Market accessa) Location and ties

Their ideal geographic position as the southern Gateway to the EuropeanUnion and tri-continental bridge between America, Africa and Europe, ma-kes the Islands a magnificent platform for trade and business.

Historically and culturally, the Islands have close ties with Latin America andthey also have strong trading and institutional links with West Africa.

They make an excellent platform for trade, logistics and transferring servi-ces and technology between continents as they are on the main internatio-nal trading routes. This enables investors to use the Canary Islands fortackling strategic projects in West Africa and Latin America, with all the le-gal security implicit in basing their business in Europe.

Santa Cruzde La Palma

Valverde

San Sebastián de La Gomera

Santa Cruzde Tenerife

Las Palmas de Gran Canaria

Puerto delRosario

Arrecife

LANZAROTE

FUERTEVENTURA

GRAN CANARIA

TENERIFE

LA PALMA

LA GOMERA

EL HIERRO

Provincia de Sta. Cruz de Tenerife Provincia de Las Palmas

The combination of all these characteristics together with

one of the highest standards of quality of life in Europe,

the special tax regulations and other features listed below,

make the Canary Islands a business centre with enormous

potential:

· Geo-strategic situation and ties

· Investment incentives

· Qualified and competitive human resources

· Excellent services and communications infrastructure

· State-of-the art technological research

Reasons for investing in Canaries

Total surface area 7,447 km²

1,114 km of coastline

257 km of beaches

Average annual temperature Min. 18ºC- max. 24ºC

Official language Spanish

Local time GMT

Currency Euro €

G.D.P. 2013 39,943,450 €

G.D.P. per capita 2013 18,853 €

Population 2013 2.118.679

Population density 284,5 hab/km2

Tourist arrivals 2013 12,111,282

Working Week 40 hour week

Minimum wage 2014 645,30 €/ month

Retail Price index 2013 2.1%

Facilities:

Airports 8 (6 International)

Commercial Ports 27

Marinas 19

Road network 4.256 km

Canarias

¿

GENERAL DATA

b) Excellent transport and communications facilities

Airports. The Canary Islands have eight airports, six of which areinternational, receiving over 34 million passengers a year. Theseallow for around 1,500 direct flights a week to all the main Europe-an cities with the leading international airlines, including low-costcompanies that have been booming in recent years. By way ofexample, in 2009, the Canary Islands had 467 direct flights a weekto the United Kingdom and 334 to Germany.

12

Reasons for investing in Canaries

No direct weekly flights (main destinations):

UNITED KINGDOM 467

REST OF SPAIN 448

GERMANY 334

SWEDEN 45

NORWAY 41

FINLAND 31

BELGIUM 29

Source: ISTAC, INE, AENA

Passenger traffic in CanaryIsland airports in 2012

TOTAL 34.533.969

Source: AENA

Ports. There is an extensive network of commercial and fishing har-bours and marinas in the Canary Islands, with the Port of La Luz y LasPalmas (Gran Canaria) and the Port of Santa Cruz de Tenerife amongthe leading ports of Spain in passenger and cargo traffic, both betwe-en the Islands and from and to the rest of the world. It is worth men-tioning that the Canary Islands are on all the shipping routes betweenEurope, America, Africa and, in recent decades, Asia too, making it astrategic ship supply and repair station in the Mid Atlantic.

Canary Island ports in figures for 2012

PASSENGER TRAFFIC 6.750.186

CARGO TRAFFIC 40.224.725

Shipping connections with Africa include routes to: Angola, Benin, CapeVerde, Cameroon, Congo, Ivory Coast, Gabon, Gambia, Ghana, GuineaBissau, Guinea Conakry, Liberia, Mauritania, Morocco, Nigeria, Sene-gal, Sierra Leone, South Africa and Togo.

Connections with Africa, onthe other hand, include 38flights a week to thefollowing destinations:

- Agadir / Al Massira (Morocco)- Casablanca (Morocco)- Dakhla (Morocco)- El Aaiún (Morocco)- Goulimime (Morocco)- Marrakesh (Morocco)- Praia (Cape Verde)- Boa Vista (Cape Verde)- Sal (Cabo Verde)- Banjul (Gambia)- Nouadhibou (Mauritania)- Nouakchott (Mauritania)- Dakar (Senegal)- Conakry (Guinea)

Connections with Americainclude flights to thefollowing destinations:

- Caracas (4 flights a week)

Cargo traffic in CanaryIsland airports in 2012 (kilograms)

TOTAL 49.239.305

1. Morocco:Port of Casablanca, Port of Agadir,Port of Tarfaya, Port of Dakhla,Port of Layoun, Port of Tanger

2. Mauritania:Autonomous port of NouakchottAutonomous port of Nouadibou

3. Senegal:Autonomous port of Dakar

4. Gambia: Port of Banjul

5. Guinea Bissau:Port of Bissau

6. Guinea Conakry:Autonomous port of Conakry

7. Sierra Leona:Freetown Port

8. Liberia:Port of Monrovia

9. Côte d’Ivoire:Port of San PedroAutonomous port of Abidjan

10. Ghana:Port of Tema, Port of Takoradi

11. Togo: Autonomous port of Lomé

12. Benin: Autonomous port of Cotonou

13. Nigeria:Port of Lagos, Port of Apapa, Port of

Onne, Port of Tincan.14. Cameroon:

