The Canary Islands archipelago is made up of seven major islands, all of which are of volcanic origin, located off the coast of West Africa and at a distance of some 1100 kilometres from the Spanish Mainland. The Canary Islands are divided into two Provinces, Las Palmas, comprising Gran Canaria, Lanzarote and Fuerteventura, and Santa Cruz de Tenerife, which includes Tenerife, La Palma, La Gomera and El Hierro. The region has as its twin capitals the cities of Las Palmas de Gran Canaria and Santa Cruz de Tenerife.
The Islands' strategic location enables residents to enjoy an enviable quality of life, in an exceptional climate (the average year round temperature varies between a maximum of 24°C and a minimum of 15°C) and a unique natural environment. The profuse and varied plant life of The Islands and the beauty of the landscapes are two of the most attractive features, making the Canary Islands not only the favourite holiday destination for the citizens of the European Union but no less a superb place of residence in that they make possible the perfect combination of business activity with superb leisure options.
2. A STABLE POLITICAL FRAMEWORK
The Autonomous Community of the Canary Islands was officially established on 16th August, 1982, the date on which its Statute of Autonomy came into effect. Its power to manage health and education services within its territory make this one of the Autonomous Communities with the greatest level of devolution in Spain.
The budgetary dynamics of the Canary Islands Government is characterised by a noteworthy capacity to generate savings, which has enabled it to put in place an active investment policy without generating financial tensions. The highly satisfactory public finance situation is guaranteed by international financial bodies. It is worth pointing out that the most prestigious international rating agencies have given the creditworthiness of the debt of the Canarian Autonomous Community in foreign currency the same status as that of the Kingdom of Spain (the maximum that can be achieved by an Autonomous Community).
3. FAVOURABLE GEO-STRATEGY LOCATION
The Canary Islands are Europe's southern frontier.
The Canary Islands have traditionally looked out at the African and Latin American markets and are therefore an excellent trading platform for north-south exchanges as they sit astride the major international trading routes. This special geo-strategic position favours the establishment of centres of business and financial operations, capital transfers, technology transfer and the exchange of services.
Our region is located in area of great dynamism since the Canary Islands are fully integrated in the economy of the European Union and at the same time are the natural point of entry for products from northern countries to the markets of the countries of the south, which are destined to enjoy spectacular growth in goods and services in the new century.
4. LOCAL MARKET IN CONTINUOUS GROWTH
The census has recorded the population of the Canary Islands Autonomous Community as 1,894,868 inhabitants in a total area of 7,447 Km². This is therefore one of the most densely populated regions in Spain. If to this we add the high percentage occupancy of tourist accommodation throughout the year, which reached a figure for the year 2003 of 12,416,635 the potential market for companies established in the Canaries is much larger than that of other Autonomous Communities. Moreover, there is great concentration of the population in and around the main cities and, more generally, on the two metropolitan islands.
The economic growth that the Canary Islands have experienced over the last few years easily outstrips the process of expansion in other regions of the European Union, as is shown by a study of the main macro-economic variables for the year 2002. For example, the GDP of the Canary Islands grew by 1.9%, a figure which is close to the Spanish average of 2.0%, and is far above the European average, at only 1.0%. This indicates a market made up of consumers with great purchasing power.
The Canary Islands have a relatively young population pyramid in comparison with other Autonomous Communities. This is explained by the high birth rate, causing significant vegetative growth. While in the rest of Spain, the population under thirty years of age represents 36.80% of the total, in the Canaries the equivalent figure is 41.04%.
This young population is trained in an extensive network of primary and secondary schools, as well as two publicly-owned universities, with more than 46,000 matriculated students in the year 2003, approximately one third of whom are studying technical subjects such as engineering or computer science.
The Islands also offer, apart from advanced technology, leading edge scientific facilities and numerous applied research centres of excellence, considerable training potential through publicly-funded programmes adapted to the specific needs of business.
There are likewise vocational training centres which combine instruction in both traditional crafts and new technologies.
Professional preparation stands out in the advanced industrial and service sectors, particularly in such promising areas as biotechnology, robotics, telematics, food and marine technology, environmental management, wind energy etc.
There are also a large number of bi-lingual schools, and the use of both English and German is widespread, although the official language is Spanish.
6. EXCELLENT SERVICE AND COMMUNICATIONS INFRAESTRUCTURE
Thanks to their location and geographical disposition, the Canary Islands have significant air and sea infrastructure, which together with land transportation, ensures rapid and efficient transfer of goods and passengers.
There is an extensive network of commercial and fishing ports, as well as yachting marinas, in the Canaries. These ports are among the leaders in Spain in terms of tonnage of goods and numbers of passengers, making this an obligatory port of call for goods in transit to or from Europe, America and Africa. The Islands are also a highly strategic point for supplying and repair of ships in the Atlantic.
