ZEC for Latin American Companies:
Pay 4% Tax in Spain
Legal, EU-approved structure for companies from Venezuela, Colombia, Mexico, Argentina, Peru and Chile. Reduce your corporate tax from 30–35% to 4% — inside the European Union.
4%
Corporate tax (ZEC)
~31%
Average LatAm tax rate
90%
Max. profit deduction (RIC)
EU
Full legal certainty
Why Latin American Businesses Are Moving to the ZEC
Common challenges driving LatAm entrepreneurs to seek a European base
High corporate tax rates
Venezuela 34%, Colombia 35%, Mexico 30%, Argentina 35%, Peru 29.5%, Chile 27% — all far above the ZEC's 4%.
Regulatory & political risk
Rules change with each election cycle. The ZEC is governed by Spanish law, approved by the EU and has been stable since 2000.
Currency exposure
Revenues in euros, inside the EU, free from capital controls. A Spanish IBAN separates European income from local restrictions.
Generational wealth transfer
Where Canary Islands rules apply, the inheritance and gift tax bill is reduced by 99.9% for spouses, descendants and ascendants (gifts must be made by public deed; arts. 24 ter and 26 sexies of Legislative Decree 1/2009) — dramatically better than most LatAm jurisdictions.
Your Country vs. ZEC: The Tax Difference
Calculated on €300,000 annual profit. All rates are nominal corporate income tax.
| Country | Rate | Tax on €300k | Savings vs ZEC |
|---|---|---|---|
| 🇻🇪 Venezuela | 34% | €102,000 | €90,000 |
| 🇨🇴 Colombia | 35% | €105,000 | €93,000 |
| 🇲🇽 Mexico | 30% | €90,000 | €78,000 |
| 🇦🇷 Argentina | 35% | €105,000 | €93,000 |
| 🇵🇪 Peru | 29.5% | €88,500 | €76,500 |
| 🇨🇱 Chile | 27% | €81,000 | €69,000 |
| 🇪🇸 ZEC Canary Islands | 4% | €12,000 | — baseline |
* Comparison based on nominal corporate income tax rates. Does not include local surcharges, withholding taxes or treaty effects.
From LatAm to ZEC: 5 Steps
You don't need to move to Spain. We handle everything remotely.
Initial consultation
We analyse your current structure, country of origin, tax situation and business model. We confirm ZEC eligibility and recommend the optimal structure.
Company incorporation (S.L.)
We incorporate the Spanish Sociedad Limitada, draft bylaws, obtain your NIF and open a corporate bank account. Done remotely via power of attorney.
ZEC Consortium registration
We submit the ZEC application with your business plan and investment commitment. By law, the Consortium must decide within two months of receiving the application (art. 41 of Law 19/1994).
Set up substance in Canary Islands
We help you find an office, recruit the required employees (5 in Gran Canaria or Tenerife, 3 on the other islands) and set up payroll, social security and IGIC registration — everything compliant from day one.
Ongoing compliance & tax planning
Annual accounts, quarterly IGIC returns, the annual ZEC registry fee, RIC planning and transfer pricing documentation. You focus on your business; we handle the admin.
Which Structure is Right for You?
We design the structure based on your current size, country and goals.
Direct ZEC Entity
Latin American founders create a new Spanish S.L. registered under ZEC. Simplest structure; once the company is registered as a ZEC entity, the 4% rate applies to the qualifying tax base.
- Incorporate Spanish S.L.
- Register with ZEC Consortium
- Hire 5+ employees locally (3+ on smaller islands)
- Invest €100k+ in assets (€50k+ on smaller islands)
Holding + ZEC Operative
A Spanish holding company (ETVE/S.L.) owns the ZEC subsidiary. Dividends flow up with 95% exemption. Ideal for wealth structuring.
- Create holding in Spain
- Create ZEC subsidiary
- Family protocol agreement
- Generational succession planning
ETVE Holding + ZEC + LatAm
The most complete structure: Spanish ETVE holding (95% dividend exemption) sits above ZEC operative + existing LatAm subsidiaries.
- ETVE holding Madrid/Canarias
- ZEC subsidiary Las Palmas
- Connect existing LatAm entities
- Optimize royalties & IP
ZEC Requirements
What your company needs to qualify for the 4% rate
Minimum investment
€100,000 in fixed assets (Gran Canaria / Tenerife), €50,000 in the other islands, within 2 years of ZEC registration.