Autonomous port of Douala15. Guinea Ecuatorial:

Port of Malabo, Port of Bata, Port ofLuba

16. Gabon:Port of Libreville, Port of Gentil,Port of Sao Tomé

17. Congo:Autonomous port of Point Noir, Port ofMatadi, Port of Boma

18. Angola:Autonomous port of Luanda, Autonomous Port of Lobito, Port of Namibe,Port of Soyo, Port of Cabinda Autonomous port of Lobito

19. Cabo Verde: Port of Mindelo, Port of Palmeira,Port of Praia, Port of Sal, Port ofSal Rei (Boavista)

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15

16

17

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www.palmasport.es - www.puertostenerife.org

Canary Island ports are connected to over 500 ports throughout theworld by some thirty-odd shipping lines. They have spacious, moderndocks and large storage and operations capacity, apart from many con-tainer terminals in constant expansion, vehicle terminals, large coldstorage capacity and high quality facilities for passengers and cruiseships.

On the other hand, the Islands have an extensive inter-island air andsea transport network, with a large number of connections that are ide-al for carrying both passengers and cargo. This facilitates business bet-ween the islands, which in turn, have an extensive road network. Thisallows fast and effective distribution for the supply chain of productsand services.

Telecommunications. The Canary Islands are the ideal place for set-ting up and operating any kind of information and communication tech-nology-related activity, as you can see from the wide satellite cover(around 50 satellites provide services in Canaries) and their fibre opticsubmarine cable connections.

As for mobile telephone services, they are no different from the rest ofSpain and Europe as mobile phone use is similar to that of the SpanishRegions with the highest Gross Domestic Product (GDP) and it is on apar with the European Union average.

Several international telecommunications companies operate in the Is-lands, with a high degree of deregulation and with the latest generationtechnologies in information transmission. As for mobile telephone ser-vices, there is full GSM service cover, UMTS multi-media networks arein place, as is ADSL technology for high-speed internet connections.

With regard to hard-wired networks, the growth of ADSL services andfibre optic lines is the result of all the modernisation that the Canary Is-lands have been through in recent years. High-speed, broad-band in-ternet connections offer enhanced security and standards in line withthe rest of Spain and Europe.

Reasons for investing in Canaries

Transport infrastructure in the Canary Islands 2013

AIRPORTS 8 (6 international)

COMMERCIAL PORTS 11-State ports17-General Interest (Reg. Govt.) 14-Harbours and jetties (Reg. Govt.)

MARINAS 17+1 Dock (Reg. Govt.)2 State Ports

ROAD NETWORK 4.256 km

Source: ISTAC, AENA, PUERTOS DEL ESTADO, INE, GOBIERNO DE CANARIAS

There are currently 13 submarine cables connecting the Canary Islandswith the Spanish Mainland and countries such as South Africa, Portu-gal and Italy, and regions such as South East Asia and America. In2011 started a new fibre-optic underwater cable, Pencan 8, which in-creased the reliability and power of the existing cables with its capacityof 5,12 Tbps.

The 2,000 kilometres of submarine cable network that connectCadiz with Tenerife, Gran Canaria and La Palma, was installed inthe first six months of 2011, after the singing of the contract betweenAlcatel Lucent and Canalink. This network will cover the exponen-tial growth in demand for greater broadband internet connec-tivity in the Canary Islands. In this context, the new amenities supportsfor new IP applications and services, high speed data centres used ingreen energy research, for telecommunications services, the public ad-ministration and the academic and research community, especially withthe connection of the telescopes located at Roque de los Muchachos,on the island of La Palma.

D-ALIX Connection

The submarine cable network will also support the D-ALIX data centre,an essential component of ALIX, which is located in Granadilla de Abo-na (Tenerife), making the Canary Islands a high availability, reliableconnectivity point with West Africa. The network of this infrastructurehas been designed to meet high quality and robustness criteria to co-ver the technical and service requirements demanded by all telecom-munications operators providing their services in Spain. These are alsonecessary in order to effectively bridge the digital divide between theCanary Islands and the rest of Europe.

D-ALIX has won an award at the “Datacenter Leader Awards 2010” inrecognition of its modularity and flexibility. Moreover, its geographicallocation and international connectivity, make D-ALIX the referenceData Processing Center as Europe’s southern gateway.

http://www.d-alix.com/

Reasons for investing in Canaries

The best Tax Regime in EuropeTraditionally, the Canary Islands have always had a different and stabletax and economic regime to off-set the island factor, fragmentation anddistance in comparison with the rest of Spain and Europe. To this end,they have their own Economic and Tax Regime (REF, from the Spanish)under Spanish legislation and with the full authorisation of the Europe-an Union (EU).

