to a deduction must belong to one of the following categories:
G
Technological investments of information and communication Deductions in measures of support for the transport sector Creation of branches or permanent establishments abroad, as well as the purchase of stockholdings of foreign companies or the constitution of subsidiaries directly related with the export activity of goods or services or the contracting of tourist services in Spain, provided that the stockholding is, at least, of 25 per cent of the corporate capital of the subordinate Costs of advertising and propaganda of pluri-annual projection for product launches, opening and prospecting of markets abroad and attending fairs, exhibitions and other analogous manifestations, including in this case those held in Spain with an international character.l Goods of cultural interest Investments in cinema productions Investments in book publishing Costs of vocational training Business contributions to employment-related pension plans, MPS, to plans of National Insurance or for contributions to protected properties
62
Machinery, installations and tools. Equipment for information processing.
Elements of internal and external transport, excluding vehicles that are susceptible to personal use by persons linked directly or indirectly to the company. Likewise, the acquisition of the of the used fixed asset element must involve a clear technological improvement for the company, and this circumstance must be accredited, in the case of verification or research into the tax situation of the taxpayer, by means of the justification that the element which is the object of the deduction is going to produce or has produced any of the following effects:
26 per cent
G Reduction of the unit cost of production of the goods or service. G Improvement of the quality of the goods or service.
30 per cent Producer of the film Financial co-producer(3) 38 per cent 25 per cent 24 per cent 22/24 per cent 24 per cent 24 per cent
Finally, the taxpayer must keep at the disposal of the Tax Administration the certification issued by the transferor in which it is recorded that the element that is the object of the transfer has not previously enjoyed the deduction for investments or the regime of the Precautionary Fund for Investments. (2) The maximum limit of deduction on the total tax liability reduced by the deductions to avoid double taxation and the allowances is independent of that which is allowed for the investments under the general regime of the Tax. (3) The financial co-producer may only make use of this deduction when he participates in a Spanish production of a full-length film and will have as a limit, apart from the joint limit of 70 per cent (or 90 per cent, if applicable), 5 per cent of the income for the period deriving from the said investments.
Investments and costs in kindergartens for workers children
63
3.2
Can a company benefit simultaneously from other fiscal advantages?

Compatibilities of the especial regime of deduction for investments in the Canary Islands with other fiscal incentives. The entities which are in a position to benefit from the special regime of deduction for investments in the Canary Islands may simultaneously enjoy the following fiscal advantages:
G
They must have a permanent establishment or branch in the Canary Islands, independently of the place where they are domiciled. They must devote themselves directly to the production of tangible goods in the Islands which are those proper to agricultural activities, livestock, industrial and fishing, provided that in this case, the deep sea fishing: Is carried out with Spanish ships, and The fish are disembarked, handled or transformed in the Canary Islands.
Exemption for purchase of goods of the Capital Transfer Tax and Stamp Duty Deduction for Investments made in the rest of Spain (Investments under the General Regime) Allowance for Production of Tangible Goods Reserve for Investments in the Canary Islands, although in the physical sense as described above.
The deduction for investments in the Canary Islands may be applied to the purchase of used fixed assets provided that: 1. they have not previously enjoyed the deduction elsewhere on Spanish territory 2. they amount to a clear technological improvement for the company What fiscal benefit does the allowance for production give?
Nevertheless, the R.D. Act 7/1998, determines that the productive activities included in the sectors considered as sensitive by the European Union, naval construction, synthetic fibres, the automobile industry, iron and steel and the coal industry, cannot take advantage of the fiscal benefits of the allowance for production.
Application of the Allowance for Production of Tangible goods. What fiscal benefit does the allowance for production give? This incentive is an allowance of 50% of the total tax liability which proportionally corresponds to the profits deriving from the sale of tangible goods produced in the Canary Islands with the above-mentioned requirement. Allowance = 50% x 30% x Profits from the Sale of Tangible goods produced in the Canary Islands. The same allowance is applicable to the Income Tax taxpayers who carry on the same activities and with the same requirements demanded from the taxpayers of company tax. This allowance is applied to the total tax liability, which corresponds proportionally to the profits deriving from the above-mentioned productive activities. Allowance = 50% x Average Rate x Profits from the Sale of Tangible goods produced in the Canary Islands
3.2.4 Deduction for Production of Tangible Goods in the Canary Islands

What is the deduction for production of tangible goods in the Canary Islands? Who can benefit from the allowance for the production of tangible goods?
64
Definition of the deduction for production of tangible goods in the Canary Islands. This is a fiscal incentive which reduces the total tax liability of the Company Tax, or Income Tax (IRPF) if applicable. The objective of this fiscal instrument is to foment productive activities in the Islands. Can a company benefit at the same time from the RIC and from the rest of the fiscal advantages of the REF?
Ambit of application of the allowance for production of tangible goods in the Canary Islands. All taxpayers of Corporation Tax and all taxpayers of Income Tax who determine their profits by the regime of direct evaluation can benefit from the allowance, provided that they satisfy the following conditions:
Compatibility of the Allowance for Production with other fiscal instruments. This instrument is compatible with other fiscal incentives. In particular, any company that benefits from the Allowance for Production of
65
3.2
Example of application and calculation of the Allowance

Profits before tax X Rate of company tax = Total tax liability - Allowance of (50%) TOTAL NET TAX PAYABLE Net profit after tax 100 30% 30 (15) 15 85
Tangible goods can simultaneously obtain the corresponding fiscal advantages deriving from contributions to the Reserve for Investments in the Canary Islands, the exemptions from the Property Transfer Tax and Stamp Duty set down in the REF and the exemption for reinvestment for SMEs.
3.2.5
Fiscal advantages of the Canary Islands General Indirect Tax.

1. Canary Islands General Indirect Tax
Definition of the General Indirect Canarian Tax (IGIC) Canary Islands General Indirect Tax, hereinafter IGIC, is an indirect tax, of which the objective is to charge final consumption, which replaces the European IVA/VAT in taxation of consumption. Its regulation and mechanics of application offers a great similarity with IVA, without prejudice to the specificities and peculiarities of the regime of the IGIC, which respect the maintenance of the exemption of consumption explicitly regulated in the Statute of Autonomy of the Canary Islands.
What is IGIC?
Where is IGIC applicable?
The specific territorial scope of the IGIC is the territory of the Canary Islands, territorial water up to a limit of twelve nautical miles and the corresponding airspace.
The advantage of IGIC compared with IVA. What advantages does it have with regard to IVA? The regulation of IGIC offers the following additional advantages in comparison with Value Added Tax:
G
Lower rate of taxation. The general rate of IGIC is 7%. Application of a zero rate on certain products and services.
66
67
3.2

G
Exemption for acquisition of capital goods, provided that a company with registered address in the Canary Islands is set up, or at least with a permanent establishment in the Islands. Exemption for delivery of goods and provision of services of the Canary Islands Special Zone (ZEC). These operations carried out by the ZEC entities with other ZEC entities are exempt from the tax, as well as imports of goods made by these entities, generating, however, the right to the deduction and return of the contributions paid.
Is there any deadline in order to enjoy this exemption?
Nevertheless, in order to be able to enjoy this exemption a period of no more than three years must have passed since the fulfilment of the conditions of fact indicated above. Likewise, a minimum period of five years is set before the transfer of the fiscal domicile or permanent establishment of the acquiring entity can be transferred outside Canarian territory. In case of breach of the said period, the company must pay the tax which would have been payable and its interest for late payment.
3.2.6
2. Exemption from capital transfer tax and stamp duty (ITP and AJD)
What do the fiscal incentives for investment in the Canary Islands consist of? Who can make use of it? The incentives to investment set out in article 25 of Act 19/1994, consist of fiscal advantages in indirect taxation. To be precise, the exemption is regulated, under certain conditions, in the purchases of capital goods ITP and AJD. What is the purpose of the Special Register of Ships and Shipping Companies?
Special Register of Ships and Shipping Companies.

