The Canary Islands
Lying off the south-west coast of Morocco, the Canary Islands are in fact the tips of a volcanic mountain range. The topography of the islands is incredibly varied, but all offer sun, sea and sand with the usual Spanish flare. Most popular is Gran Canaria followed by Tenerife, Lanzarote, Fuerteventura and a host of other seldom-visited isles. Much of Tenerife and Gran Canaria have surrendered to the influx of tourism along the south coast of the islands, the other Islands are less touristy but they all have one thing in common, they are perpetually warm, and the living is easy.
After a comfortable 4 hour flight from the UK, the average temperature upon landing will be a balmy 24C, feeling the sun on your face and the breeze in your hair as you exit the plane, it is strangely apparent that you have landed in a Tropical climate – but you are still in Europe. The weather is typically warm and moderate, ranging from around 18C – 24C in the winter, climbing steadily to a toasty 30˚C + during the summer months. Water temperature is 19˚C-22˚C all year-round, and is a deep blue-turquoise colour- a paradise for divers and water enthusiasts alike. In days of old there used to be very little rainfall on the islands, however in recent years, the rainfall has been very good in the winter months, which has made the farmers very happy. The Islands are the greenest that we have ever seen them. Some islands, particularly those which are very flat like Lanzarote and Fuerteventura are however, still quite arid. It can be cool at high altitude in winter though, about 10˚C if you can call this cool, so pack at least one warm wooly jumper with your beachwear.
As you wind your way from the airport to your hotel, apartment or villa, idyllic beach resorts and quiet rural retreats pass you by, usually not to be seen again until the morning of your journey back to the airport and your flight back home. While you are sunbathing on the beautiful sugar sand beaches of Gran Canaria / Fuerteventura, or roasting yourself to a fragrant oily medium rare on the black volcanic sands of Tenerife, the ‘real’ Canary Islands are secretly and quietly going about their business in the back ground. Staying in the tourist locations is the last thing that you should be doing, the islands are all beautiful in their own way and there is so much more to discover once you have retreated away from the huddled masses.
The old ‘Agrarian’ way of life is alive and well on the Canary Islands; ancient agricultural methods abound and thousands of local Canarian’s work as farmers or farm labourers on the Islands, with their growing number of crops (planted across around 520 sq km). They are responsible for a large amount of the GDP (gross domestic product) on several of the islands. Fruit plantations growing bananas, lemons and limes, and a fascinating variety of orange and tangerine fields are randomly dotted around the landscape. The unique tropical weather allows for a bountiful harvest of fruit and vegetables all year round. New crops such as grapes, tomato, avocados, tropical fruits and flowers are contributing to a modern farming mini-boom.
Is a medium sized contributor to the economy of the Canary Islands these days; but the Canaries are Spain’s second most important fishing grounds. The water is clean and deep off shore, although the days of legendary Tuna catches are long gone, scuba divers still report seeing the odd, yellow – blue streak making its way to the coast of the Americas. Unlike the Mediterranean which is almost fished out and devoid of its once healthy stock of sweet fish, the Canary Islands have very healthy stocks and the fishing grounds are very well managed. The fishing grounds are fiercely protected by the Coast Guard and Navy. Large catches of fish are a daily occurrence in the quaint fishing ports and the lack of large trawlers off the coastlines is a testament to the strong conservation Policies of the local fishing ministry.
Still, there’s no doubt that the prosperity we see in many parts of the islands was brought in large part by tourism, and a certain number of the old fishing villages, farming areas, forna and flora has been lost to the rattle and clatter of construction machinery. When Spanish dictator Francisco Franco first opened Spain up to the sun-starved masses of northern Europe, the 1960s and 70s holiday boom paved the way for development (and overdevelopment) on the islands. Naturally, the large-scale construction has had a major impact on all of the Islands.
Thankfully the building boom is well and truly over, as sure as eggs is eggs it will not be resumed in the same haphazard manner of days gone by. Property will become a finite resource on many of the Islands, all the indications point to a boom in the future price of property on the Canary Islands. With demand outstripping supply property on the Islands will become a very expensive commodity. Nature reserves, wellness centres and recreational parks are now a permanent feature of the Islands topography. La Gomera is a perfect example in point; it has an ancient and protected rain forest and has UNESCO protection across whole areas of the island. Vocal environmental groups have secured and protected whole swathes of the Canary Islands. Lakes, mountains, forna and flora are all now safe from the grasping hands of construction companies. Politicians and local Mayors have finally woken up and most of the islands now have large areas of State protected land.
