Why So Many Foreign-Funded Companies Choose the Canary Islands — and What Kind of Businesses Thrive Under ZEC

Spain is not often seen as a tax-friendly destination, but there’s one region that stands out as a powerful exception: the Canary Islands. And more specifically, the Zona Especial Canaria (ZEC), a low-tax regime that continues to attract a rising number of foreign-funded companies, particularly in the tech, ecommerce, and digital services sectors.

If you’re an expat or digital entrepreneur looking to scale in Spain while optimizing your tax burden, understanding the ZEC regime could be a game-changer.

What Is the ZEC (Zona Especial Canaria)?

The ZEC is a special tax regime created by the Spanish government and approved by the EU, designed to promote economic development in the Canary Islands. Companies registered under the ZEC benefit from:

• A reduced Corporate Tax rate of 4% (compared to 25% general rate in Spain)

• Exemption from IGIC (Canary Islands VAT equivalent)

• Reduced taxation on dividends and capital gains

• Full compatibility with EU directives and the Spanish tax system

  
  

To qualify, a company must meet certain requirements (including a minimum investment, job creation, and operating within an eligible sector), but for many expat-owned businesses, the advantages far outweigh the compliance steps.

Which Industries Are Most Common Among ZEC Companies?

According to data from ZEC and Canary Islands government reports, the most frequent types of companies benefiting from this regime include:

• Software development and IT services

• Ecommerce and digital marketplaces

• Online marketing and advertising agencies

• Financial technology (fintech)

• Audiovisual production and media companies

• Shared services and outsourcing centers

• Logistics and supply chain management firms (especially in ecommerce)

  
  

These industries align well with the digital economy and remote-first operations, which is why so many international entrepreneurs choose to set up their businesses under the ZEC.

Where Do These Companies Come From?

Foreign-owned companies in the ZEC typically originate from:

• 🇩🇪 Germany

• 🇳🇱 The Netherlands

• 🇬🇧 United Kingdom

• 🇺🇸 United States

• 🇸🇪 Sweden

• 🇨🇭 Switzerland

• 🇫🇷 France

  
  

This strong international presence has made the Canary Islands, especially Tenerife and Gran Canaria, a hub for tech-driven, global-facing businesses seeking favorable tax solutions within the EU.

Why This Matters for Expats Running Online Businesses in Spain

If you’re running an ecommerce or digital services company and you're an expat living in Spain, you may already be struggling to find:

• English-speaking accountants in Spain

• Advisors who understand both international business and Spanish tax law

• Systems that integrate your digital tools (Shopify, Stripe, etc.) with real-time accounting

That’s where we come in.

We specialize in helping foreign entrepreneurs and expat business owners manage their accounting, optimize their tax structure, and, when it comes to the ZEC regime, we collaborate directly with highly specialized Canarian accountants based in La Laguna, through our trusted partners at Weeks Asesores, experts in ZEC compliance and corporate structuring. Together, we combine strategic tax planning with modern tools like Holded, which connects directly to the Spanish tax system, giving you full financial visibility and control.

Ready to Explore If the ZEC Is Right for Your Business?

Whether you're already operating in Spain or planning to relocate, we can help you evaluate whether your company qualifies for the ZEC regime, and what that could mean for your tax planning.

Book a free consultation today to discover the best path forward for your ecommerce or digital business.

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