The REF contains a series of tax breaks for setting up and operating bu-siness activities, including:

The table below shows how the Companies Tax rate levied on compa-nies registered in the Special Canary Island Zone is the best in Europe.

Reasons for investing in Canaries

The chance topay less inCompany Tax

Manyexemptions fromINDIRECTTAXES

Set up in FREEPORTS withamazing economicadvantages

· Flat 4% tax rate on ZEC companies

· Up to 90% reduction on the tax base for undistributed net profits

· 50% rebate on the production of tangible goods

· More beneficial tax deductions on investments than in the rest of Spain

· For setting up a company

· For increasing capital

· For acquiring capital goods

· Economic advantages for inporting and exporting and for actively processing goods

Company TaxRates 2012

(Source:

OECD Tax Database)

France

Italy

Spain

Germany

United Kingdom

Portugal

Finland

Netherlands

Greece

Average

Ireland

Canary Islands

Poland

34,4%

31,5%

30,0%

30,2%

28,8%

27,5%

25,0%

24,5%

24,0%

23,5%

20,0%

12,5%

4,0%

Reasons for investing in Canaries

Access to talent

The Canary Island population is younger than the national average forSpain, but highly qualified and offers more competitive labour costs thanin the rest of Spain. The low turnover of staff also means that companiescan win the loyalty of their employees to a greater extent, somethingthat does not occur elsewhere in the European Union. Furthermore, ac-cording to data from the National Statistics Office (INE, from the Spa-nish), the average labour cost per employee in the Canary Islands inthird quarter of 2012 amounted to 2.127,71€/month compared with anaverage of 2.598,69 €/month for the rest of Spain, putting the Canary Is-lands below the national average.

The Canary Islands have two public universities, one on each of the twomain islands: the University of La Laguna, in Tenerife, and the Univer-sity of Las Palmas de Gran Canaria, in Gran Canaria. Between the two ofthem, they had a total of 50.262 students enrolled in 2012, over half ofwhom were studying science and technology. Nearly 5,000 studentsgraduate from these universities every year.

In La Orotava, Tenerife, the first private university in the Canary Islands“The Canary European University (UEC)”, opened its first course in Sep-tember 2012.

The linguistic abilities of the Canary Islanders is generallystriking, basically due to the high percentage of foreignresidents in the Islands, the long-standing tourist traditionof the Islands and the fact that there is a large number ofbilingual schools.

Number of bilingual schools:· 3 French schools

· 7 German schools · 1 Japanese school

· 1 American school · 1 Norwegian school

· 16 British schools · 2 Swedish schools

Access to knowledge

The Canary Islands are the Spanish region with the highest increa-se in total R+D+i spending in recent years. In line with the currentEuropean Union (EU) policy, the Canary Island Government allotsmajor resources to developing the Islands as a technological andbusiness centre with a view to diversifying their economy and pro-moting sectors that generate high value added.

Support to innovation in the Autonomous Region of the Canary Is-lands is provided by the two public universities and institutes oftechnology, which provide the highly qualified human resources ne-cessary for developing the range of business activities and turn theIslands into a genuine R+D+i laboratory. The Canary Islands havestate-of-the-art scientific facilities and a large number of excellentapplied research centres, particularly in areas such as bio-techno-logy, robotics and telemetry, food and marine technology, environ-mental management and renewable energies, plus the universities’own research institutes, which have gained broad international pro-jection from some 150 research groups that work in each of these.

1. INTRODUCING THE CANARY ISLANDS

These centres make Canariesa springboard to the cuttingedge as they make it possibleto carry out high quality tech-nological research with welltrained professionals, institu-tional support and facilitiesthat meet all the require-ments with every guaranteeof success.

Reasons for investing in Canaries

Scientific facilities in the Canary Islands

MARINE RESEARCH· Canary Island Oceanographic Centre · Canary Island Institute of Marine Sciences (ICCM, from the Spanish)

· Applied Algology Centre · Spanish Algae Bank (BEA, from the Spanish)

ASTROPHYSICS AND TECHNICAL RESEARCH· Canary Island Astrophysics Institute (IAC, from the Spanish)· Canary Island Institute of Technology (ITC, from the Spanish)· Technological Institute of Renewable Energies (ITER, from the Spanish)

HEALTH RESEARCH· Canary Island Institute of Tropical Diseases (ICET, from the Spanish)

· Institute of Bio-medical Technologies (ITB, from the Spanish)· Canary Island Research and Health Foundation (FUNCIS, from the Spanish)

BIOLOGICAL AND AGRICULTURAL RESEARCH· “Antonio González University Institute of Bio-organics· Institute of Natural Products and Agro-biology (IPNA, from the Spanish)

· Canary Island Institute of Agro-food Research (ICIA, from the Spanish)