Author's name: PASQUALE LORENZO GALLESI

  Setting up a holding company in the Canary Islands: does it really pay off? The Canary Islands, thanks to their special tax regime, known as the "Economic and Fiscal Regime" (REF), are attracting more and more investors interested in setting up a holding company. But what are the advantages and disadvantages of this choice? In this article we will look in detail at the various aspects to consider in order to make an informed decision. Why choose the Canary Islands? The REF offers several tax benefits to holding companies, including: Corporate Income Tax (IS): reduced rate to 4% for the first 4 years and 15% for subsequent years. General Canary Island Tax (IGIC): exemption for foreign operations and reduced rate to 7% for domestic operations. Customs duties: exemption or reduction for importation of goods destined for the Canary Islands. Requirements for establishing a holding company in the Canary Islands: The holding company must be a tax resident of the Canary Islands. Must have a real corporate purpose and carry on an actual economic activity. It must have a minimum share capital of 60,000 euros. It must meet the criteria established by the REF regarding employment, investment and reinvestment of profits. Advantages of a holding company in the Canary Islands: Reduced tax burden: the savings can be significant, especially for holding companies that operate internationally. International tax planning: the holding company can be used to optimize the taxation of global income. Asset protection: the holding company can serve as a tool to protect personal assets. Access to a larger market: the Canary Islands are part of the European Union, which facilitates access to the single market. Disadvantages of a holding company in the Canaries: Complexity of the tax system: the REF is a complex system and requires specific knowledge of the regulations. Risk of tax audits: the Spanish authorities may conduct tax audits to verify compliance with the REF. Incorporation and management costs: the costs of setting up and running a holding company in the Canary Islands can be higher than in other countries. Is it really worth setting up a holding company in the Canary Islands? The answer depends on several factors, including: The size and structure of the corporate group. The type of business carried out by the holding company. The international tax planning strategy. The risk appetite. Before making a final decision, it is advisable to consult an accountant or consultant experienced in international taxation to carefully weigh the advantages and disadvantages of this choice. In addition to the above information, it is important to delve into the following aspects: The different types of holding companies that can be established in the Canary Islands. The procedures for setting up a holding company. The tax and accounting obligations to which holding companies are subject. The economic development opportunities offered by the Canary Islands. Some useful resources for further study of the subject: Canary Islands Government Website: https://www.gobiernodecanarias.org/ Canary Islands Economic and Tax Regime Portal: https://www.referee.com/portal/ Guide to Setting Up a Holding Company in the Canary Islands: https://www.investimenticanarie.com/info-strategiche/holding-canarie?lang=it Conclusion: The Canary Islands can be an attractive option for setting up a holding company, especially for companies that operate internationally and wish to optimize their taxation. However, it is important to carefully evaluate the various aspects and potential risks before making a final decision. It is advisable to consult an experienced professional to receive a personalized assessment specific to your case.

The Canary Islands, located off the northwest coast of Africa, are a Spanish territory with a unique tax regime that offers various benefits to businesses. This regime, known as the "Canary Islands Economic and Fiscal Regime" (REF), was established to promote economic development in the archipelago and attract foreign investment. In this article, we will take a detailed look at the main concessions under the REF, the requirements for eligibility, and the potential advantages and disadvantages for businesses. The main benefits of the REF: Corporate Income Tax (IS): reduced rate to 4% for new companies setting up in the Canary Islands and creating at least 5 jobs. General Canary Island Tax (IGIC): reduced VAT rate to 7% for most goods and services. Customs duties: exemption or reduction of customs duties for the importation of goods destined for the Canary Islands. Hiring incentives: tax relief for hiring new workers. Eligibility Requirements: Businesses must be established in the Canary Islands. Economic activities must be carried out within the Canary Islands territory. Businesses must meet the criteria established by the REF regarding employment, investment and reinvestment of profits. Benefits for businesses: Reduced tax burden. Increased competitiveness. Access to a market of more than 2 million people. Opportunity to benefit from a stable economic and political environment. Disadvantages for businesses: Complex system of rules and procedures. Risk of tax audits by Spanish authorities. Difficulty in finding qualified personnel. Are the Canary Islands a tax haven? The answer to this question is not simple. The REF undoubtedly offers significant tax breaks to businesses, which can translate into significant cost savings. However, it is also important to consider the requirements for accessing the benefits, the complexity of the tax system, and the potential risks of tax audits. Ultimately, the choice to open a business in the Canary Islands must be carefully evaluated, considering the specifics of one's business and investment objectives. In addition to the above information, it is important to delve into the following aspects: The different types of economic activities that can benefit from the REF. The procedures for obtaining tax benefits. The tax and accounting obligations to which businesses are subject. The economic development opportunities offered by the Canary Islands. For a complete and personalized assessment, we recommend consulting an accountant or consultant experienced in international taxation. Some useful resources for further study: Canary Islands Government website: https://www.gobiernodecanarias.org/ Canary Islands Economic and Tax Regime Portal: https://www.gobiernodecanarias.org/hacienda/dgplani/ref/ REF Guide: https://www.linkedin.com/in/guida-al Conclusion: The Canary Islands offer an advantageous tax regime for businesses that can translate into increased competitiveness and cost savings. However, it is important to carefully evaluate the requirements, complexity of the system, and potential risks before making a final decision.

