Why Tenerife? A Discussion with Stephanie Wear Pintado

By Nadahl Shocair |

At the European Venture Market (EVM) during Berlin Web Week 2014 and its organiser Continua, I had the privilege to sit with ‘Why Tenerife’s‘ Director of Economic Development, Stephanie Wear Pintado, to discuss why they are in Berlin and sponsoring the EVM.

Evidently, there are still a lot of opportunities in tourism on the Spanish island, with over demand in the luxury sector. More five-star properties such as the Ritz Carlton are needed and plots are available for such new developments.

Over and above the focus on tourism, however, and leveraging Tenerife’s wonderful year-round weather as a vacation destination, its benefits are numerous: Its proximity to Africa, Europe and the Americas, favourable EU laws including in data privacy and protection, the fact there is no VAT but rather a fixed ITIC tax of only 7 percent and corporate tax rate of a meagre 4 percent (for any company employing five and more people), six direct submarine fibre optic links landing on the island, and Tenerife being a member of the ACE Consortium with submarine fibre optics that run down the west coast of Africa.

All this put together has evolved the brand of ‘Why Tenerife’ to promote the island as an attractive destination for startups in tech.

The tech sector in Tenerife is focused on telecommunications and ITC in general due to its infrastructure as a tri-continental HUB – with a TIER 3 data centre with an installed supercomputer, the most powerful in Spain and in the top 150 in the world.

Services is the main focus, where the opportunity is for businesses setting up in Tenerife with, for example, confidential information stored for global businesses operating in Africa, with full redundancy, reduced latency due to geographic proximity and direct fibre links.

The startup scene is thriving, with a couple of incubators and a science park. The island also hosts the Innova Conference, an event similar to the EVM where capital investors and angels are matched with startups.

The number of startups in Tenerife is in the thousands according to Ms. Pintado, with the majority being Spanish – although the island is starting to see a lot of international companies set up there because of the legal environment, as they all operate under Spanish law and European legal legislation. Over and above the 4 percent corporate tax rate, the reserve for reinvestment of company profits is as high as 90 percent which is tax free. They also have Free Trade Zones in the ports with startup camps operating in those zones.

The startup scene is leaning more towards B2B rather than B2C with a lot of service-oriented B2B environment.

According to Ms. Pintado, the Berlin startup scene is very interesting and they are trying to attract investors into the island to create a venture capital community to fuel a new startup community there as a tri-continental platform.

The idea of year-round sun-soaked beaches close to the office must be intriguing to many, and we at Silicon Allee will one day visit the island of Tenerife and report directly from there as to what is happening in the startup and technology scenes.