1. UNIQUE NATURAL CONDITIONS

The Canary Islands archipelago is made up of seven main islands of volcanic origin. These islands are located off the west coast of Africa, 1,100 km from the Iberian Peninsula. Administratively, the archipelago is divided into two provinces:

Las Palmas, which includes Gran Canaria, Lanzarote and Fuerteventura; Santa Cruz de Tenerife, which includes Tenerife, La Palma, La Gomera and El Hierro. The uniqueness of the mild and temperate climate throughout the year and the morphological features with landscapes of rare beauty, together with the innate hospitality of the population, make the Canary Islands a top tourist destination, which attracts more than 10 million foreign tourists and 3 million national tourists every year.

2. STABLE POLICY FRAMEWORK

The Autonomous Community of the Canary Islands was officially established on 16 August 1982, the date on which the autonomous Statute came into force.

The economic policy of the Canary Island Government is characterised by a remarkable capacity to generate current economy, thus enabling a considerable and ever-growing economic development.

3. REDUCTION OF THE TAX BURDEN

Historically, the Canary Islands have benefited from differentiated economic and fiscal treatment to compensate for the fact that they are an island. Spain's accession to the EU has modernised this special economic feature.

The foundations have been laid for the new Economic and Fiscal Regime of the Canary Islands (REF), which has provided the islands with exceptional conditions for the development of trade and investment. In fact, although all Community policies are implemented in the archipelago, the geographical characteristics of the islands allow them to benefit from a series of extremely favourable exceptions and modulations.

In this respect, the REF contains a series of tax incentives related to the creation and development of business activity. These incentives are included in Spanish legislation and are authorised by the EU institutions. There are also, within the REF, Free Zones associated with the ports of the Capitol, where goods are stored, processed and distributed without charges, tariffs or indirect taxes. Companies located in the free zones of the Canary Islands can also benefit from the REF.

Finally, it should be noted that the Canary Islands are integrated into the European customs territory and, although Community VAT or any of the existing excise taxes in the EU are not applied, the IGIC is applied, i.e. the direct Canary Islands tax, which replaces VAT but taxes final consumption according to a lower tax system of 7%.

4. PRIORITY ALLOCATION OF COMMUNITY AND NATIONAL AID

The Autonomous Communities of the Canary Islands receive EU funding from the Structural Funds and the Cohesion Fund, which are the main instruments of the EU's regional and cohesion policy.

The Canary Islands, classified as an Objective 1 region, enjoy privileged access to the Community's Structural Funds due to their unique characteristics which make them an outermost region: from this point of view, they seem to have received - more than other countries - the majority of EU financial aid.

5. A COMPETITIVE WORKFORCE AND A HIGH LEVEL OF EDUCATION

The Canary Islands have a younger population pyramid than other autonomous communities. This is due to the high birth rate, which leads to significant growth. Suffice it to say that in Spain the population under 30 years of age is 44.2% of the total, while in the Canary Islands the figure is 51.1%.

Education is carried out through a wide network of primary and secondary schools, two public universities, with an average of around 48,000 students enrolled per year, of which around a third are in technical faculties such as Engineering or Computer Science.

In addition to advanced technology, state-of-the-art scientific facilities and numerous excellent applied research centres, the islands also offer considerable educational potential thanks to public programmes adapted to the specific needs of businesses. At the same time, there are vocational training centres that combine the teaching of more traditional professions with new technologies.

Vocational specialisation stands out in the industrial and advanced sectors, with particular emphasis on the fields of biotechnology, robotics, telematics, food and marine technology, environmental management, wind energy, etc. There are also a large number of bilingual schools (English and German).

The official language is still Spanish.

6. EXCELLENT SERVICE AND COMMUNICATION INFRASTRUCTURE

Thanks to its location and geographical disposition, the Canary Islands have important maritime and air infrastructures which, together with those on land, ensure the rapid and efficient transit of people and goods.

There is an extensive network of commercial, fishing and sports ports in the archipelago. These ports are among the largest in Spain in terms of the movement of people and goods, and are an essential transit point for trade to Europe, America and Africa, as well as a strategic station for ship resupply and repair.

At the same time, the two international airports on these islands are the ones that most increase the number of passengers and aircraft on Spanish territory, with sufficient capacity to handle more than 25 million passengers a year. Both the ports and the airports are in a process of continuous modernisation and expansion, which allows them to occupy the highest levels of traffic and service quality in Spain.

It should also be noted that the Canary Islands are the place where most of the world's underwater cables converge, providing excellent communications with Europe, America and Africa.

Several international telecommunications companies operate on the islands, with a high level of deregulation and the most advanced technologies in the field of information transmission. As far as mobile telephony is concerned, there is currently full system coverage (GSM/3G).

At the same time, the telecommunications companies operating on the islands offer a cable service with technology (ADSL) capable of ensuring high-speed connections to the Internet.

7.FAVOURABLE GEOSTRATEGIC LOCATION

The Canary Islands represent the southern border of Europe.

Traditionally open to the markets of Africa and Latin America, it is an excellent trading platform for trade between the North and South, as well as being the crossroads of the main international trade routes.

Its special geostrategic location favours the establishment of commercial and financial operations centres, thus favouring the attraction of capital, including foreign capital, technology transfer and the exchange of services.

The Autonomous Community of the Canary Islands is a hub, integrated into the economy of the European Union, a natural access route for products from northern countries destined for southern markets.

8.CUTTING-EDGE TECHNOLOGICAL RESEARCH

The Spanish region that has invested most in research and development is the Autonomous Community of the Canary Islands.

A large part of public expenditure goes to the two Canarian universities and to the Public Research Bodies (OPI), which depend on the autonomous and central administrations. Among these university centres and public research bodies it is essential to list the most relevant ones:

• The Canary Islands Technological Institute (ITC), which basically focuses on three sectors: technological services, R&D and energy management.

• The Instituto de Astrofísica de Canarias (IAC), an internationalised Spanish research centre which forms part of the European Nordic Observatory.

• The University Institute of Applied Microelectronics (IUMA), which depends on the University of Las Palmas de Gran Canaria.

• The Canary Islands Institute of Marine Sciences (ICCM), whose work is aimed at technology in the fisheries sector, marine aquaculture, the marine environment, etc. Likewise, the Canary Islands Government, aware of the economic and social importance represented by Information and Communication Technologies (ICTs), has drawn up the Plans for the Development of the Information Society in the Canary Islands (PDSIC), within the framework of the Canary Islands Development Plan (PDCAN), as well as the Canary Islands Infrastructure Management Plan.

9. A GROWING LOCAL MARKET

The population census for the Autonomous Community of the Canary Islands shows a figure of approximately 1,800,000 inhabitants over a total area of 7,447 km². This makes it one of the most densely populated regions of Spain.

If we add to this figure the high concentration of tourism throughout the year, which in 2012 reached around 14,000,000, we can see that the potential market for companies located on the Islands is much greater than that of other Autonomous Communities.

10. WIDE REPRESENTATION OF FINANCIAL ENTITIES

All the most representative banks are present in the Islands, where some 40 banking entities operate in a structure that includes more than 1,000 branches.

The archipelago has the highest savings rate per capita, with greater liquidity and greater availability of the capital required to grant credit.