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The ZEC Zone

YOUR WINDOW TO THE BEST TAX REGIME IN THE WORLD

All you need to Know About The ZEC Zone (10 minute read)

Chapter One

What Is The ZEC Zone ?

The CANARY ISLANDS, (Spain) also known as Europe’s south tip are composed by 8 sub-tropical islands located in the Atlantic Ocean, approximately 300 km (186 mi) from the African coasts. with a combined population of over 2,000,000. The islands consisting in size order: Tenerife, Fuerteventura, Gran Canaria, Lanzarote, La Palma, La Gomera, El Hierro and La Graciosa.

Tenerife and Gran Canaria acts as the main hub for startups, entrepreneurs and SMEs. Traditionally known as a popular tourist destinations especially for Europeans. The islands are transforming into a bustling business community. Although the Canary Islands fall under Spanish, and thus EU jurisdiction, agreements with the European Comission (which have been quietly nurturing startups for almost two decades) have allowed the ZEC to be formed and the islands to boom and companies to flourish. The European Commission authorized in 2000 a special tax regime for the Canary Islands (This Special Tax Regime is known as the ZEC Zone), now extended until year 2026. The current tax regime offers what can be considered the most attractive tax environment for companies carrying out business practices included in the official list of authorized activites by the ZEC.
Videogames and Esports are part of the authorized list of activities that can benefit from the ZEC regime.

The Canary Islands offer attractive conditions for foreign investment: a large and qualified workforce; an active and constantly growing economic and social system; a consolidated market with the highest levels of development, as well as a privileged access - thanks to its geographical position - the island also boasts first-class infrastructure (ports, airports, highways, technology-business parks); excellent digital, air and maritime connectivity; a tax regime with important benefits compared to the rest of the Spanish, European and worldwide territories, in addition to very competitive costs. And, all this in a safe, stable, and low risk environment. Simply put, pound for pound the ZEC Zone cannot be beat.


Chapter Two

Advantages of The ZEC

The ZEC captures the best elements of Europe, with the beautiful stable sub-tropical climate and incredibly reasonable operational costs. Companies who are looking into setting up or working within the ZEC (Remotely or Relocating) would be naive to ignore the importance and value of developing a business within these Island chains. The ZEC Zone is NOT designed to be an Offshore Tax Haven to hide, deceive or cheat the Tax-Man. The ZEC Zone Is a safe, legal and highly regulated Onshore business site, with a set of favourable conditions that makes it the best TAX Regime in the world for serious companies. Below are just a couple of examples that show the sheer differences between central Europe and the ZEC´s Taxation Regime.

The Canary Islands ZEC boast the best Taxation Regime in Europe, but thats not the only thing.

  • Maximum Legal Guarantee. Fully integrated in Europe´s legal system. The Canary Islands offer a total guarantee in security and protection to individuals and companies. Data protection/Free Market/Financial regulation
  • The Canary Islands are familiar With All The International Anticorruption Measures, also outside Europe (FCPA Due Diligence’s Compliance with the EEUU).
  • Spain has Double Taxation and information exchange agreements with EU/EEUU/Canada/Australia/China/Russia. Expatriate your dividends without any retentions.
  • Low Living And Operational Costs. Office rent in Canary Islands is among the cheapest in Europe at 15€ per meter square-(10.7 aquare foot). Petrol is 0.95€/1.05$ per liter (the cheapest in all Europe). Rent an apartment (1 bedroom) in City Centre 590€/month
  • Advance Telecomunications. Subamarine fiber-optic cable connections. 50 Satellites. Competitive internet speed. The main telecommunication companies in Spain operate in the Canary Islands.
Canary Islands Is All-Business without forgetting about the fun and practicality. Hosting all the modern infrastructures you will ever need for your business and living needs. Along with an average year round temperature of "22ºC/72 Fahrenheit", 4800 natural light hours/year and 159 Miles of Beaches .

Chapter Three

Requirements Of The ZEC- Calculate Your Savings

Setting up a company in the ZEC Zone entail some basic requirements, including a little bit of administrative work, however the paperwork and costs associated will MORE than pay for themselves once the ZEC entity is set up. If you are tempted by the multitude of advantages listed in the chapter above, then becoming a ZEC entity is definitely for you. The ZEC was created to encourage, attract and grow international businesses in the Canary Islands not to make barriers to entry. The local government and authorities are always very supportive towards applicants looking to become a ZEC company.

