Game Development in the Canary Islands: How the Industry is Doing Today
When most people think of the Canary Islands, they usually picture the sun, golden beaches, and tourists. But believe it or not, they’re quickly turning into a hub for the gaming world. Just like Dubai, which attracted an influx of developers from all corners of the globe, the Canary Islands are now seen as an attractive spot for setting up a software or game art studio.
It’s not just the lifestyle that draws people in. It’s the combination of financial incentives, supportive regulations, and a rapidly growing creative community that makes the islands so attractive for game development teams. No wonder so many teams move there, and international game art studios look to collaborate with Canarian companies to create art. Let’s explore how this gaming hub is developing today.
THE CANARY ISLANDS: MORE THAN A HOLIDAY SPOT
The Canary Islands are arguably the best place for a holiday imaginable. Volcanic islands, picturesque beaches, and the surrounding greenery make them a favourite destination for millions of people worldwide. However, there’s much more to them than just this scenic charm.
Their geographical position off the coast of Africa, yet part of Spain and the EU, gives them a unique economic and political standing. Add to this good infrastructure, high quality of life, and a mild climate with warm winters, and you’ve got the dream place for dev teams seeking to balance work and lifestyle.
FINANCIAL & REGULATORY PERKS: WHY DEVELOPERS ARE HOOKED
One of the key reasons game developers move to the Canary Islands is the financial incentives the islands provide. Let’s look at this more closely.
REF & Tax Credits
The islands fall under Spain’s Economic and Fiscal Regime (REF), which grants them special tax rules. For video game development, the big draw is a 45% tax deduction on qualifying expenses, much higher than what’s available on the Spanish mainland.
Also, costs tied to personnel, software, materials, and external services tied to R&D are typically eligible under this scheme.
Canary Islands Special Zone (ZEC)
If a studio becomes a ZEC entity (i.e., registers under the Canary Islands Special Zone), it can enjoy a 4% corporate income tax rate. This is far below standard rates in Spain or most EU countries.
Other perks include exemptions or reductions in stamp duties, transfer taxes, and, in some cases, VAT (IGIC).
These incentives can stack. You can apply the REF deductions and benefit from ZEC status, making the tax picture very attractive.
Other Benefits
- A 25 % deduction for investments in fixed assets (computers, hardware).
- 10–15 % deduction on advertising and promotional expenses.
- In special years, eligible R&D tax credits can go even higher via bonuses.
- Ability to carry unused credits forward for up to 18 years.
All these cost-saving measures shift the balance of risk and return towards investing in islands rather than in more expensive metropolises.
THE CURRENT STATE OF GAME DEVELOPMENT
Let’s look at what’s actually happening in the field of gaming.
Studios & Projects
According to CanaryIslandsHub, there are over 40 video and animation companies active in the archipelago. Among the most prominent are No Brakes Games, creators of Human: Fall Flat title, and Promineo Studios.
One of the recent players in the market is Quantum Box Games, a Canary-based studio that received $1.9 million in funding. This confirms the potential companies and investors see here and demonstrates that the Canary Islands are no longer viewed simply as green hills.
Growth & Momentum
The gaming sector in the Canary Islands is still in its infancy, but it is growing rapidly. Local interviews note that developers are moving here or launching new branches because they can make their money go further, thanks to tax perks.
Still, the ecosystem is small, and many studios are early-stage. The infrastructure for large teams, especially in remote or rural island zones, can lag.
Building Talent & Community
An industry is nothing without people. The Canary Islands are taking steps to grow their tech and creative talent pool.
Education & Skills
Universities and local training centres are beginning to offer courses focused on game development, animation, and interactive media. Courses are offered in 11 different languages, which gives aspiring devs on the islands a chance to stay home while gaining essential skills.
The presence of active animation studios on the archipelago also demonstrates the growing potential of specialists in 2D/3D art, software development, and tools applicable to the gaming industry.
Culture & Collaboration
The local dev community is small but tight-knit. Game devs say people help each other out, share contacts, and collaborate, something that gives newcomers a leg up.
There is talk of forming more formal associations or guilds for devs in the islands to coordinate events, mentorship, and advocacy.
Annual game-oriented events and trade shows are being used to attract mainland and international players to the Canary Islands’ potential.
CHALLENGES & WHAT LIES AHEAD
Sure enough, the Canary Islands aren’t all just roses. Just like any country, they have their own bumps.
- Competition: Cities like Barcelona, London, or Berlin already have mature ecosystems. The Canaries must prove they're not just a tax trick but a lasting alternative.
- Infrastructure gaps: Some remote zones still struggle with high-speed Internet connection, essential for dev teams working online.
- Scale & funding: Many studios are small, and scaling up is tricky in a less mature market.
- Talent retention: Once locals gain experience, they might migrate to bigger cities unless incentives and career paths are strong.
Still, the many advantages the Canary Islands are offering, including tax perks, pretty landscapes, and growing momentum, make it too tempting to just pass by. If they keep up with the pace, they will become the next big hub for gaming that everyone will talk about.
Final Thoughts
Gaming development in the Canary Islands is shaping up very quickly. With generous tax incentives, supportive regulations, and a growing talent pool, the islands are proving they can compete with traditional European hubs.
Studios here are not only producing games that reach global audiences but are also building a strong local ecosystem where developers can collaborate, learn, and grow.
Of course, it’s still early days, and challenges remain. But for developers who want sun, sea, and a comfortable work-life balance, the Canary Islands tick the box.
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