The Special Register of Ships and Shipping Companies (REB) The purpose of this register is to improve the competitiveness of the shipping companies and that of the Canarian ports by a series of measures consisting of different exemptions and fiscal allowances that can be taken advantage of by both registered Companies and ships.
Ambit of application of the exemption. Companies with registered address in the Canary Islands or alternatively which have a permanent establishment in the Islands can make use of the exemption in ITP and AJD.
Conditions to register in the Special Register of Ships and Shipping Companies. The following may register in this register: Who can register in the Special Register?
G
What operations does the exemption cover?
The exemption covers the constitution, capital increase and acquisition of goods or rights which are situated, can be used or must be fulfilled on Canarian territory which are devoted to the extension, modernization or transfer of facilities. In the modality of corporate operations, only the incorporation or capital increase will be exempt in the part which is devoted to the investments set out in Article 25 of Act 19/1994 of the REF, and under no circumstances will the operations subject to the modality of Stamp Duty be exempt.
Any merchant ship with mercantile aims which carries on either coastal trading or external or extra-national trading. The ships, for which registration is requested in the Special Register must in any case satisfy certain requirements regarding minimum size, nationality of the Captain and of the crew, and other general matters. All the Shipping Companies which have their effective centre of control of the operation in the Region of the Canary Islands, on Spanish national territory or abroad, provided that in the last two cases there must be an establishment or permanent legal representative in the Region, accredited by means of public deed.
68
69
3.2

Fiscal benefits of the registration in the Ship and Shipping Register.
3.2.7
Is the Canarian customs regime different from that which is generally applied to the rest of the EU?
Canarian Free Trade Areas

Customs specialities. Free trade areas. Active Improvement. The coming into force of the Regulation (EEC) n.1911/91, relating to the application of the Community Law in the Canary Islands, and of the Decision 91/314/CEE, by means of which the Programme of Specific Options regarding Remoteness and the Island Nature of the Canaries (POSEICAN) is established, represent the full application in the Islands of all the common policies and the integration in the common customs territory, with specific singularities deriving from remoteness and the island nature of the Canary Islands.
Is it possible to have access to the fiscal benefits of the REB without being registered in this register? What are the fiscal advantages from registration?
The beneficiaries of the fiscal and economic advantages of registration in the Special Register of Ships and shipping companies extends to the crewmembers and companies of the ships assigned to the scheduled services between the Islands, and between these and the rest of national territory, as they cannot register in the said Special Register.
The fiscal advantages of the registration in the REB are the following:
G
Income Tax.
The crewmembers of the ships registered subject to IRPF, both by personal and real obligation, can consider 50% of the integral profits of their personal work as paid due to their sailing on ships that are registered as an income exempt from taxpaying for this concept.
G
Tax on Goods Transfers and Stamp Duty.
All the acts and contracts made on the ships registered in the Register, or alternatively, attached to the scheduled services mentioned above, are exempt from paying this tax.
G
Is there any specific application in the Canary Islands of the Common Customs Tariff (AAC)? What is the Specific Supply Regime (REA)?
The position of the Canaries in customs matters amounts to the following characteristics: a. The Islands have formed part of the common customs territory since 1st July 1991; since then the Common Customs Tariff has been gradually applied up to the year 2001 to imports from third countries.
Corporate Tax. The Specific Supply Regime (REA) makes it possible to continue to import certain essential products for Canarian production and consumption at prices similar to international prices through the application of a series of advantageous economic and fiscal measures: b. Since 31st December 2001 the Canary Islands Merchandise Import Duty (AIEM) has been set down in substitution of the old Canary Islands osty on Production and Import (APIC) and of the Special Tariff of Island Tax on the Entry of Goods. Finally, the approval of two Free Trade Areas in the Canary Islands, the Free Trade Zone of Gran Canaria and the Free Trade Zone of Santa Cruz de Tenerife, of the total of five existing in Spain, and the possibility of the practice of active improvement, jointly determine interesting economic advantages for the conduct of business activities implanted in their area of influence.
The Ships and Shipping Companies may benefit from an allowance of 90% of the portion of the tax liability of the tax which, after making the deductions for double taxation, correspond to the taxable base from the operation carried on by the shipping companies of the registered ships, or if applicable, relating to the scheduled services to which they are attached.
G
Contributions to National Insurance.
The crewmembers of the ships will enjoy an allowance of 90% on the business contribution to National Insurance.
70
71
3.2
What is a free trade area?

The Free Trade Area is a limited area, part of the community customs territory, in which the storage, transformation and distribution of goods are allowed without the application of charges, duties and indirect taxes. The main objective of the Free Trade Areas in the Canary Islands is to foment activities of external trade which have traditionally been carried out. The basic advantages which the Free Trade Area offers are as follows:
G
What are the peculiarities of the Canarian Free Trade Areas?
In November 1998, as the culmination of the process of negotiation with the community and Spanish authorities, the resolution was signed for the start up of the Free Trade Area of Gran Canaria which, after an initial phase of the creation of the Consortium, the preparation of the land and adaptation of the current regulations, began the effective reception and authorization of projects for installation in the year 2000. The Free Trade Area of Santa Cruz de Tenerife constitutes the first Open Free Trade Area in Spain and only the second of its kind in Europe. Via the Order EHA/93/2006, of 18th January, the setting up of a Free Trade Area for type II control (Open) was authorised, which is characterised by the fact that it covers all the space in the port area unlike the Free Trade Area of type I, where the activity takes place in a limited and fenced space within a certain port area.
Any kind of goods can enter the Free Trade Area independently of where they come from and it will be possible to operate with third countries whatever the transformation process may be. The goods may be sold freely, sent off for free circulation or exported outside the territory of the EU. Any operation carried out within the free trade area is exempt from all indirect taxes. Nor will measures of the commercial policies such as quotas, limits or restrictions of any kind be applicable.
What additional advantages do the Canarian Free Trade Areas offer with regard to the rest of Spain?
Additionally, the European Commission granted certain Free Trade Areas, including those of the Canary Islands, a series of advantages which the rest of the areas of this kind located in the EU do not have. Apart from the fact that the companies installed in the Free Trade Areas of the Canary Islands can also take advantage of the benefits offered by the REF and of a greater flexibility for the entry of goods from third countries, the main advantage is that the operations of active improvement in this area may not be limited by conditions of an economic nature as there is no requirement not to prejudice the Community producers.
Compatibility between fiscal incentives RIC RIC BPBC DIC ZEC ZF

