The sunny Canary Islands are one of the most popular holiday destinations in all areas of Spain. More than 10 million tourists annually come to Tenerife alone. That is why the real estate market in Spain is one of the fastest growing in the world.
Paradise climate, beautiful landscapes, a large number of tourists – this is not all that the Canary Islands attract investors. The archipelago has various tax incentives that have been introduced in order to compensate for the difficulties of doing business, due to the remote geographical location of the islands from Spain and to attract more investment. This, in turn, is one of the decisive factors why it is worth investing in the Canary Islands.
Types of investments
1. Acquisition of a ready-made business
2. Buying land for construction
3. Purchase of Real Estate
4. Primary investment
Let’s highlight the most attractive tax benefits of the Canary Islands for investing and doing business.
Zone ZEC (Special Economic Zone)
Investors are especially interested in the special economic zone of the Canary Islands. It is an area with a reduced corporate tax rate of 4%. At the same time, the average rate of European taxation is 25%. In order to get a reduced rate, you need to create a minimum number of jobs. The minimum investment threshold is also important.
IGIC (Special Sales Tax)
In the Canary Islands, there is no VAT customary to everyone. Instead, there is a special IGIC sales tax. The general rate for him is only 7%. For comparison, in Spain the size of such a tax is 10% for residential and 21% for commercial real estate.
RIC (Reserves for Investment in the Canary Islands)
Your company must be physically and legally located in the Canary Archipelago. This is the most important prerequisite for using RIC. Tax incentives of this type make it possible to reduce income tax by up to 90%. This is a very strong tax incentive to facilitate the capitalization of the company.
Among other things, within the framework of European regulations in the field of accumulation of various types of assistance, all tax incentives in the Canary Islands are compatible with other tax incentives.
No matter what type of property you are looking to purchase, you will need the help of a professional. The Buy Hotels company is ready to help you with selection of Real estate for investment, with procedure for registering company in a special zone. We will also provide full legal support for the transaction and after-sales service.