Light manufacturing
The tax framework rewards companies that genuinely produce on the islands, and local production enjoys a specific structural advantage.
Why it fits: The ZEC and the AIEM both favour businesses that actually manufacture in the Canary Islands rather than simply import and resell.
Made on the islands
The Canary tax framework is built to reward genuine economic activity, not paper presence. A company that actually produces here can usually access the ZEC corporate tax rate of 4% under Ley 19/1994, against the 25% standard rate in mainland Spain. To qualify, you create a minimum number of jobs — at least 5 in Tenerife or Gran Canaria, and 3 in the smaller islands — and meet a minimum investment in fixed assets within the first two years.
The second pillar is less well known but just as relevant: the AIEM. The Arbitrio sobre Importaciones y Entregas de Mercancías is a duty applied to certain imported goods that compete directly with products made in the Canary Islands. It exists under EU authorisation (Council Decision 2002/546/EC and its periodic renewals) precisely to offset the cost penalty of producing in a remote, fragmented island market. For a manufacturer based here, it means imported equivalents carry a duty that local output does not — a structural advantage on price.
The list of protected categories is specific and reviewed periodically, so it matters whether your exact product is covered. We point you to our AIEM explainer for the mechanism, and to a qualified adviser to confirm your tariff code before you build a business case on it.
What qualifying manufacturing looks like here
Light manufacturing on the islands tends to cluster around products that are heavy, bulky or perishable enough that importing the finished good is expensive — so making it locally pays. Beverages and bottled water, cleaning and personal-care products, plastics and packaging, and assembly of industrial components are typical examples. The common thread is real transformation of materials on site, which is also what the ZEC and AIEM are designed to reward.
What premises to look for
A manufacturing unit usually needs three-phase power sized to your machinery, a robust floor slab that can carry production lines and forklift traffic, and enough clear span to lay out a process without wasted movement. Loading and storage of raw inputs and finished goods often drive the floor area as much as the production step itself.
We translate your process into a specification — power, slab, height, access and yard — and screen the market against it, rather than sending you a list and leaving you to guess. We also flag whether an activity licence for your specific manufacturing use is realistic in a given location before you commit.
FAQ
- Does light manufacturing qualify for the ZEC?
- Manufacturing is one of the core eligible activity categories under the ZEC. You must meet the minimum investment and create at least 5 jobs in Tenerife or Gran Canaria.
- How does the AIEM help a local manufacturer?
- The AIEM levies an import duty on selected goods that compete with local production. That gives a manufacturer producing on the islands a structural price advantage.
- Does the AIEM cover my product category?
- The protected list is specific and set by EU decision. See our AIEM explainer, then confirm your product code with an adviser before you plan.