(*) (**)
BPBC Yes _ Yes Yes Yes
DIC Yes* Yes _ Yes Yes
ZEC Yes** Yes Yes _ Yes
ZF Yes Yes Yes Yes _
_ Yes Yes* No Yes
What is understood by active improvement?
Active improvement means the generation of added value by means of productive or transformation activities. The justification of the practice permits the exoneration from the payment of the tariffs of entry for raw materials and imported components. Likewise, the conduct of operations of this kind in Free trade Areas liberates the companies from paying the indirect taxes for the added value generated. Only if they are subsequently exported to the common territory of the UE, including the Canary Islands, will the finished product have to pay them but not in the case that they are sent to a third country.
For different assets Under Certain Conditions Act 19/1994 of 6th July
RIC: Reserve for Investments in the Canary Islands BPBC: Allowance for Production of Tangible Goods in the Canary Islands DIC: Deduction for Investments in the Canary Islands ZEC: Canary Islands Special Zone ZF: Free Trade Area
72
73
How to set up in the Canary Islands
4.1
Institutional Support
4. HOW TO SET UP IN THE CANARY ISLANDS
The Canary Islands Government decisively supports investment in strategic sectors on the Islands. For this reason, the Division of Diversification and Promotion of Investments of PROEXCA , the publicly-owned company attached to the Regional Ministry of Economy, and treasury has entrusted to it an Agency for the Promotion of Investments of the Canary Islands region. We offer a confidential and free advisory service to those companies or projects in strategic sectors with interest in setting up in the Canary Islands and during all the stages of the investment process; from planning and evaluation to the establishment and future monitoring of the investment: PROEXCA services:
G
Permanent information service related with the Canaries including: permits, operating licences, industrial land, subventions and subsidies, specialist human resources, intellectual property, sources of financing and investment, or any other necessary productive factor. Preparation of sectorial reports adapted to each business project. Preparation of programmes of individualised meetings according to the requirements of each business initiative. Establishment of networks of cooperation and search for synergies with other possible agents for the success of the investment.
In its turn, the Consortium of the Canary Islands Special Zone (ZEC) has a multilingual technical staff which will attend free of charge to the demands of investors who are interested in setting up in the Canary Islands.
G
Advice on the Economic and Fiscal Regime of the Canaries (REF). The staff of the ZEC Consortium are specialists in taxation and will clarify for you any doubt that you may have on the advantages and fiscal exemptions, of which the businessperson who chooses the Canaries to do business can take advantage. Help for the businessperson in all the process of handling the authorisation to operate as a ZEC entity (orientation on the documentation to be presented, advice on drawing up the descriptive report on the activity and a guide in the preparation of the business plan).
76
77
4.2
Individual Businessman or Businesswoman
Legal forms in Spain
Advantages
G
Drawbacks
G
Private Limited Liability Company
Advantages
G
Drawbacks
G
Ideal for companies of limited size. Fewer steps are necessary for incorporation. It is not necessary to register in the Company Registry. The most economical way of setting up. There is no requirement for a minimum initial capital. The company is managed personally.
All the risk falls upon the businessperson. He is responsible for the debts of his business with the property of the business and his own. The owner of the company must face the costs and the investments alone, and also with management and the administration. If the volume of profits is high, the tax rate of Income Tax will also be high.
Liability limited to the capital contributed. The same democratic nature in the organs of Government as with Public Limited Companies. Demands less formal rigour in its organization and less minimum initial corporate capital (3,005.06 ) than the Public Limited Company. This is the form of company that is chosen by the majority.
Community of Goods/ Civil Company
Advantages
G
Drawbacks
G G
Few steps necessary for incorporation with minimal complexity and costs. There is no requirement for minimum initial capital. Fiscally, it pays in accordance with its earnings; the profits of the Company are imputed to the partners on the basis of their agreement. The risk of creating a company does not fall upon a single person.
The owners are responsible for the debts of the company with the property of the business and with their own property. It does not have a legal personality. It has no rights or obligations.
Requirement of minimum capital of 3,005.06 euros which must be fully subscribed and paid up at the moment of incorporation. At certain levels of profits, the fixed rate of taxation is of 2530% on Company Tax for companies of limited size, which may be a disadvantage in comparison with the variable rate of Income Tax. The stockholdings cannot be freely transferred without the consent of the other stockholders. Fiscal costs of 1% of the figure of Corporate Capital at the moment of incorporation on Capital Transfer Tax and Stamp Duty.
Limited New Business Company
Advantages
G
Drawbacks
G
Limited Liability Company
Advantages
G
Drawbacks
G
The liability of the shareholders is limited to the capital supplied to the Company. The condition of shareholder is freely transferred by the sale of shares. It has a vocation of expansion. The capital takes precedence over the shareholders.
High minimum initial capital (60,101.21 ). Formal rigour and complex organization. At least one Meeting of Shareholders must be called every year. Obligation to deposit the annual accounts at the Company Registry. Fiscal costs of 1% on the figure of the Corporate Capital at the moment of incorporation in Capital Transfer Tax and Stamp Duty
Use of electronic, telematic and computerised forms which notably speed up the time necessary for incorporation and regitration. Limited liability of the capital supplied. There is no minimum number of shareholders, (single-member company). Accounting can be carried out using a single register.
Requirement of minimum capital of 3,012 euros and maximum of 120,202 euros. At certain levels of profit, the fixed rate of 25-30% on Company Tax for companies of limited size may be a disadvantage in comparison with the variable rate of Income Tax. The number of founding shareholders may not be greater than five.
Source: www.creacionempresas.com Official Chambers of Commerce, Industry and Shipping of Santa Cruz de Tenerife and of Gran Canaria.
78
79
4.2

Employee-Owned Companies
Advantages
G
Drawbacks
G
Liability of the partners is limited to the capital subscribed by each one. The working partners have control of the Company. It is obligatory to devote a percentage of the profits to the Reserve Fund. They have allowances and exemptions in their incorporation (ITP and AJD, IAE...). Especially favourable regulations on subsidies and aids.
Requirement of minimum capital. More complex corporate organs, in the case of two kinds of shares (Shares of the working shareholders and shares of non-working shareholders). The shares cannot be freely transferred. Limited hiring of indefinite workers.
Cooperative Companies
Advantages
G
Drawbacks
G
Do not need a minimum social capital for its creation. The shareholders can be incorporated or resigned voluntary. All the shareholders participate in the company organs with the same rights. Its main objective is the general welfare of the workers and not the economic profit. Its compulsory to assign a percentage of the profits annually to the Reserve Fond and to the Educational and Promotion Fond. Allows the capitalisation for unemployment. It has allowances and fiscal exemptions in the taxes of (ITP, AJD and IAE). Favourable aid regulation.
The administration management can bring out problems and discussions regarding the organization and the smooth running of the Cooperative. The number of working hours of the workers can not be over the 30% of the total annual working hours carried out by the shareholders workers.
80
81
4.2

4.2.1 Comparative table of the different companies
LEGAL FORM BASIC LEGISLATION NUMBER OF SHAREHOLDERS/ PARTNERS MINIMUM CORPORATE CAPITAL
LIABILITY
SOCIAL SECURITY REGIME OF THE WORKING PARTNERS (RETA: Special Regime of Self-Employed Workers)
FISCAL REGIME (Income tax: Tax on income of Individuals)
ORGANS OF ADMINISTRATION
Individual Businessman (sole trader)
Individual Businessman (sole trader) Civil Company
Civil Code
Does not exist legally
Unlimited
RETA
IRPF
The businessperson himself/ herself Sole administrator, a number of joint administrators or all the partners Administrators: one, several or all the partners
Civil Code
Unlimited
RETA
IRPF
Common Ownership
Civil Code
Unlimited
RETA
IRPF
Trading Companies
Public Limited Company
R.D. Leg. 1/2010 of 2nd July
60,000 Minimum paid up 25%
Limited to the corporate capital supplied Limited to the corporate capital supplied
General Regime or Self-Employed
Company Tax
General Meeting of shareholders, Board of Directors or administrators
Private Limited Company
R.D.4/1997, of 24th March. Regulations of the Company Registry Act 7/2003, of 1st April, of the SLNE R.D. 682/2003 7th June, R.D. Leg 1/2010 of 2nd July
3,000 Totally subscribed and paid up from the start
Company Tax
General Meeting of shareholders, Board of Directors or administrators
Limited New Business Company
1 (between 1 and 5 individuals at incorporation)
Between 3,012 and 120,202 by means of monetary contributions
Limited to the corporate capital supplied
Company Tax
Unipersonal or pluri-personal organ made up of shareholders
Special Trading Companies
Employee-owned Company (SLL or SAL)
Act 4/95, of 24th March, on employee-owned companies Act 27/1999, of 16th July, General Cooperatives Act special to each of the Spanish Regions
3 At least two must have an indefinite contract
According to whether it is an SLL or a SAL
General Regime or Self-Employed, as appropriate. Possibility of election General Regime or Self-Employed (All partners opt for the same regime)
Company Tax
General Meeting of Shareholders, Board of Directors
Cooperative Company
Cooperation of 2nd degree: min. 2 Coop
Depends on what is set down in its Articles, but no shareholder may hold more than 1/3
Company Tax
General Meeting, Governing Council, Intervention
82
83
4.3
Steps required to set up a business activity

Steps for the Company creation
PROCEDURE PLACE
WHAT IS IT FOR
OTHER
Negative Certificate of Denomination
Business One-stop Shop or Central Company Registry
This certification accredits that the name selected for the Company does not coincide with a pre-existing name.
Deliver the application for negative certification at the offices of the Business One-stop Shop (VUE), which will deal directly with the Company Registry to obtain the certificate. The minimum paid-up Capital will vary according to the type of company chosen. As a consequence of the contributions made, the partners will receive a Bank Certificate. The Articles must be adapted to the characteristics of the company which it is intended to incorporate. For this purpose, although the content is defined for each kind of Trading Company in its respective regulatory regulations, the founding partners may include all licit agreements and conditions they deem appropriate.
Opening of a bank account in the name of the company
Banking institution
The partners must make their contributions to the initial Corporate Capital by opening a bank deposit.
Drawing up the Articles of the Company
Lawyers or notarys office.
The articles govern the internal juridical relationships of the Company. Obligatory minimum contents: - Denomination - Object - Domicile - Date of closure of the corporate financial year - Corporate capital and Stockholdings - Organization of the Administration of the Company This involves the signing by the founding shareholders of the Deed of Incorporation before a Notary and the approval of the Articles of the Company. Once the deed is executed, the notary will inform the Registry, and the companys name will be registered.
Execution of Public Deed of Constitution and Approval of Articles
Notary
At this moment, it is necessary to present: - The Certificate of Denomination from the Central Company Registry. - The Bank Certificate to accredit that the Corporate Capital is totally paid up. - The Corporate Articles in the Public Deed of Incorporation, if it is being dealt with directly and not through the Notarys Office. - The National Identity Document of all the partners. The Deed of incorporation must be registered in the Company Registry, within the period of two months to be counted from the date of execution.
84
85
4.3
Steps required to set up a business activity