The six international airports in the Canary Islands have registered the greatest growth in both flights and passengers of any airport in Spain and have sufficient capacity to receive over twenty-five million passengers a year. The many ports and airports undergo a continuous process of modernisation and extension which keeps them in their leading position in Spain in terms of traffic and quality of services.
It is also worth remembering that the Canaries are the place of convergence of the largest number of underwater cables anywhere in the world, which ensures excellent communications with Europe, Africa and America. Various international telecommunications companies operate in The Islands, where they enjoy a high level of deregulation and advanced information transfer technologies. As regards mobile telephony, there is now total GSM cover, with some 60% of the population owning a mobile phone. The telecommunications operators present in The Islands offer cable services such as ADSL technology ensuring high-speed internet connections.
7. LEADING EDGE TECHNOLOGICAL RESEARCH
The Canary Islands are the Spanish region which has most increased its spending on Research and Development over the last few years. Most of this spending has gone to the two Canarian universities and to Public Research Organisations, attached to the Autonomous and central administrations.
Among these university centres and public research organisations, it is indispensable to mention the following:
The Technological Institute of the Canary Islands, which concentrates above
all on three fields: technological services, research and development and
energy management.
The Canary Islands Astrophysical Institute, an internationalised Spanish
research centre, which constitutes the European Northern Observatory.
The University Institute of Applied Microelectronics, attached to the University
of Las Palmas de Gran Canaria.
The Canary Islands Institute of Marine Sciences, whose work is focussed
on fishing technology, marine agriculture, the marine environment, etc.
The Canary Islands Government, being aware of the economic and social importance of Information and Communications Technologies, is drawing up a Plan for the Development of the Information Society in the Canary Islands, in accordance with the existing guidelines for the period 2000-2006, within the framework of the Plan for the Development of the Canary Islands and the Plan for Infrastructure in the Canaries.
8. REDUCED FISCAL BURDEN
The Canary Islands have historically enjoyed special economic and fiscal arrangements for the purpose of compensating for their remoteness and the problems associated with being an archipelago.
Spain's membership of the European Union has led to modernisation of this special economic status, which is reflected in the new Economic and Fiscal Regime of the Canary Islands (REF), which lays down exceptional conditions for the islands in order to foment trade and investment, since, although all European Union policies are applicable to The Islands, the geographical situation of The Islands enables them to benefit from a number of highly favourable exceptions and modulations in the application of European Law.
The Fiscal and Economic Regime (REF) contains a number of fiscal incentives in relation to the creation and conduct of business activity, which are contained in Spanish law and are authorised by the institutions of the European Union. Among these incentives, the most important is the Canary Islands Special Zone, within which a corporation tax rate of between 1% and 5% is payable, which makes this Autonomous Community not only an ideal holiday destination but also a highly attractive tax area for investment.
As a further component of the Fiscal and Economic Regime (REF), there are Free Port areas where goods can be stored, processed and distributed without application of duties and indirect taxes. Those companies established in the free port areas of the Canary Islands, can also take advantage of the full range of benefits offered by the Fiscal and Economic Regime (REF).
It must finally be mentioned that the Canary Islands are an integral part of the European Customs Area, even though VAT and other special taxes existing in the European Union are not applicable in The Islands. The Canary Island General Indirect Tax (IGIC), which substitutes the communitarian VAT, taxes final consumption and it present additional advantages like lesser type of taxation. Its general rate is 5%.
9. PRIORITY RECIPIENT OF EUROPEAN AND SPANISH FUNDS
The sources of European financing of which the Canary Islands Autonomous Community is a recipient include the Structural and Cohesion Funds, the principal instruments of regional and cohesion policy of the EU.
The Canary Islands, classified as an Objective One region, enjoy privileged access to the Union's structural funds. The special characteristics of outlying regions such as the Canaries, have given rise to a specific and targeted European initiatives from which the Canary Islands now benefit.
All of these actions make clear the importance of European Union initiatives within the Regional Development Programme, making the Canary Islands the Autonomous Community which has received the most financial resources from the EU to reduce internal differences.
10. EXTENSIVE REPRESENTATION OF FINANCIAL INSTITUTIONS
Most Spanish banks are represented in the Canary Islands as well as the most important overseas institutions. Some forty banking institutions operate a structure of approximately 1,100 branches. The role of the Cajas de Ahorro (Savings Banks) is also worthy of mention. They are institutions which enjoy great respect among all sectors of the Canarian population, and have a significant market share of credits and deposits.
It should be mentioned that the Canary Islands are the Spanish region with the highest per capita rate of savings, which leads to greater liquidity and availability of capital for financial institutions when providing loans.
Owing to the significant growth of the Canarian economy, which has generated a high level of profits for business, there has been a change of mentality in the smaller investor, which has led him to search out alternatives for his savings in products with greater liquidity which also permit a fiscal saving to be made, or investment on the stock exchange, as a way of achieving greater returns although with some risk attached, bringing the Canary Islands ever more closely into line with the most highly developed countries.