One particularly encouraging step was taken in 2007 by “El-Hierro”, which set in motion a plan to make the island energy self-sufficient, using only renewable energy sources like water, wind and solar power. With the only rivers or sources of fresh water on the islands being high up in the mountains, getting clean drinking water has always been a problem. The depletion of nearby marine life and the general degradation of coastal areas during the building boom should now be a thing of the past.
Food and drink
Food: The food on the Islands is exactly how you would expect it to be, a heady fusion of flavours. Both Tenerife and Gran Canaria are becoming ‘Gastro’ destinations in their own right. Today’s customers are far more discerning than they used to be, and this has forced local restaurants and producers to focus on quality and service. However please do not expect the usual sterile over processed, uniform vacuum packed rubbish, which we are confronted with in the UK supermarkets. Most of the fruit on sale is ‘loose’ oddly shaped and tastes the way you remember it tasting as a child. It retains its true flavour and colour, its sweet and warm, ripened by the sun in its natural environment, and not under artificial lights in mile long green houses. The vegetables are as good eaten raw as they are cooked, nutty potatoes, sweet knobbly carrots, zingy chilli and crispy green salads. You can taste mother earth in every local tomato; hopefully we can keep the bony, interfering fingers of Brussels (the country, not sprouts) away from our tasty miss-shaped fruit and veg.
The fish dishes are as varied as they are abundant, the flavouring and rubs are the result of hundreds of years of Spanish, Moorish and African influence. Morocco, meets Iberian Spain, meets Portugal, and bumps into the 21st century in the Canaries, culminating in flavours which are unforgettably and uniquely Canarian. Pulpo (octopus) is a favourite of restaurants and tapas bars alike, sitting under the shade of a Ficus tree, sipping a crisp local white wine absorbing the sunset over the deep blue; it arrives in its halo of garlic butter, spices and parsley. Whether fried crispy or simmered slowly for several hours in the finest olive oil, it is a buttery, melting speciality, dusted with dark red sweet paprika and served in an earthenware pot, it has to be tasted to be believed, it’s marvellous. This is a dish which dates back to the time of the ‘Guanches’ (the aboriginal inhabitants of the Canary Island) and long may it remain.
Influences from the Far East are the spicy result of the deep water Island ports, Cargo ships have been delivering supplies from North Africa and the Far East since the time of Christopher Columbus. So if you need something spicy, you can find Asian influences in the local food. And for all the Balti addicts, well, it would be very bad form not to go out for a curry once in a while. Where would we be without our favourite Indian restaurant? There are several excellent Indian restaurants on the Islands, much adored by the locals and tourists alike.
Wine: Gran Canaria is the youngest designated wine region of the Canary Islands. Obtaining the status of DO (Denominacion de Origen) it includes the very bespoke and tiny El Monte Lentiscal wine area. The best wines are refined, some of the Bodega’s (vine yards) having been in operation since the 15th century. The cheaper wine is quaffable and inexpensive, some of the DIY farmers wines can be found on the forecourts of old dusty homesteads for as little a 60cents a litre. It’s not going to win any prizes but its deep in colour and full of local flavour, and most importantly it’s made with love. The easy drinking charms of farmers brew is likely to give you a sore head if you indulge in a good session, but nothing ventured, nothing gained.
For the really good stuff, Tenerife is the leading light in Canarian wine production. It is home to no less than 5 DO (Denominacion de Origen) wine producing areas. The following vineyards all produce outstanding wine. Abona, Tacoronte-Acentejo, Valle de Guimar, Valle de la Orotava and Ycoden-Daute-Isora, try any of the top wines from the aforementioned Bodegas and you will not be disappointed. While the classification of DO is a relatively new phenomenon Tenerife has held the status of DO since 1992, which is very impressive for a relatively small Island. One of Tenerife’s hidden secrets is El Monasterio (the old Monastery); one of the waiters at this wonderful old restaurant will happily blow the dust from a bottle of very old Rioja for you. It’s not going to be cheap, but a bottle of 30 year old wine is something to behold. The nose is intense; the wine is deep ruby red in colour, smooth on the pallet, and has a long finish. Wine of this quality, aged in 400 year old cellars should be good, and it is. Accompanied by the occasional spoonful of burnt crème caramel, it is a luxurious way to end an evening in the cooling night air.