Steps for the Company creation
PROCEDURE PLACE
WHAT IS IT FOR
OTHER
Application for the Fiscal Identification Code (C.I.F)
Business One-stop Shop (VUE) or Tax Office
It serves to fiscally identify the Company. The consequence is the assignation of a provisional Fiscal Identification Code for six months, the period to take out the definitive Fiscal Identification Card, which must be presented, also at that moment, together with the provisional Fiscal Identification Code and the photocopy of the Deed of Incorporation with the corresponding registration in the Company Registry, using Form 036.
The application for the Fiscal Identification Code must be made within the space of thirty days from the incorporation. Documents to present: - Official form, filled in (Form 036) and signed by all the shareholders, the administrator and the holder of power of attorney. - Photocopy of the Deed of Incorporation. - Photocopy of the National Identity Document of the Shareholders, administrator and holder of power of attorney.
Liquidation of Capital Transfer Tax and Stamp Duty (ITP and AJD)
Business One-stop Shop or the Regional Ministry of the Economy, Tax Office
It is obligatory to register for these taxes. By means of this liquidation 1% of the capital contributed is paid (the part devoted to investments set down in the REF is exempt). With the registration of the company in the Company Registry its incorporation is published in the BORME. All of this means that the Company acquires legal personality and that it is effective against third parties in good faith.
In order to register and liquidate it is necessary to fill in Form 600.
Registration in the Island Company Registry and publication in the Official Journal of the Company Registry (BORME)
Company Registry
Registration must be applied for in the two months following upon the execution of the public deed, presenting: - First copy of the public deed of incorporation and of the CIF. - Certificate of Denomination from the Central Company Registry. - Document in evidence of the Capital Transfer Tax and Stamp Duty.
86
87
4.4
Work and residence permits
Source: Invest in Spain Foreigners Guide. Prepared by Cuatrecasas, Gonalves Pereira. www.investinspain.org
The Spanish legislation in the matter of inmigration distinguishes between the cases of foreigners subject to the European Community regime and foreigners to whom the general rules on inmigration are applied. Application for a Foreign Citizens Identification Number (NIE)
ners in whose professional activity there are reasons of economic, social or employment interest; reasons relating to the conduct of work of research and development which requires a high qualification; or for artistic performances of great cultural interest. In these cases, access to the authorisations of workers and their families is simplified.
Nationals of Member States of the European Union
Those foreigners under the European Community regime, from other Member States of the EU, the European Single Space and Switzerland, do not need to obtain a work permit as an employee or with self-employed status, and can carry on their work under the same conditions as Spanish nationals.
G
Without prejudice to the foregoing provisions in relation with obtaining the work and residence permit, foreigners who are able to stay on Spanish territory must obtain a personal number, which is unique and exclusive: the Foreign Citizens Identification Number (NIE). The NIE is granted by the General Directorate of the Police at the request of the interested party. This number must feature on all documents issued as well as the stamps in his passport or analogous document. For the NIE, to be assigned, the interested party must present the documents described below at the Foreigners Office or at the General Office for Foreign Nationals and Documentation of the Police in the place where he is resident, as well as having to prove that he is not in Spain in an illegal manner:
G
Residents in the Canary Islands from the EU: 171,727 (source INE Census 2011) Residents in the Canary Islands not from the EU: 135,282 (source INE Census 2011)
Nationals of non-EU countries
Those foreigners to whom the European Community regime is not applicable will need an authorization to work and reside in Spain and a special visa to work. Those employers who wish to hire a non-EU foreigner must previously obtain the authorisation of the Ministry of Work and Social Affairs. Nevertheless, the lack of authorization to work will not invalidate the contract of employment with regard to the rights of the foreign worker nor will it be an obstacle to obtaining the benefits to which he might have a right. When the foreigner has resided legally in Spain in a continuous manner during five years renewing his work and residence permits (whether as an employee or self-employed) he can obtain a permanent residence permit. Once this authorisation has been obtained, the worker should apply for a foreigners identity card, which will be renewed every five years. Recently, a Decision of the Council of Ministers has been approved by which the procedure for authorising working and residence of foreig-
Application for the NIE: The form can be downloaded from the page of the Ministry of the Interior: http://www.mir.es/SGACAVT/modelos/extranjeria/modelos_extranje/ex_14.pdf Original passport and a photo of the passport, duly legalised and, if applicable, apostilled and with a sworn translation if the language of the document is not Spanish.
For the case of those interested in obtaining the NIE who cannot come personally to the competent authorities in Spain as they are in their country of origin, there is also the possibility of obtaining it at the Spanish diplomatic mission or the consular section located in the country of residence abroad, where the documents in proof of the reason of the examination have to be produced. The period for obtaining the NIE is between 30 and 60 days as a maximum.
88
89
4.5
Employment regime
Complementary Information
4.6
In the Canaries applied the same requisites, in terms of hiring, collective agreements and minimum wage, than at Spanish national level. In the same terms are applicable the ranges of Social Security contribution per worker. The main characteristics are:
G
Business One Stop Shop
Source: Ventanilla nica Empresarial www.ventanillaempresarial.org/vuteneri.htm www.ventanillaempresarial.org/vupalmas.htm
40 weekly working hours 30 natural days of holidays per year
Annual variation of minimum wage settled up by the Spanish Government

