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
The Canary Islands offer up to 99.9% inheritance and gift tax exemption for direct heirs — 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.
Free 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. Authorisation takes 3–4 weeks from filing.
Set up substance in Canary Islands
We help you find an office, recruit the 3 required employees and set up payroll, social security and IGIC registration — everything compliant from day one.
Ongoing compliance & tax planning
Annual accounts, quarterly IGIC returns, ZEC renewal, 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, full 4% benefit from day one.
- Incorporate Spanish S.L.
- Register with ZEC Consortium
- Hire 3+ employees locally
- Invest €50k+ in assets
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 (100% 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
€50,000 in fixed assets (Gran Canaria / Tenerife) within 2 years of ZEC registration.
Minimum employees
At least 3 full-time employees with Spanish employment contracts within 6 months.
Qualifying activity
Technology, e-commerce, consulting, logistics, manufacturing, audiovisual, financial services and more.
Canary Islands domicile
Registered address and genuine economic activity on the islands. No pure shell companies.
RIC bonus: reduce your effective rate below 1%
The Canary Islands Investment Reserve (RIC) allows ZEC companies to deduct up to 90% of profits reinvested in the islands. Combined with the 4% ZEC rate, effective tax can fall to less than 0.5%.
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: a real office address, at least 3 employees with local contracts, and a director with authority to make decisions locally. 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. Spain has treaties with Venezuela (5–15% withholding), Colombia (0–5% withholding), Mexico (5–15%), Argentina (10–15%) and most other Latin American countries. 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?
Yes. Cryptocurrency trading, DeFi, NFT creation, blockchain software development and crypto mining all qualify for the ZEC at 4%. Spain is not on any crypto platform's blacklist and your ZEC company can obtain a CASP licence under MiCA (the EU crypto regulation) from the CNMV, valid across all 27 EU member states.
What is the timeline and cost to set up a ZEC company?
The full process typically takes 6–10 weeks. 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 + IVA. Annual compliance (tax returns, ZEC renewal, accounting) is quoted separately. First consultation is always free.
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).
The combination that achieves minimum effective taxation.
Crypto, DeFi, NFTs and MiCA licensing at 4% IS.
Ready to Get Started?
We advise Latin American entrepreneurs and family businesses on ZEC company formation, holding structures and generational wealth transfer. Free initial consultation — no obligation.