Economy in the Canary Islands

The strategic location of the Canaries in the middle of the Atlantic, between three continents, transformed them long ago into a place of transit, and consequently, into a privileged location as a welcoming platform for companies involved in intercontinental business. These natural circumstances have been seen as compensating politically for the insularity and geographical distance of the islands since the 16th century following their inclusion in the Crown of Castile. In the 19th century, these rights were translated into a free-change system known as ‘Puertos Francos’. The formulae continued evolving until 1972 when they were ‘molded’ into the Law of Canarian Fiscal and Economic Regimes (REF), a series of specific measures intended to promote the social and economic development of the islands.

The arrival of democracy in Spain and its involvement in the European Economic Community (EEC) demanded that the REF be put into action, something which would occur in 1991. Three years later, in 1994, a change took place in order to incorporate specific measures concerning direct taxation and the Canarian Special Zone (ZEC), a regime of low taxation which it was thought would convert the Canaries into an attractive place for the establishment of large companies. Another instrument created by the European Economic Community in 1992, was the Free Zone, a specific area where goods can be stored, changed or distributed without taxes being imposed on them, making the Canaries an attractive area for business.

Sustained by the myth of the 'Afortunadas' (The Canary Islands) and by the transatlantic currents to which they must submit, the Canaries have consolidated their appeal for centuries, an appeal which today attracts millions of visitors a year. Tourism is the engine of the Canary Islands’ economy. The natural conditions of the archipelago have favoured the development of this economic sector and the arrival of support for the sociologicial and technological changes has permitted the possibility of travelling to wherever one wishes to go.

The mildness of the Canarian climate, their beaches and, once again, their strategic situation have been the other determining factors in converting them into one of the main sun and beach tourist destinations in the World. However, the Canaries offer the tourist much more than sun and beaches. The pages of this section intend to show the riches that the Canary Islands have to offer the tourist.