G
2011: 641.40 euros/month
Over the last few years, the Public Administrations of the Canaries (Ministry of the Revenue, Ministry of Work and Social Affairs, Ministry of Public Administrations, Ministry of the Economy, Canary Islands Government, Island Authorities and Local Authorities), together with the Superior Council of Chambers and the Official Chambers of Commerce, Industry and Shipping of Santa Cruz de Tenerife and of Las Palmas have devoted a great effort to facilitating the creation of companies. As one fruit of this cooperation, the Ventanilla nica Empresarial or Business One Stop Shop has been created, in which a team of experts from the Public Administrations and the Chambers of Commerce are available to the employer to help him in the different phases of creation of his business, from the definition of the project to the definitive start up. Among others, the Business One Stop Shop offers the following services: Integral procedures:
G
For more information see the chapter Employment Regime of the Spanish Doing Business Guide in www.investinspain.org
Fiscal procedures: obtaining the Fiscal Identification Code, registration in the Tax on Economic Activities (IAE), Registration for Canarian Indirect General Tax (IGIC), Census Declaration, issue of fiscal labels, etc. Procedures for Work and Social Security: Registration of the company and opening of an account for contributions, affiliation and registration of the workers in the corresponding regimes, formalisation of the cover of professional risks with the Social Security, etc. Authorizations and Registers of competence of the Canary Islands Government, according to the particular activity to be carried out. Authorizations of competence from the Island Authorities, according to the activity to be carried out. Municipal Licences: licences for the activity, licences for building work, licences for occupation of the public domain. Information on the requirements and steps, at national, regional and local levels, that are necessary for the creation of the company.
91
90
Life in the Canary Islands
5.1
The warmth of nature
5. LIFE IN THE CANARY ISLANDS
The Canary Islands are just 100 kilometres from the African Mainland. Nature has been generous to the Islands. The Archipelago is an oasis of greenery in the middle of the Atlantic Ocean thanks to the Trade Winds and the Gulf Stream that flows by. That is why summers are hot but not too hot, and the winters are mild, with temperatures varying between 13 and 21 Centigrade. The natural charm of the Islands can be seen in the 146 Protected Natural Areas, which include 4 spectacular National Parks, out of total of the 12 to be found in Spain as a whole, 3 Marine Reserves and 5 Biosphere Reserves. The beauty of the volcanic origins contrasts sharply with the spectacular, lush native forests, thanks to a climate that makes the flora (laurel forests, the cactus spurges and the Canary Island palms) and fauna (an extensive variety of birds and sea life) unique.
94
95
5.2
Cosmopolitan culture
Culture is manifest in each of the seven islands in the form of a wide variety of options in all fields: music, theatre, painting, sculpture, literature, dance, etc. and there are amazing auditoriums, theatres and art centres in the Islands to enjoy them. You should remember that the Canary Islands host countless cultural events of prestigious repute throughout Europe, such as:
G
The Canary Island Music Festival, the Canary Island edition of the Womad Festival and the International Jazz Festival. The Las Palmas de Gran Canaria International Film Festival, El Festivalito (La Palma) and the International Documentary Film Festival Opera seasons in the Prez Galds Theatre (Las Palmas de Gran Canaria) and the Guimer Theatre and in the Auditorium (Santa Cruz de Tenerife). Art exhibitions in the Modern Art Museum of Lanzarote, in the Tenerife Espacio de las Artes (TEA) in Santa Cruz de Tenerife and in the CAAM - the Atlantic Modern Art Centre -, where you will also find the Canary Island Museum to discover the remote past of the Archipelago, as you can in the Museum of Nature and Man, in Santa Cruz de Tenerife.
Traditional folk festivals are just as important and interesting. By way of example, these include:
G
Las Fiestas Lustrales or Five Year Fiestas of the island of La Palma, with their famous Dance of the Dwarves, and the Descent of the Virgin of Los Reyes, in El Hierro. Traditional processions and fiestas The carnival, with a deep-rooted tradition and international reputation. And we cannot forget the importance of Canary Island wrestling and La Gomera whistling (a language of whistles that has just been included on the UNESCO World Heritage list).
On the other hand, the Canary Islands are the birth place of celebrities such as the famous designer Manolo Blahnik, or the surrealist artist scar Domnguez. Their landscapes and peoples have inspired great playwrites like Shakespeare, as he spoke of the Islands in the 14th century, or Agatha Christie who wrote two of her greatest novels during her stays in the Islands: The Mystery of the Blue Train and The enigmatic Mr. Quinn, or Andr Breton, founder of surrealism, who wrote El viaje a Tenerife. Film directors like Almodvar on the other hand, have chosen the Canary Islands as the setting for their films, and Arab sheiks mix with members of the European aristocracy during their private holidays in the Islands.
97
96
5.3
Leisure and sports
The Canary Islands are a world tourism power with an advanced infrastructure of services to meet any demand. They have hotels, bungalows and apartments of the very highest quality, restaurants specialising in both typical Canary Island and international cuisine, sports facilities and a great night life, with casinos, discotheques and night clubs. These services comprise a product that attracts over 10 million visitors from all over the world, thanks to the mild, stable year-round climate. The range of leisure options is rounded off with a long list of theme parks that also act as tourist attractions. The rich and varied natural conditions of the Islands are an invitation to practise sports of all kinds, such as horse-riding, mountain biking, tennis, water sports like surfing, deep sea fishing and diving, among many others.
Amateurs, professionals and champions in sports such as windsurfing, kite surging or sailing flock to the Islands from the five continents all year round to train and practice their favourite sports. It is hardly surprising that Canary Islands sportsmen and women have won 7 Olympic gold medals and that the coasts host international water sports championships. Golf combines perfectly with leisure in the Canary Islands. You can play all year round on one of the 17 courses thanks to the wide variety of services and amenities. The Royal Bandama Golf Club on the island of Gran Canaria is the oldest in Spain, founded by the English in 1871.
99
98
5.4
Health
Education
5.5
The health services in the Canary Islands are European standard as far as quality goes. The Islands have efficient, modern health facilities: hospitals, medical research centres, primary and geriatric care centres. There are over 100 primary health care centres distributed throughout the Archipelago, although most of these health centres are concentrated on the two main islands. Furthermore, the Canary Islands have 14 public hospitals and 25 private ones, which care for the resident and floating population to the highest standards of quality and humane care. Thanks to this infrastructure and the staff available, the people of the Islands can enjoy health services that provide cover for the entire population.
It must be pointed out that almost one third of the 50,000 students enrolled at Canary Island universities are studying technical courses like engineering or I.T. There are two public universities and one private one, offering a broad range of courses in sciences and humanities. The Islands provide a considerable range of training courses through the public training programmes for companies. There are also international business schools and vocational training centres, which combine teachings of the most traditional professions with new technologies. As for non-university education, the Canary Islands have 801 vocational training centres distributed mainly between the two main islands of Tenerife and Gran Canaria, with 311 and 309 centres respectively. The Canary Islands offer high academic standards due to the variety of schools that have set up in the Islands, including a large number of bilingual schools. It is important to highlight the fact that English and German are widely spoken among the population.
100
101
5.6
Largest overseas communities in the Canary Islands

GERMANY The geographic location of the Canary Islands has acted as a link between countries that would have been irrevocably separated if it were not for the bridge that the Islands have become; a fact that has left its mark on the character and the idiosyncrasies of the Canary Islanders. Large numbers of foreigners currently maintain their residence in the Islands, attracted by the good weather, the quality of life and the character of a people that has welcomed them with open arms. This community of foreign residents has enhanced exchanges of all kinds, from international trade, to culture and exchanges of any other kind. Most of the foreign residents living permanently in the Canary Islands are European by origin. There is also a large community of residents from Latin America, especially from Cuba, Colombia, Venezuela and Argentina, the destinations of Canary Island emigrants in the 19th century and the first half of the 20th century, hence creating close ties. The Latin American community is the second largest of the ex-pat communities. As for Africa, there is a flourishing community, mostly from Morocco, Senegal and Mauritania, due to the geographic proximity of these countries. As far as Asia is concerned, the largest communities are the Chinese, Indian and South Koreans, and they continue to grow, driven by the economic growth of their countries of origin.
RELEVANT DATA ON GERMANY
German residents in the Canary Islands 2011 Tourists 2011 Direct flights
44,525 residents
2,476,697 tourists a year - Over 600 direct flights weekly, duration 5 hours approximately. - Some destinations: Berlin, Cologne, Dusseldorf, Munich, Nuremberg and Frankfurt. - 7 German schools, two of which are official: The Official German School of Las Palmas de Gran Canaria and the German School in Santa Cruz de Tenerife. Press: - Wochenblatt - Megawelle - Teneriffa Nachrichten - Teneriffa Express - Neue Presse - Info the Canaries Television: - Canal 60(TV) Radio: - Radio Megawelle - Asociacin Canaria de Germanistas: oriented to encouraging the teaching of the German language and the dissemination of the German culture in the Canary Islands - German Consulate, Province of Santa Cruz de Tenerife: Calle Costa and Grijalba 18, 38004 Santa Cruz de Tenerife. Phone/s: (+34) 922 248 820; Fax: (+34) 922 151 555; Mail: ngofp@hotmail.com - German Consulate, Province of Las Palmas: Calle Albareda 3-2, 35007 Las Palmas de Gran Canaria Telef.: (0034) 928 49 18 80; Phone.: (0034) 928 49 18 70 (Passport Department); Fax: (0034) 928 26 27 31
Schools
Media
Data source of attached tables: (2011; INE) and (Oct. 2010 - Sep. 2011; ISTAC)
Associations
Official Organisations
102
103
5.6
UNITED KINGDOM