Minimum employees
At least 5 jobs in Gran Canaria or Tenerife (3 on the other islands), created within 6 months of ZEC registration and maintained as an annual average.
Qualifying activity
Only the activities listed in the annex to Law 19/1994 qualify: IT and software, consulting, wholesale trade, logistics, manufacturing, audiovisual production and others. Financial services and retail trade are not on the list.
Canary Islands domicile
Registered address and genuine economic activity on the islands. No pure shell companies.
RIC: a further reduction of the tax base
The Canary Islands Investment Reserve (RIC) lets companies reduce their tax base by up to 90% of the undistributed profits they reinvest in the islands (art. 27 of Law 19/1994). ZEC benefits can be combined with other investment aid only within EU state-aid limits (art. 42.2), so the combined saving must be calculated case by case.
ZEC by Country of Origin
Specific considerations for each Latin American country
Venezuela
Current rate: 34%
Capital controls & currency risk
Colombia
Current rate: 35%
Wealth tax on high patrimony
Mexico
Current rate: 30%
Market diversification to Europe
Argentina
Current rate: 35%
Asset protection & currency risk
Peru
Current rate: 29.5%
Regulatory uncertainty
Chile
Current rate: 27%
European market entry
Frequently Asked Questions
Can a Latin American company access the ZEC without moving to Spain?
The shareholders do not need to move to Spain — you can remain in Venezuela, Colombia, Mexico or wherever you are. However, the ZEC company itself must have genuine economic substance in the Canary Islands: its registered office and place of effective management on the islands, at least 5 employees in Gran Canaria or Tenerife (3 on the other islands), and at least one director resident in the Canary Islands (art. 31.2 of Law 19/1994). We help you set up all of this.
Is the 4% rate legal? Is Spain on any tax haven blacklist?
Absolutely legal. The ZEC is authorised by the European Commission as a state aid measure compatible with EU law. Spain is not on any OECD or FATF blacklist. This is the same legal certainty as Irish or Dutch tax incentives, but with a lower rate.
How do dividends from the ZEC company reach shareholders in LatAm?
Dividends from a Spanish company to non-resident shareholders are governed by Spain's tax treaties. The treaties in force cap Spanish withholding tax on dividends at 0–10% for Venezuela, 0–5% for Colombia, 0–10% for Mexico, 10–15% for Argentina and 5–10% for Chile; the lower rate applies to corporate shareholders with a qualifying stake (from 10% to 25% of the capital, depending on the treaty). Whether a treaty applies, and at what rate, must be checked for each country and shareholder. In most cases you receive a tax credit in your home country for the Spanish withholding tax paid.
Does the ZEC help with capital controls (e.g. Venezuela, Argentina)?
The ZEC company is a Spanish entity with a Spanish IBAN. Profits earned and declared in Spain can be freely transferred within the EU without capital controls. While we cannot advise on the legality of exiting your home country's capital controls, a Spanish company legally separates European income from home-country restrictions.
Can we use the ZEC for cryptocurrency or digital assets?
It depends on the activity. A ZEC company may only carry out the activities listed in the annex to Law 19/1994 (art. 31.2.c). That list includes computer programming and IT consultancy, which covers blockchain software development, but it does not include financial services (NACE divisions 64 to 66). Whether a given crypto business fits one of the listed activities has to be checked against the annex, case by case, before applying. Separately, crypto-asset service providers need authorisation under MiCA (Regulation (EU) 2023/1114), which allows them to provide services across the EU.
What is the timeline and cost to set up a ZEC company?
By law, the Consortium must decide on the application within two months of receiving it (art. 41 of Law 19/1994); company incorporation and bank account opening come on top of that. We handle everything including company incorporation, ZEC Consortium registration, NIE/NIF application and bank account opening. Our fee for ZEC setup starts at €3,500 + IGIC (the Canary Islands indirect tax). Annual compliance (tax returns, the annual ZEC registry fee, accounting) is quoted separately. Your first consultation fee is deducted from our fees if you instruct us.
Explore More ZEC Resources
All the fundamentals answered for foreign investors.
Side-by-side comparison of Europe's best tax regimes.
Calculate your exact savings vs your home country.
In-depth analysis of European tax regimes (in Spanish).
What the law allows when both are applied, within state-aid limits.
Which crypto and blockchain activities fit the ZEC list, and MiCA licensing.
Ready to Get Started?
We advise Latin American entrepreneurs and family businesses on ZEC company formation, holding structures and generational wealth transfer. Your first consultation fee is deducted from our fees if you instruct us.