The Canary Islands Special Zone (ZEC)

The Canary Islands Special Zone (ZEC) is a low tax zone created within the framework of the Canary
Islands Economic and Tax Regime (REF) for the promotion of the economic and social development of the Islands and to diversify their production structure. ZEC was authorized by the European Commission in January 2000 and it is regulated in the Law number 19/94 of the 6th of July, 1994.

ZEC Entities are subject to the Corporate Income Tax in force in Spain, at the reduced rate of 4%. Dividends paid by ZEC subsidiaries to parent companies resident in another country as well as the interest and other income from transfers to
third parties of capital and capital gains from property, obtained without a permanent establishment are exempt from withholding. In general terms, any entity or branch which intends to carry out an industrial, commercial or service activity included in the list of authorized activities can establish in ZEC.