RELEVANT DATA ON THE UNITED KINGDOM
RELEVANT DATA ON ITALY
British residents in the Canary Islands 2011 Tourists 2011 Direct flights
41,878 residents Official Organisations 3,535,126 tourists a year - Over 470 direct flights a week, duration 4 hours approximately. - Some destinations: London, Manchester, Birmingham, Liverpool, Edinburgh, Bristol, Newcastle, Belfast. - 16 bilingual schools - The British Club, in Las Palmas de Gran Canaria and The Lions Club in Santa Cruz de Tenerife - British Consulate, Province of Santa Cruz de Tenerife: Plaza Weyler, 8, 1 38003 Santa Cruz de Tenerife Tel: (+34) 922 286 863 Fax: (+34) 922 289 903 E-mail: Tenerife.Consulate@fco.gov.uk - British Consulate, Province of Las Palmas Calle Luis Morote 6-3 E-35007 Las Palmas de Gran Canaria Tel: (+34) 928 262 508 Fax: (+34) 928 267 774 E-mail: LasPalmas.Consulate@fco.gov.uk - Italian Consulate, Province of Santa Cruz de Tenerife: Calle del Pilar N 27, 38108 Santa Cruz de Tenerife Phone.: 922 27 57 09 Fax: 922 28 57 90 e-mail: consitatf@gmail.com - Italian Consulate, Province of Las Palmas: Calle Len y Castillo N 281, 35005 Las Palmas de Gran Canaria Phone.: 928-24.19.11; Fax: 928-24.47.86; e-mail: italiatheCanaries@msn.com
Schools Associations
SCANDINAVIA
RELEVANT DATA ON SCANDINAVIA
Scandinavian residents in the Canary Islands 2011 Tourists 2011 Direct flights
10,476 residents
Over 1,509,108 tourists a year The direct flights to Scandinavian countries are as follows: 45 to Sweden 41 to Norway 32 to Denmark 31 to Finland - There are two Swedish schools, one Norwegian and two Finnish schools - Sjomannskirken/Norwegian church of Gran Canaria Avenida de los Canarios, 12 35120 Arguinegun - The Swedish church Ansgargrden, Nstor of the Torre, 26 35006 Las Palmas de GRAN CANARIA Tel: 34-928-24 75 92 Fax: 34-928-23 41 42 E-mail: svenskakyrkan@skut.e.telefonica.net - Finnish Lutheran Evangelical Church Camino Sitio Litre, 13 Puerto de la Cruz - Tenerife Tel. 922 385765 105
ITALY
RELEVANT DATA ON ITALY
Schools 20,403 residents Churches
Italian residents in the Canary Islands 2011 Tourists 2011 Direct flights
306,010 tourists a year - Over 400 flights a week, with stopover in Madrid or Barcelona, duration between 6 and 10 hours approximately. - Some destinations: Milan, Bologna and Rome. - Portal: www.infocanarie.com
Media 104
5.6

RELEVANT DATA ON SCANDINAVIA
FRANCE
RELEVANT DATA ON FRANCE
Associations
- Nordmannsforbundet, Avdeling Gran Canaria Aruba 403 35130 Puerto Rico (Las Palmas) Phone: 928 725 000, Fax: 928 725 000 Web site: http://www.norseman.no/ - Skandinaviska Klubben/ Scandinavian Club of Las Palmas E-mail: skk@skanclub.e.telefonica.net Web: www.grancanaria.st/org - Skandinaviska Klubben/Scandinavian Club of San Agustn E-mail: skksyd@hotmail.com Web: www.skandinaviskaklubben.com - Las Palmas de Gran Canaria Norwegian Consulate C/ Luis Morote, 6 - 6 piso, 35007 Las Palmas Phone: 928 49 50 00 - Sta. Cruz de Tenerife Consulate General of Norway Edificio Fred. Olsen Polgono Industrial Aaza S/N 38111 Santa Cruz de Tenerife Phone: 922 62 83 71 - Swedish Consulate Calle Luis Morote, 6 - 4 35007 Las Plamas de Gran Canaria Tel: +34 928 261 751 Fax: +34 928 260 884 Mail: swedishconsulatelaspalmas@gmail.com - Santa Cruz de Tenerife, Konsulat Danish Consulate Villalba Hervs 5, 3 piso 38002 Santa Cruz de Tenerife Phone.: 922 275 757 Fax.: 922 240 287 E-mail: dankon@idecnet.com www.dakonic.net - Finnish Consulate in Las Palmas Calle de Jos Franchy Roca, 5 35007 Las Palmas De Gran Canaria 928 22 43 58
French residents in the Canary Islands 2011 Tourists 2011 Direct flights French Schools
8,041 residents
Over 251,654 tourists a year Paris - 2 official French schools, administered by the French Lay Mission: College Jules-Verne of Tenerife Lycee Franais Ren-Verneau, in Gran Canaria - There are two Alliances Franaises, one in each of the capitals - Honorary Consulate of France in Santa Cruz de Tenerife Calle Punta de la Vista,3 - 1 38111 Santa Cruz de Tenerife Tel. 922 23 27 10-922.23.25.17 E-mail : agenceconsulaire.tenerife@telefonica.net - Honorary Consulate of France in Las Palmas de Gran Canaria Calle Nstor de la Torre, 12 35006 Las Palmas Tel. 928 29 23 71 E-mail : consulfrancelp@hotmail.com
Associations Official Organisations
INDIAN COMMUNITY
RELEVANT DATA ON THE INDIA
Residents from India in the Canary Islands 2011 Associations
3,875 residents
- Hindustani Club of Las Palmas Calle Len y Castillo, 415. 35007 Las Palmas de Gran Canaria Telfono 928 273 718 - Asociacion Hind Tenerife Sur Comunidad de Bienes Association - Noelia Afonso Cabrera s/n, 38660 Playa de Las Amricas, Tenerife Phone: 922752307
107
106
5.6

RELEVANT DATA ON THE INDIA
BRAZIL
RELEVANT DATA ON BRAZIL
Associations
- Club India Calle Agustn de Bethencourt, 25 38400 Puerto de La Cruz (Tenerife) Tel: 922 388 661
- Honorary Consulate General of India in Tenerife, Calle Villalba Hervs N. 15 -1st Floor, PO Box 336, 38002 Santa Cruz de Tenerife, Canary Islands Tel: 92 224 14 16, 92 224 35 03 Fax: 92 228 97 55
Brazilian residents in the Canary Islands 2011 Direct flights
About 3,000 residents
- Over 500 flights a week, with stopover in Madrid or Barcelona, duration 24 hours approximately - Destination: Sao Paolo and Ro de Janeiro. - Honorary Consulate of Brazil in Santa Cruz de Tenerife: Carretera General La Cuesta Taco, Km. 0.5, 38320 La Laguna, Tenerife. Phone.: +34 92 247 20 02; Fax: +34 92 247 20 03; - Honorary Consulate of Brazil in Las Palmas de Gran Canarias: Calle Nicols Estvanez N 18, 35007 Las Palmas de Gran Canaria. Phone.:+34 92 826 32 39; Fax: +34 92 827 75 34. - Brazil-Spain Chamber of Commerce: Canarian Chapter Calle Francisco Gouri, 107 35002 Las Palmas de Gran Canaria.
UNITED STATES
RELEVANT DATA ON THE UNITED STATES
American residents in the Canary Islands 2011 Direct flights
Nearly 850 residents
- There are over 500 flights a week to any city in the U.S. with a stopover in Madrid or Barcelona, taking more than eight hours. - There is the American School of Las Palmas - US Consulate in the Province of Las Palmas: Edificio ARCA, Calle Los Martnez Escobar, 3, Oficina 7, 35007 Las Palmas. Opening hours of office: 10:00 a.m. to 1:00 p.m. (local time). Phone.: 928271259; Fax: 928225863 - American Chamber of Commerce: Canarian Chapter. Calle Len y Castillo, 24, 35003 Las Palmas de Gran Canaria (Las Palmas). Phone.: 928 370 286
Schools Official Organisations
108
109
Addresses of interest
Canary Islands Government www.gobcan.es www.invertirencanarias.com
Proexca www.proexca.es/invertir-en-canarias.jsp
Empleo, Industria y Comercio www.gobcan.es/cicnt/

Industry and Energy, Industrial development, Data Protection Agency, Electronic Commerce, Plan of Improvement of Quality in Commerce, Guides to the rights of consumers, Consumer Committee of the
Canaries, Public Body: Radiotelevisin Canaria, etc.
Turismo www.gobcan.es/turismo/
Tourism guides, HECANSA, Statistics, Grants, Guidelines of Tourism Planning, etc.
Websites of the Regional Ministries

Access to the Websites of the Ministries of the Canary Islands Government is as follows:
Presidencia, Justicia y Seguridad www.gobcan.es/cpj/