Other wines to try are, Fronton de Ora-Malpas or Tintillas from Gran Canaria. Lanzarote has the Malvasia – Crianza from El Gifo.
Walking and hiking: La Gamera may be a tiny little known Island, but it has a big reputation with the hiking community. UNESCO-protected rainforest’s and dramatic unspoilt scenery make this Island a hidden gem. For the uninitiated walker, a gentle leg stretch would be the route from Las Hayes to Jardin; this is a gentle introduction to the Islands varied topography. On this walk you will encounter some fabulous forna and flora, evergreen forest with tree heath, wax myrtle, laurel, mosses and lichen.
For the more ambitious walker, the hike from El Contadero which meanders through the rainforest and terminates in the village of El Cedro is slightly more taxing, but it has some very spectacular views over the valleys and down to Hermigua.
One of the most varied and challenging hikes has to be the route which starts in the northern village of Agulo, it’s then a steady 600 metre climb up to the visitor centre at Juego de Bolas. After stopping for a well-earned breather its forward onto Las Rosas, before descending through Roque Cano and finishing in the village of Vallehermosa.
Water sports: Head to the spiritual home of water sports, namely the Island of Fuerteventura and you will be greeted with a strong warm trade wind. It’s a Surfing, Windsurfing and Kite Surfing mecca. It blows hard a strong on the Island and it has one of the best beaches in Europe. One spectacular stretch of beach can be found on the coast road to Corraleco, it is breathtakingly beautiful, the pure white sands blows in wisps across the Islands main tarmac artery which runs between the nature reserve on the left and the main beach on the right of the road. High sandy drifts are formed by the action of the breeze which slope down to the sea. This spectacular beach would not be out of place in the Bahamas, It has protected status which keeps it clean and dog free, and the wardens do a valuable and friendly job of keeping it perfectly manicured. The World Windsurfing Championships stop off on the Island which always draws a crowd.
The ‘Deep Blue’ dive centre is located in the harbour in El Castillo village, the diving is spectacular, whether you’re a shallow diving fanatic or a deep water specialist, you are almost guaranteed to have exceptional visibility in crystal clear water. With a little luck you will spot all of the usual suspects during your dive, Lion Fish, Grouper, Barracuda, Grey Mullet and Large Rays and if you’re very lucky you may spot the odd Tuna.
Cycling: Lanzarote is home to the Ironman competition, one of the world’s toughest triathlon competitions. The island has a large cycling community and many professional cyclists spend their winter training camps on the island. You can pretty much cycle around the entire Island and the roads are usually very safe and devoid of traffic. The route favoured by the Ironman competition is very popular; it climbs up through Teguise to Mirador del Rio- where you will encounter some fantastic panoramic views over the Island of La Graciosa.
Music and Culture
The Canary Islands seem to do music festivals and fiestas better than most, and it appears to be a monthly pursuit for the flamboyant revellers, both young and old. Be warned it can very heady and loud, they take having a good time very seriously during the carnival season.
February- Ash Wednesday, is the (Festival of the Sardine), where a huge sardine is paraded through the streets of Lanzarote and then burned on the beach.
Feb-March is Carnival in Tenerife (Carnival Santa Cruz de Tenerife) one of Europe’s biggest carnivals, rivalling that of Rio. Extravagant costumes and Latin American dance music.
May-June is Corpus Christi (La Orotova Tenerife) the Flower festival; the streets are covered with carpets made of scented flowers and coloured sand pictures. (This is a spiritual and very beautiful treat).
July, sees the start of the (Canarias Jazz and Mas Festival, Gran Canaria), based around the port of Las Palmas, this festival brings together some of the biggest names in European Jazz., head for Café El Gallinero on a Wednesday evening for the jazz jam sessions.
