Why Tenerife is a good destination to invest
Tenerife is the largest and most populated city of the Canary Islands. Currently the demand for investment in this city has been high, in part because tourism plays an important role in the development of its economy. The warm climate throughout the year and the relaxed lifestyle has also become one of the reasons why many people seek to make their investments in this place.
Are you thinking of making an investment but you are not sure if Tenerife is the destination for you? In this new article we show you some of the main reasons why Tenerife may be the place you are looking for.
Promote investment attraction
Regarding the tax area, Tenerife also enjoys the best tax regime thanks to the establishment of the ZEC (Canary Zone) with a corporate tax of 4%.
In 2021, the Canary Islands Special Zone began with an agenda to promote the attraction of investments in the islands in the midst of an adverse scenario. It is a time when the youth unemployment rate exceeds 60% and tourism is in a vegetative state due to the Covid19 health crisis.
The ZEC was authorized by the European Commission (EC) and regulated by Law 19/94 of July 6, 1994. It allows Companies to pay up to 4% as long as employment is generated on the islands. The president of the ZEC points out that the low tax platform is the fundamental tool for the diversification, revitalization and internationalization of the Canarian economy.
Rise of the business sector
As established, ZEC companies return 3.5 euros for every euro they receive. In 2019, the ZEC closed with an increase of 33 percent in registered companies and 13% in authorized business projects, with a committed investment of more than 1,964 million euros.
In the official registry of entities of the Canary Islands Special Zone, it was reported that during 2019 there were 656 registered companies, which have committed to creating 9,778 jobs and investing 1,076 million euros in the Canary Islands. The number of companies registered in the ZEC has increased since 2014, so that there has been an increase of 44%, and in terms of authorized projects there are also constant annual increases.
The largest increase occurred in the companies registered in 2019, so that the 114 entities incorporated into the registry represent an increase of 33% compared to the previous year. These companies committed to the creation of 1,398 jobs and an investment of 98.8 million euros.
Almost 70 per cent of these companies carry out service activities. 58 percent of the capital is from abroad, especially from the European Union, and comes from 28 countries, among which last year those of Italian origin stood out, followed by the Germans and those of the United Kingdom.
The increase in business projects
The number of authorizations also increased, so that during 2019, 163 business projects were authorized, 13% compared to 2018, and these projects were committed to generating 2,392 jobs and investing 1,964,052,703 euros (a figure that exceeds the accumulated investment recorded by the ZEC).
The industrial sector represents 20% of the projects captured (1% more than the previous year), which contrasts with a certain stagnation in regional terms and reinforces the countercyclical nature of this tool. The remaining 11% corresponds to trade and distribution projects.