  • Your entity must be newly created that is physically headquartered (office) in the Canary Islands
  • A minimum of one of the administrators must live in the Canary Islands (Or a legal representative in case of a subsidiary). Having the choice to operate your ZEC entity remotely without having to relocate with our help.
  • Investing a minimum of €100,000 Euros in fixed assets related to business activities within a flexible period of time of two years. (With Options for CYCLONE to invest this capital for you).
  • Create 5 new jobs within 6 months of authorization and hold at least this average for the duration of your ZEC registration. "New Jobs" comprise all of the following scenarios:
    --- 1)Already contracted personnel currently working in your home-country company which relocate.
    --- 2)Newly Hired employees from anywhere in the world relocated to The Canary Islands.
    --- 3) Newly Hired local employees.
  • In the event of relocating personnel, they need to live at least 6 months per year in the Canary Islands (183 days), this time can be distributed in any way.
    Don’t be dissuaded by the the requirements. CYCLONE offers personalized long-term partnership with a hand-on approach and the answer to all your questions. Our agency will provide everything you need to make sure you feel confident and comfortable managing your ZEC entity remotely or as relocating from your country. Our business model dont involve fees, upfront payments or hidden costs. (Lets findout how much you can actually save below).

    CYCLONE + ZEC zone. How much can you actually save ?

    NET Saving Calculator    

  • STEP 1) Select Your Country (Corporate Tax %)
    STEP 2) What is your yearly company TAX BASE ?
    Total amount of assets and/or revenue that your government will tax
    STEP 3) ZEC Investment    []
    Capital Invested/Fixed Assets
    STEP 4)Would You Be Relocating Personnel ?  []
    NOYES
    STEP 5) Employees In The ZEC Zone   []
    NEWLY hired employees and their average monthly salary (per employee)
    €/

    NET PROFIT: 0 €/Year
    +0€ Investment/Fixed assets
    Total value: 0 €

    Corporate Tax Paid in Your Country 0 €/Year
    Corporate Taxes Paid In ZEC(4%) + CYCLONE Share(2%) 0 €/Year
    DEDUCTIBLES
    ZEC Invesment/Fixed Assets 0 €
    +
    New Employees (Costs Per Year) 0 €
    -------------------------------------------------------------------------------------


    Hide/Show BreakDown

    Any company with a TAX BASE of 750.000€ or more per year located in a country with a standard 20-30% Corporate Tax would simply be making money by saving money while potentially increasing their workforce with new employees. To some, the employment requirements represent the opportunity to expand their company team size and/or start a new project, it might also be a chance to re-inforce other aspects of their business (Marketing/Social Media/Audiovisual production/finances/coding/art.) meanwhile their businesses continues to save Money in the overall year balance thanks to the 4% Corporate Tax and other benefits. The conception of a larger team and saving considerably money all at the same may seem unfathomable, but today thats a reality. Our Model is built around the premise of assuring that your company will always be in the green by saving a clean NET 9-22% of your TAX BASE yearly (even after Including our Share). We custom taylor a proposal in a client to client basis. More about this in the following chapter.

    Chapter Four

    CYCLONE Partnership Advantages

    We have already covered what is the ZEC zone, Its location and why you should be interested by now. Additionally Imagine having a Battle-Tested Business Partner to assist you with the whole process of not just of Incorporating and maintaining your new entity in the ZEC, but all natural necessities that should arise from relocation or remote managing. We understand that the idea of opening a company in another country might sound challenging or even intimidating. Fear not, our purpose is to be your support center and oversee a smooth crossing throughout all of your time working in the ZEC, making sure with our hands-on approach that your Company status, Your Assets and Your Employees are being looked out for with utmost care.

    Our Array Of Solutions.

  • We handle Business Creation,Incorporation and Maintainance of Matrix companies and Subsidiaries in the ZEC (With Legal Representation).
  • Remote management assistance and reporting. We shedule weekly reports of your studio´s status and progress (We organize Guided Tours Of The ZEC for physical visits).
  • We search, Negotiate and Hire new talent that closely fits your budget and especification (local or internationally).
  • Full assistance relocating and helping with the integration of newly hired personnel, or relocating already contracted employees from your home-country business. (24/7 Support On-site). Relocation paperwork. Assistance with insurances: Medical,Vehicle,House. Assistance Opening a bank account. Finding and negotiating living space rent and mortgage.
  • Accounting, Legal services, Finding and negotiating premium office/land space and others.
  • Investing/Consulting.
    Our partnership model is straight forward. In exchange for covering all your necessities (at no added cost) so you can comfortably establish a new entity in the ZEC, we are looking to enter into a Share Revenue agreement in which CYCLONE takes a minor share revenue that will be based upon the Corporate TAX paid yearly. This share revenue percentage ranges anywhere from 1.5% to 4%. In Conclution working from the ZEC zone with all yours needs covered will be as if you are paying a total of 5.5%-8% in Corporate Taxes(4% from the ZEC Zone and 1.5%-4% for CYCLONE) instead of your country's standard 20-30%. With this partnership model we are always making sure your company is saving considerable money in the ZEC, versus if you were operating from your country. (Make Sure To Try Our Saving Calculator Above.)