Rights of the Citizens, Safety and Emergencies, One Stop Shop, Academia Canarian Safety Academy, Canarian Institute of Public Administrations, Territorial Administration and Governance, General Inspectorate of Services, etc.
Marine Reserves, Marine Reserves, etc.; Food: Wine guide, Fairs and Promotions, Organic agriculture, etc.
Webs of Publicy-Owned Companies

Sociedad Canaria de Fomento Econmico S.A. (PROEXCA). www.proexca.es/ Agencia Canaria de Investigacin, Innovacin y Sociedad de la Informacin (ACIISI) agencia.itccanarias.org/es/ Cartogrfica de Canarias, S.A. (GRAFCAN). www.grafcan.com/ Gestin de Servicios para la Salud y la Seguridad en Canarias (GSC). www.gsccanarias.com/ Gestin Recaudatoria de Canarias.(GRECASA). www.grecasa.org/ Instituto Tecnolgico de Canarias, S.A. (ITC). www.itccanarias.org/ Sociedad para el Desarrollo Econmico en Canarias (SODECAN) www.sodecan.es/ Canarias Cultura en Red, S.A. www.gobiernodecanarias.org/cultura/cc r1/ccr.html Viviendas Sociales e Infraestructuras de Canarias, S.A. (VISOCAN). www.visocan.es/ Gestin y Planeamiento Territorial y Medioambiental, S.A.U. (GESPLAN). www.gesplan.es/ Gestin Urbanstica de Santa Cruz de Tenerife, S.A. (GESTUR TENERIFE). www.gesturtenerife.com/ Gestin del Medio Rural de Canarias S.A.U. (GMR CANARIAS). www.gmrcanarias.com/ Promotur Turismo Canarias, S.A. www.promoturturismodecanarias.org Hoteles Escuela de Canarias, S.A. (HECANSA). www.hecansa.com/ Gestin Urbanstica de Las Palmas, S.A. (GESTUR LAS PALMAS). www.gesturlp.es/
113
Educacin, Universidades, Cultura y Deportes www.gobcan.es/educacion/

Education: Teaching staff, Pupils, Centres, Inspectors of Education, etc.; Culture: Cultural Agenda, Publications, Cultural Heritage, etc.; Sports: School, Native sports, Copa de Canarias, Anti-doping commission, etc.
Economa y Hacienda www2.gobiernodecanarias.org/hacienda/

Virtual Office, Taxpayers Calendar, Management of Payments of the Canarian Treasury, System of Economic-Financial Information and of Infrastructures and Equipment of the Canaries, Act of General Budgets, etc.
Bienestar Social, Juventud y Vivienda www.gobcan.es/bienestarsocial/

Home exchange, Pensions for disability, Law of Adoptions, Virtual Office, Law of Dependence, Day Centres for the Aged, Guardianship, Legal Advice, Training, etc.
Obras Pblicas y Transportes www.gobcan.es/citv/

Road Infrastructures , Water Plan, Ports of the Canaries, Transport, Help and Subventions, etc.
Sanidad www2.gobiernodecanarias.org/sanidad/
Appointments, Emergencies, Waiting lists, Vaccinations, Canarian Drug Plan, Health Users Rights, etc.
Agricultura, Ganadera, Pesca y Alimentacin www.gobcan.es/agricultura/

Agriculture: Plant Health Information, System of Geographical information on agricultural plots, etc.; Livestock: Zoological nuclei, Bird Flu, Native breeds, etc.; Fishing: SeASAP the Canaries, Fishing Licences, 112
Medio Ambiente y Ordenacin Territorial www.gobcan.es/cmayot/index.jsp

Sustainable Development, Territorial Planning, Attention to the Citizen, SITCAN, Distinctions and Prizes, etc.
Island Authorities
Cabildo de Lanzarote www.cabildodelanzarote.com Cabildo de Fuerteventura www.cabildofuer.es Cabildo de Gran Canaria www.grancanaria.com Cabildo de Tenerife www.cabtfe.es Cabildo de La Gomera www.cabildogomera.org Cabildo de La Palma www.cablapalma.es Cabildo del Hierro www.elhierro.es
Chambers 0f Commerce
Chamber of Commerce of Lanzarote www.camaralanzarote.org Chamber of Commerce of Fuerteventura www.camarafuerteventura.org Chamber of Commerce of Gran Canaria www.camaralaspalmas.org Chamber of Commerce of Tenerife www.camaratenerife.com
Research Institutes
Centro Oceanogrfico de Canarias www.ieo.es/tenerife.html Instituto Canario de Ciencias Marinas (ICCM) www.iccm.rcanaria.es Centro de Biotecnologa Marina (CBM) www.cbm.ulpgc.es Banco Nacional de Algas (BNA) www.bna.org.es Plataforma Ocenica de Canarias (PLOCAN) www.plocan.eu Instituto de Astrofsica de Canarias (IAC) www.iac.es Instituto Nacional de Tcnica Aeroespacial (INTA) www.inta.es Instituto Canario de Investigacin del Cncer (ICIC) www.icic.es Instituto Canario de Enfermedades Tropicales (ICET) www.ull.es/view/institutos/tropicales/ Inicio/es Instituto de Tecnologas Biomdicas (ITB) www.ull.es/view/institutos/itb/Inicio/es Fundacin Canaria de Investigacin y Salud (FUNCIS) www.funcis.org Instituto Universitario de Biorgnica Antonio Gonzlez (IUBO) www.ull.es/view/institutos/iubo/Inicio/es
Instituto de Productos Naturales y Agrobiologa (IPNA) www.ipna.csic.es Instituto Canario de Investigacin Agraria (ICIA) www.icia.es Instituto Tecnolgico de Canarias (ITC) www.itcccanarias.org Instituto Tecnolgico de Energas Renovables (ITER) www.iter.es
Universities
University of Las Palmas de Gran Canaria (ULPGC) www.ulpgc.es/ University of La Laguna (ULL) www.ull.es/
Other organisations of interest

Spanish Institute of External Trade www.icex.es SIECAN (Business Information System of the Canaries) www.siecan.org SOFITESA (Company for Promotion and Investments on Tenerife S.A.) www.sofitesa.com Tenerife Capital Business www.tenerifecapitalbusiness.org Tenerife Industria www.tenerifeindustria.com SODEPAL (Company for Promotion and Economic Development of La Palma) www.propal-lapalma.com
114
Statistics
ISTAC: Canarian Institute of Statistics. www.gobiernodecanarias.org/istac/ INE: National Statistical Institute. www.ine.es
SPEGC (Company for the Economic Promotion of Gran Canaria) www.spegc.org Industrial areas and estates of Gran Canaria www.grancanaria.com Ports of Las Palmas www.palmasport.es Ports of Tenerife www.puertosdetenerife.org Free trade area of Gran Canaria www.zonafranca.org Zona Especial Canarias (Canary Islands Special Zone) www.zec.org
SPAIN
Invest in Spain www.investinspain.org La Moncloa www.la-moncloa.es
EUROPE
Europa europa.eu
115
Clusters and associations by sectors
National Government Office Representation

Plaza de la Feria, 24 35071 - Las Palmas (Palmas, Las) Tel.: +34 928 99 92 60 (Opening hours: Monday to Thursday 9.00 a.m. to 5.30 p.m. and Friday from 9.00 a.m. to 2.00 p.m.)
Clusters
Biotechnology and health sciences
Cluster de Biotecnologa de Canarias. (Cluster Clubican) Tel. +34 928 459 940/50 Cluster Aloe Vera, Biodiversidad y Plantas Medicinales, (CABIOMED) www.cabiomed.es Cluster de Biotecnologa e Industria Farmacutica de Canarias (BIOTIFARM) www.biotifarm.es Cluster Salud Innovacin . Tel. +34 922 203 93 Federacin Canaria de Empresarios de Tecnologas de la Informacin, Innovacin y Comunicaciones (FECATIC) www.fecatic.org
Outsourcing
Asociacin Cluster de la Ingeniera de Canarias (ACIC) www.clusteringenieria.com
Audiovisual sector
Cluster Audiovisual de Canarias www.acepacanarias.com Cluster IM Innovacin Multimedia Tel. +34 922 568 900 Cluster Plataforma Canaria de Contenidos Innovadores www.clusteraudiovisualcanario.es
National Government Sub-office Representation