The Canary Islands, with their mild climate, breathtaking scenery and favorable tax regime, are an increasingly popular destination for entrepreneurs seeking investment opportunities or wishing to relocate to a paradisiacal location. In this article, we will explore the tax benefits offered to businesses operating in the Canarian archipelago. Canary Islands Economic and Fiscal Regime (REF) The Canary Islands Economic and Fiscal Regime (REF) provides a series of tax breaks, incentives and deductions aimed at the creation and development of business activities in the Canary Islands territory. The main objective is the diversification of the Canarian economy and the consequent creation of jobs1. 2. Taxes and Tax Rates for Businesses The Canary Islands offers significant benefits for businesses: Canary Indirect General Tax (IGIC): IGIC is the local equivalent of VAT. The IGIC rate stands at 7 percent for domestic transactions. This reduced rate is an incentive for companies operating in the archipelago. Zona Especial Canaria (ZEC): The ZEC is a special economic zone that offers even more advantageous tax conditions. Companies registered in the ZEC can benefit from full exemption from IGIC and other taxes for a period of 10 years2. Canary Islands Investment Reserve (RIC): The RIC allows businesses to deduct up to 90 percent of the profit made. This incentive allows for a wide range of new investments, including the purchase of equipment, construction and renovation of buildings, and other investments aimed at business development2. 3. Incentives for New Self-Employed Professionals As of January 1, 2024, a zero quota was introduced for new self-employed professionals registered in the Canary Islands. This means that self-employed professionals will not have to pay any tax for an initial period. This incentive aims to support the archipelago's more than 139,000 entrepreneurs3. 4. Create Jobs and Invest To qualify for a reduction in the ZEC rate, businesses must meet two basic requirements: Create at least five jobs in the first year of operation. Invest a minimum of 100,000 euros in physical and tangible assets in the Canary Islands2. Conclusion The Canary Islands' tax regime provides a business-friendly environment, incentivizing investment and economic development. Before making important decisions, it is always advisable to consult an experienced tax advisor to evaluate options and plan appropriately. 🌴💼🏢

The Canary Islands, with their unique geographic location, offer an attractive tax regime for anyone wishing to invest or relocate to this Spanish region. Let's look at the main features of this regime and how it affects taxation for individuals, freelancers and businesses. The Context of the Canary Islands The Canary Islands are part of the European Union, but they are considered Ultraperipheral Regions. This special status stems from their geographic location far from mainland Europe. Due to this status, the Canary Islands enjoy certain fiscal advantages over other European states. Let's see what they are: Extraterritoriality of VAT: The Canaries are exempt from VAT, which means it is not due here. This is particularly attractive for businesses operating in the archipelago. Reduced tax rates: For business entities, the Canaries offer reduced taxation. The IGIC, the local equivalent of VAT, stands at 7 percent for domestic transactions. In addition, the IGIC also acts as a customs duty, allowing free movement of people but not goods. Proportional IRPEF: The Income Tax on Physical Persons (IRPEF) in the Canary Islands is levied at proportional rates. Here are the details: 0% for basic consumer goods such as energy, water and telephony. 2% for goods. 5% for services. 13.5% for luxury goods. Reliefs and Reliefs Tax reliefs affect not only businesses but also households. Here are some highlights: Child relief: Families may qualify for relief based on the number of children: €1700 if a child studies on another island in the archipelago. About €2000 for each child under the age of 13. €1500 for each child over the age of 15. Families with 3 or more children are considered large and are eligible for additional relief. Choice of declaration: Spouses can decide whether to file a separate or joint declaration. Senior citizen relief: If you are over 65 years old and working, you can get reductions double those of a normal worker. In summary, the Canary Islands' tax regime offers a business- and family-friendly environment, making it one of the most attractive destinations for those seeking investment opportunities and quality living. 🌴💼🏡

One of the main reasons people choose to move to the Canary Islands is the favorable tax regime. Here are some key points: Tax residency: In order to benefit from the tax benefits, you must obtain tax residency in the Canary Islands. This status allows you to enjoy reduced tax rates and other benefits. IRPEF rates: Personal Income Tax (IRPEF) in Canaries is levied at proportional rates. For example: 0% for basic consumer goods such as energy, water and telephony. 2% for goods. 5% for services. 13.5% for luxury goods. 2. Business benefits Canary Islands offers significant benefits for businesses: IGIC: The Canary Indirect General Tax (IGIC) is the local equivalent of VAT. IGIC stands at 7 percent for domestic transactions. This reduced rate is an incentive for companies operating in the archipelago. ZEC: The Zona Especial Canaria (ZEC) is a special economic zone that offers even more advantageous tax conditions. Businesses registered in the ZEC can benefit from total exemption from IGIC and other taxes for a period of 10 years. 3. Concessions for Families Families can also take advantage of the Canary Islands tax regime: Children's Relief: Families with children can benefit from reliefs based on the number of children and their age. For example, families with 3 or more children are eligible for additional relief. Choice of declaration: Spouses can decide whether to file a separate or joint declaration. Conclusion In summary, the Canary Islands tax regime offers a favorable environment for business, families, and those seeking a quality life in a paradisiacal setting. Before making important decisions, it is always advisable to consult an experienced tax advisor to evaluate options and plan appropriately. 🌴💼🏡 : The Canary Islands tax regime in 2020 | In the Canary Islands : How the IRPEF works in the Canary Islands - In the Canary Islands: On vacation or for ... : RIC and ZEC: Canary Islands tax advantages - Fiscomania : Moving abroad: taxation in the Canary Islands - Invest Hero : Canary Islands tax regime: let's find out together! Student Study.

Canary Islands: a world of opportunities, for you and your business!