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Duration:
2000-2006 for the setting up of the qualifying enterprises and two
additional years until 2008 to avail of the fiscal incentives.
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The
objectives include the attraction of investment, employment creation
and development and diversification of the Canary Islands economy
generally.
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Taxation
levels will vary between 1% and 5% depending on the type of activity
involved and the level of employment created. Additional special
reductions will be granted where the proposed activity is one that
doesn’t already exist in the islands.
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A
minimum investment of 16.6MP or 100,000 Euros will be a precondition
together with a minimum job creation of five (for each qualifying
enterprise).
Generally
there will be three categories of beneficiaries, industrial, services
and services with low employment levels; specifically wholesale, legal
and accountancy consulting, travel agencies, information technology
& public relations. The Islands have had a relatively strong case to
make because of their peripherality, insularity and general infrastructural
underdevelopment. Indeed, because of the foregoing, the Islands currently
enjoy a ”vat
free” regime. Instead there is a sales tax generally at a flat
rate of 5%. Undoubtedly the above package will generate enormous investment
inflows to Tenerife and the islands generally. Perhaps the most recent
proven fragility of the international monetary system, the uncertainties
created by the Euro, the current, arguably, scary levels of stock exchanges
may direct the vast bodies of investment funds currently sloshing around
the world towards “bricks and mortar”! The main thrust
of the above argument is that the outlook for inward investment looks
very good for the Canary Islands. The implications for property are
evident and exciting.
