British and Italian start-ups settle in the Canary Islands attracted by its young talent, climate and ZEC tax advantages

Gran Canaria, Lanzarote, Tenerife and Canary Islands in general offer opportunities to an incredible range of different start-ups and industries. From creative and cultural start-ups, to those related to the digital economy, the port-maritime sector, clima & energy or the blue economy, British and Italian start-ups settle in the Canary Islands attracted by its young talent, climate and ZEC tax advantages

As a leading international tourist destination, receiving almost 10 million tourists a year, Canary Islands are gradually recovering the nearly 15 million in the stage before the pandemic. With a tremendous natural value, these atlantic islands offer equally interesting possibilities as an innovation lab and test bed for new technologies and business models, as well as a place to welcome digital nomads.

Canary Islands offer attractive conditions for foreign investment, with a large skilled workforce, part of an active and growing start-ups ecosystem in a mature and developed market that offers privileged access to European and emerging markets in Latin America & West Africa, thanks to its geographical location, excellent infrastructure, good physical and digital connectivity, advantageous tax rates, and competitive costs, in a stable and low-risk European environment.

For instance, Gran Canaria has become an international magnet for international ventures, companies, professionals and talent. When you choose Gran Canaria, not only are you opting for an ideal work & life balance, you are also choosing a global, well-connected, safe, stable and welcoming island.

Based on a consistent political, legislative and social stability and a high standard of services and infrastructures, Gran Canaria is the perfect place to set up a start-up and develop a profesional and personal career. Gran Canaria is a project accelerator on its own, a strategically-located operations base and a trusted test- bed for innovations and ideas. Quality of life and the World’s best climate come included in this unique deal.

Italians come for the climate and low taxes

Of the 73,033 born in Italy that Spain has won in the last ten years, 21,676 have gone to the Canary Islands, about a third of the total. The barrage becomes much more evident if we put the magnifying glass on each region. Of the ten municipalities with more than 1,000 inhabitants with the highest percentage of Italians, eight are from the Canary Islands. La Oliva (16.8%), Adeje (11%), Antigua (9.8%) and Arona (8.6%) are the first four. All of them belonging to the Canaries.

49,879 Italians reside in the Canary Islands, a rate of 23 per 1,000 inhabitants, the highest figure in all of Spain and far above the national average (5.77). There is space for young people, especially for the Erasmus programs, in which Spain stands out as the first destination for Italian university students.

New Sart-ups Act hopes to make Spain one of the most attractive destinations for digital business

The Spanish Government has passed a bill to encourage an ecosystem for new companies, better known as the Startups Act, and by which it hopes to make Spain one of the most attractive destinations for investment, talent, and innovative entrepreneurs. 

The document includes significant tax breaks, eliminates red tape and makes procedures more flexible to encourage the creation of and investment in tech startups. It also includes important initiatives to attract and bring back international and Spanish talent, encouraging “digital nomads” - those entrepreneurs and remote workers who can live and work anywhere - to settle in Spain. 

These people will have the opportunity to live and work in Spain for 5 years and benefit from a special tax system by paying non-resident income tax. To attract Spanish talent back to the country, the usual requirements for this system have been relaxed (with the period of previous non-residence in Spain cut from 10 to 5 years).

The Startups Act is one of the milestones set out in the Recovery, Transformation and Resilience Plan. This bill will make Spain one of the most attractive countries in Europe for investment, entrepreneurship and talent. It also complies with the recently established EU Startup Nations Standard: a set of practices designed to foster an entrepreneurial spirit in the European Union and encourage the creation of innovative new companies by establishing the right conditions for them to grow.

This bill is accompanied by several different measures introduced by the Government to encourage the financing of these types of companies in Spain, including Fond-ICO Next Tech, which aims to mobilise investment totalling 4 billion euros and provide financial support for growing companies.

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. 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, where digital start-ups have a very special place.

The Canary Islands is one of the fastest growing region of Spain in attracting technological talent, and offers incredible opportunities to innovate in maritime and renewable energy industries, through initiatives such as Impulsa Ventures, startu-ps studio recently created under the auspices of entities such as Fundación Emprende Canarias and several companies in the technology sector.