August, gives rise to a huge street party in Aguimes (La Traida del Gofio, Gran Canaria) with dancing, food stalls and loud music bars, a traditional ceremony similar to Palm Sunday, (but with alcohol), all the locals and tourists wave Palm fronds and call to the heavens for rain.
September, and your into the corn festival (La Traidia del Gofio, Gran Canaria) where you are obliged to throw Maize based porridge all over a stranger.
December 8th to January 6th ends a hectic year of festivals with The Three Kings, probably the most important religious ceremony/ fiesta in the calendar. Much time and effort is given to the baking of special cakes (Roscon de Reyes) an ancient traditional cake recipe which uses local oranges, lemons and crystalized fruit, the cake usually contains silver coins. It’s a play on the nativity theme and is much loved by the local children.
December 31st. The New Year is brought in with the (Nochevieja) celebration, 12 grapes are consumed simultaneously at the stroke of midnight on the clock, bringing in the New Year. The grapes are washed down with lashings of vintage Cava (sparkling wine), be warned, it can get very silly.
Business and finance
Ironically, the islands which were traditional destinations of poverty-driven emigration are now the recipients of large numbers of immigrants with very big bank accounts. From a business perspective, forming a company in the Canary Islands gives you a significant advantage over your competition: The seven Canary Islands were some of the poorest regions of Spain, and only decades ago this territory was practically an afterthought for Spanish politicians based in their shiny towers on the mainland. Although prosperity has brought the Canaries closer to the mainland, the perceived separation still strikes a real nerve with islanders. Whatever you do, don’t refer to the Iberian Peninsula as Spain in a business meeting – you are in Spain! A minority of islanders however, argue just the opposite, insisting that the Canaries would be better off as an independent country. The Jury is out on the independence argument, but the Islands certainly do have an attractive Tax system which attracts plenty of new businesses.
No VAT charged to your clients.
There is a local “IGIC” tax of 7%, but this only applies when billing clients who are also resident in the Canary Islands. When billing clients outside the Canary Islands, there is neither VAT, nor IGIC Tax.
There are other advantages to forming a company in the Canary Islands, all fully backed by the European Union. These advantages derive from the Canary Islands’ special Fiscal and Economic Regime (REF), aimed at encouraging investment in the Canaries by offering a lower tax burden.
- The Canary Islands Special Zone (ZEC)
Instead of the usual Spanish corporate income tax rate of 25-30%, companies approved for ZEC pay a corporate tax rate of 4%.
- Reserve for Investments in the Canaries (RIC)
Permits a company to divert up to 90% of pre-tax profits to a special fund. This fund is generally used for investment in new business (more specifically for the purchase of new or used fixed assets, subscription of bonds or account entries of Canarian public debt, or subscription of shares or stockholdings in the capital of companies in the Canary Islands). The fund must be spent within 5 years. Individuals who determine their net profits by means of the self-assessment method on their income tax form are entitled to a deduction in their total tax liability for the net operating profits devoted to the RIC.
- Deduction in corporation taxes for investments
A fiscal incentive which reduces the corporation tax or income tax liability. The percentages deducted are 80% greater than those of the general regime, with a minimum differential of twenty percentage points.
- Allowance for production of tangible assets
Allowance on the corporation tax or income tax liability deriving from the sale of tangible assets produced in the Canary Islands and which are connected with industrial, agricultural, livestock, and fishing activities. These allowances are of 50%.
- Exemption from Capital Transfer Tax and Stamp Duty (ITP Y AJD)
Exemption, under certain conditions, for incorporation, capital increases, and the purchase of goods and rights.
We hope that the above information has been helpful. The Canaries cannot be summed up in a few short pages, it’s a movable feast. They tend to stay with you when you leave and for many ex pats who could not resist their calling, they have become home. I am proud to say that the Canary Islands have become my second home. The Islands are captivating, and the people are warm and welcoming. The warm climate makes the living easy, and tourism is at an all-time high despite the current Geo–Political situation. The financial benefits of doing business on the Islands are second to none, and the Banks are open to new business.
Please do not hesitate to contact us if you require our help or any further information. We look forward to working with you in the near future.