Buying a business in Spain - finding a bargain Spanish property
The British have been successful in business in Spain for many years. EU citizens have the same right to start or buy a business in Spain as they do at home. There are also bargain Spanish properties on the market which can be converted into premises. It is not quite that simple though!
What kind of business in Spain?
You must study the market to make sure there is a demand for the product or service you are looking at providing. Unless you speak Spanish fluently you would be best advised to concentrate your efforts on the areas of Spain which attract the most British tourists and largest population of ex-pats.
The vast majority of buyers opt for a bar or catering business of some kind. All major tourist resorts and large towns will have a selection of this type of business available for sale. Bargain Spanish property is out there but you must also consider the condition, location and suitability before committing. Profit margins are good and overheads are low in the catering industry. Whilst it is not essential to speak Spanish some knowledge of the language is always useful. Other areas of business which ex-pats have moved into include car hire, property sales and shops such as florists or gift stores.
Buying a business in Spain
Firstly you must take go to a national police station and apply for an NIE number, which is given to foreigners for identification and tax purposes. Business transactions make up a large percentage of property sales in Spain. Very often it is the business in Spain which is traded rather than an actual property sale. Spain is like the UK in that businesses can be either leasehold or freehold with both types having advantages and disadvantages.
The former are easier to buy and sell and are also relatively inexpensive. Most Spanish leases are for 25 years and the rent can only be increased in accordance with the rise in cost of living in Spain. The buyer must pay two months rent in advance as a returnable deposit (fianza). Most leases are on pre-printed government forms, which set out the rights of tenants and landlords. It may contain reference to ´participation´, which means the landlord can claim a percentage of the sale price. This normally equates to around 15%.Any major changes to business premises such as knocking down walls will require written permission from the landlord, and possibly planning permission from the local authority. Freehold purchases are less popular, mainly because of the expense, although there is no monthly rent to pay. With this in mind buying premises becomes a favourable option only when there is a bargain Spanish property for sale.
Registering your business in Spain
You need to register your business with the town hall and obtain an opening license (Licencia de Apertura). This defines what your business is and the way in which it will trade. You must also register with the IVA (VAT) office. You will need to employ the services of a Gestor who will do all the paperwork and obtain the relevant licenses for you. If you have an income in Spain you will be liable for income tax and social security payments.
All businesses in Spain must make social security payments. These payments entitle you to health care and contribute towards a pension if they are paid for more than 15 years. If you have employees then you must also make contributions on their behalf.
Property sales - Spain´s laws contain potential pitfalls
Under Spanish law debts are transferred with a property sale. Spain is no different to other places in that debts are transferred when you buy a business. Make sure your Spanish lawyer examines every aspect of the deal to check there are no debts or tax liabilities that would be transferred with the business or property sale.
A good place to start your search for a business in Spain is www.daltonsbusiness.com