    Why Open A Company In The Canaries With CYCLONE´S Assistance ?

    • Save a NET 9-22% in Corporate Tax
    • All solutions in one place at no added cost.
    • Prepared group of Financial and Gaming veterans. 13 people strong.
    • Operate your ZEC company remotely or relocate to the Canaries.
    • Top Of The Line Legal And Accounting Coverage.
    • Canaries VAT rate is 7% instead of European 21% VAT Average.
    • No Restrictions in the free movement of capital, No withholding Tax.
    • Spain has exchange of information worldwide and Double taxation conventions with EU and US (Expatriate your earnings safely and legally).

    6M$+

    Saved in taxes between 2017-2019

  • Chapter Five

    Frequently Asked Questions

    Is the ZEC Zone a Tax Haven ?

    The ZEC is Not a Tax Haven. It's easy to argue Tax Incentives in other jurisdictions are unethical (and in some countries considered illegal to own), at the very least they're abused. When you can open a company without actually conducting actual business from that country, have no tangible physical presence in terms of employees or actual services being rendered, it's understandable why people have an issue with the ethics surrounding offshore. The Canary Islands Tax Incentives, however, are completely unique due to the fact they're onshore and linked to both social and economic requirements. ZEC Companies must adhere to the qulifying criteria, which is directly linked to investment and exployment, making it the most trasparent, secure and law binding Tax Incentive regime in the EU and giving certainty to the business owners using the incentive. This ensures people cannot cheat the system, more importantly it provides additional comfort and security for the owners of companies utilising the benefit. Real Tax Incentives for Real Businesses. No Shell Companies and No need to hide your revenue, and at the end of the day THAT is what you should be looking to get.

    Should I open A Matrix company or a Subsidiary ?

    Technically speaking there are no specific advantages/disadvantages, companies in the ZEC Zone are all treated the same way. It all depends on your individual situation and intentions. Subsidiaries are the most common form. Get in touch with us so we can assist you in the matter.

    Does my Country has an agreement to transparently operate in the ZEC Zone ?

    The ZEC Zone is part of Spain and as such its subjected to its tax laws. Spain has information exchange and double taxation agreement with most countries in the world that will allow you to expatriate your dividends. Check the following Link from the official Spanish Tax agency to findout if your country is included.

    Link

    Does it cost money to work with CYCLONE ?

    No. Our business model is based around a partnership in which we provide all the necessary means to make the ZEC your new business home and assist with relocation necessary, in exchange we take a minor share. All partners have to do is comply with the ZEC Zone agreement (Which we can also assist with).

    Does CYCLONE cover the investment amount, employees salaries and/or all of the other necessary costs to fulfill the ZEC requirements ?

    CYCLONE covers everything else outside the basic requirements (100.000€ and employee burn rate). However there isnt a set formulae for our agreements, so we are also open to cover integration and operational costs.

    Does CYCLONE offers paid services instead of a Partnership ?

    We carefully select which companies we partner with. We dont see ourselves as a disassociated service provider in exchange for a standard payment. We are looking to enhance and fully dedicate ourselves to our partners so we limit the amount of companies we support to a sustainable number.

    How long does it takes to setup a company in the ZEC Zone ?

    There is some planning and paperwork to take care of, usually it ranges from 1-2 months to get your company running in the ZEC zone. Although timeframe might slightly vary the average is 40 days.

    Is this legal, how safe is it to work in the ZEC Zone ? How come I´ve never heard about it before ?

    Absolutely the ZEC Zone is backed and supported by the spanish government and the European Commission to promote business growth in Canary Islands by attracting international companies and creating wealth. Jokingly it is said to be Europe best kept secret, there is a sizeable amount of multi-national companies which are silently migrating to the ZEC Zone and enjoying all their benefits. You can always come visit and see for yourself. Visit the official ZEC website

    Here https://canariaszec.com

    How much can I Save In The ZEC Zone ?

    You can use our calculator above (Chapter 3) To Findout, or just send us a message and we will breakdown the savings.

    Interested ?

    Lets elevate your business.

    The ZEC Zone is one step away. Get In Touch.

    MADRID

    CYCLONE CAPITAL
    Calle Hilarion Eslava 31,5
    Madrid
    (+34)672 767 246
    contact@cyclonecapital.gg

    TENERIFE

    CYCLONE AGENCY
    Calle Los Llanos 8
    Santa Cruz de Tenerife
    (+46)8 559 23 331
    contact@cyclonecapital.gg

    Partners

    Partners