Calle La Marina, 20 38001 - Santa Cruz de Tenerife (Santa Cruz de Tenerife) Tel.: +34 922 99 93 00 (Opening hours: Monday to Thursday 9.00 a.m. to 5.30 p.m. and Friday from 9.00 a.m. to 2.00 p.m.)
Renewable energies and clean energies

Cluster Empresarial de Energas Renovables, Medio Ambiente y Recursos Hdricos. (RICAM) www.clusterricam.org Cluster Construccin sostenible en Canarias www.clusterccs.org
Tourism sector
Cluster del Turismo de Canarias www.clusterturismo.com AEI Turismo Innova Gran Canaria clusterturismo.ning.com/group/aeigran canaria Cluster Insular de Turismo de Tenerife Tel. +34 922 334 060 Cluster Bike www.tenerifebike.com
Information and communications technologies (TIC)

Canarias Excelencia Tecnolgica (CET) www.canariasexcelenciatecnologica.com Cluster TIC Insignia Empresarial www.insigniaempresarial.com
116
117
Logistics and transport sector

Cluster Canario de Transporte y Logstica (CCTL) www.cctl.es
Associations
Biotechnology and health sciences
Asociacin de Clnicas y Centros de Hospitalizacin de Las Palmas Tel. 928 263 232 Fax 928 227110 Asociacin de Clnicas Privadas Tel. 922 629440 Fax 922 617074 AFARTE - Asociacin de Farmacias de Santa Cruz de Tenerife Tel. 922 204310 Fax 922 203195 COFARCA - Cooperativa Farmacutica Canaria. www.cofarca.es
Logistics and transport sector

ANACEF - Asociacin Nacional de Armadores de Buques Congelados de Cefalpodos Tel. 928 475942 Fax 928 475944 ASEPOR - Asociacin de Empresas y Profesionales de Servicios Portuarios de Canarias Tel. 928 364411 Fax 928 365495 Asociacin de Consignatarios y Estibadores de Buques de Las Palmas www.asocelpa.es Federacin Canaria de Empresas Portuarias www.fedeport.org Federacin de Empresarios del Transporte Tel. 928 431460 Fax 928 380972 Asociacin de Empresarios de Actividades Hidrulicas Tel. 928 361253 Fax 928 361253 Asociacin de Empresas del Fro Tel. 928 467404 Fax 928 460391 Asociacin provincial de consignatarios Tel. 922 243298 Fax 922 249608
Tourism sector
Asociacin de Empresarios de Hostelera y Turismo www.aehtf.es ASHOTEL www.ashotel.es EAHTF (Asoc. Empr. de Hostelera y Turismo) Tel. 928 532418 Fax 928 531033 Federacin de Empresarios de Hostelera y Turismo de Las Palmas (FEHT) www.feht.es Asociacin de Empresarios Tursticos de Lanzarote (AETUR) www.aetur.es
Maritime sector
Cluster Martimo de Canarias (CMC) www.clustermc.es
Other sectors
Cluster Conocimiento en Gestin de Organizaciones (ClusterGO) www.clustergo.ning.com Cluster de Agroalimentacin Tel. +34 922 316 502. Ext. 9585 Cluster de Tabaco de Canarias www.tabaqueroscanarios.es
Other sectors
AECP - Asoc. Empresarios de la Construccin de Las Palmas www.aecplpa.es AEMPIC - Asoc. Empresarios Promotores e Inversores de Canarias Tel.928 433743 Fax 928 433392 AJECA - Asociacin de Jvenes Empresarios de la Comunidad Autnoma de Canarias Tel. 922 240236 Fax 922 152779 AMECA - Asociacin de Mujeres Empresarias de Canarias www.mujeresempresarias.org
119
Information and communications technologies (TIC)

AINCO - Asociacin de Empresas de Ingenieras y Consultoras de Las Palmas Tel. 928 383 531 Fax 928 383753 FECANET - Federacin Canaria de Nuevas Tecnologas Tel. 922 241018 FEMETE - Fed. Provincial de Empresarios del Metal y Nuevas Tecnologas de SC de Tenerife www.femete.es
118
AMEP - Asociacin de Mujeres Empresarias y Profesionales de S/C Tenerife www.ameptenerife.com ASINCA Las Palmas www.asinca.es ASINCA Tenerife www.asinca.es CCE - Confederacin canaria de Empresarios de las Palmas www.ccelpa.org CECAPYME - Confederacin Canaria de la Pequea y mediana empresa www.cecapyme.com CEOE - Confederacin canaria de Empresarios de la provincia de Tenerife www.ceoe-tenerife.com Club de Exportadores e Importadores de Canarias Tel. 928 327368 Fax 928 327 213
CONFECO - Confederacin Canara del Comercio Tel. 928 360203 Fax 928 431025 FEDECO - Federacin de Comercio de SC de Tenerife www.fedecotenerife.com FELAPYME - Federacin Insular de Pequeos y Medianos Empresarios de Lanzarote www.felapyme.org FEMEPA - Federacin de Empresarios del Metal de Las Palmas www.femepa.org FEPECO - Fed. Provincial de entidades de la construccion (Tenerife) www.fepeco.org FUNDESCAN - Fundacin Canaria para el desarrollo social www.fundescan.es
EDITA: Sociedad Canaria de Fomento Econmico S.A. PROEXCA AUTORAS: Carmen Sosa Correa Queila Delgado Ojeda
DISEO Y MAQUETACIN:
Idafe Estudio
IMPRESIN:
Grficas Juma
DEPSITO LEGAL:
GC 451-2012
120

Doing Business in The Canaries

Caricato da

Informazioni sul documento

Descrizione originale:

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Doing Business in The Canaries

Caricato da

Copyright:

Formati disponibili

Doing Business in the Canaries

A guide to investing, working and living in the Canary

Doing Business in the Canaries

Introducing the Canary Islands

The Canary Islands, a strategic enclave between continents

1. INTRODUCING THE CANARY ISLANDS

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

1.2.1 Market access

Provincia de Sta. Cruz de Tenerife

Provincia de Las Palmas

LA PALMA Santa Cruz de La Palma TENERIFE

Santa Cruz de Tenerife LA GOMERA San Sebastin de La Gomera Valverde EL HIERRO

Puerto del Rosario

FUERTEVENTURA Las Palmas de Gran Canaria

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

b) Excellent transport and communications facilities

No direct weekly flights (main destinations):

Passenger traffic in Canary Island airports in 2011

467 448 334 45 41 31 29

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

Transport infrastructure in the Canary Islands 2011

MARINAS ROAD NETWORK

Source: ISTAC, AENA, PUERTOS DEL ESTADO, INE, GOBIERNO DE CANARIAS

Reasons for investing in Canaries

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

1.2.2 The best Tax Regime in Europe

France Italy Spain Germany United Kingdom Portugal

The chance to pay less in Company Tax

Finland Netherlands Greece Average Poland Ireland

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

1.2.3 Access to talent

Reasons for investing in Canaries

1. INTRODUCING THE CANARY ISLANDS

1.2.4 Access to knowledge

1. INTRODUCING THE CANARY ISLANDS

1.3.1 Canary Island GDP

Distribution of GDP at market prices by sectors of activity 2011 (%)

Agriculture Energy Industry Construction Services

Gross Domestic Product at market prices (%)

-4,2 -3,7 -4,3

Canaries Spain EU-27 (Euros) 19,806 23,271 26,166

PER CPITA GDP 2011

CANARIES SPAIN EUROPE

TOURIST ARRIVALS HOTEL BEDS SELF-CATERING BEDS

13,750,092 237,900 193,300

1. INTRODUCING THE CANARY ISLANDS

1.3.2 Population. Socio-economic data.

2003: 1,894,868 hab. 2011: 2,126,769 hab.

1.3.3 Labour market

Extremadura The Canaries

Minimum Wage 2011 641.40 euros/month

Working week 40 hours/week

2.1 Bio-technology and Health Sciences

2.2 Renewable Energies and Clean Energies

2.3 Information and Communication Technologies (ICTs)

Other interesting opportunities in the Canary Islands include:

2.5 Audio-visual Sector