1: STARTING A BUSINESS IN SPAIN

With many expats choosing to start their own business and as so many people move to Spain from the UK, there is more scope than ever to set up and start a business providing services and new ideas to the ex-pat community.

It will be advisable to learn some Spanish to cope with the basics and to deal with the Town hall, otherwise it maybe necessary to employ Spanish speakers or a translation service. It should be noted that as some new ideas do also appeal to the Spanish themselves as well as other nationalities and a successful business must cater for all nationalities.

Starting your own business in Spain does open up the potential for high earnings - there is no ceiling and no restrictions. Of course this doesn't mean starting a business in Spain is without potential downsides.

Firstly you do not have a guaranteed income and if you are starting from scratch and have to build a customer base which will involve outlaying money on advertising, setting up premises etc. before any money comes in. Most people who start a business fail because they run out of capital before the business starts to take off. So ensure that that you have sufficient funds for at least a year.

The failure rate of start-up businesses in Spain is high, particularly for businesses providing services to the expats that already exist as the competition is so high.

Many who choose to start a business open a bar or restaurant. The secret is to be the first with a new idea and if successful it could prove to be very profitable, so before you start a business in Spain ask yourself the following questions:

Are there already too many other businesses in competition with each other?

How is your new business in Spain going to differ to existing businesses?

What can your business in Spain do differently to get an edge?

Do you have a new business idea for Spain that doesn't exist yet?

Is there a market in Spain for this new business idea? Research it first.

Is it the right time of the year to start the business?

Will it be profitable all year round, or only in the summer?

It may be sensible to consider buying an existing business from someone who maybe is considering retirement. The advantages are being able to see that it is already profitable so you can start earning from the business straight away, avoiding the paperwork that the initial setting up entails and having the enthusiasm for hopefully improving the business even further with your new ideas. However we must point out that when you buy a business in Spain you become liable for any debts that come with the business. So ensure that all debts are cleared.

Alternatively there are now a number of franchise opportunities available, which also vastly reduces your risk of starting a business and it failing as the franchise should be proven with on-going backup and support.

Once you intend to start a business, you are going to need either a Gestoria or an accountant, so it is advisable to contract one as early as possible and pay them to set the business up – it should be worth it in the long run.

1: You need an N.I.E. number which is simply an identification number for which you may already have as it is needed for many purposes such as renting or buying a property.

2: Decide with your accountant the structure of your business in Spain.

Sole Trader: or Empresa Individual with the business being run in one persons name.

Partnership: or Sociedad Civil where several individuals will come together to form the business.

Limited Company: or Sociedad Limitada with registered shareholders and a set minimum trading capital in the bank. Fees are higher than for a sole trader but if sued then only the assets of the limited company are at stake.

Public limited Company: or Sociedad Anonima is a larger company with a large minimum trading capital and shareholders.

3: Register your business at the local town hall and obtain an opening licence (Licencia de Apertura) which defines what your business is and how it will operate.

4: Register your business in Spain with the IVA office which is the equivalent of the Revenue and Customs in the UK. Your business will receive an identification number known as a CIF. The Agencia Tributaria collect your tax on any profit you make.

5: Register your business with the Social Security office and make social security payments which vary depending on the structure of your business. If you are a sole trader (Empresa Individual) expect to pay approximately €235 a month. This gives you entitlement to the local health service such as doctors and hospitals (not dentist) and if you pay in for 15 years you qualify to receive a pension.

If your business is structured as a company then you have to pay social security on behalf of any employees and they have to have a proper written contract providing guidelines for both parties.

6: Work harder than you have ever worked before, never give up and hopefully make more than enough to retire on when the time comes.

2: FOCUS ON ALTEA:

Altea is a town of mixed contrasts, from the medieval cobbled streets in the picturest old town clinging to the foot of the wonderful blue domed church, to the hustle and bustle of the modern shopping streets and the relaxing delights of the palm-fringed seafront esplanade.

Located 11 kilometres north of Benidorm and whilst close in these terms, it is world apart in style and content.

Altea is a Bohemians delight and many musicians, artists and writers from all over Europe have made it there home from the early 60s. Many of the properties in the old town have now given over to small shops selling many local crafts, paintings and gifts and in the summer there are additional market stalls in the church square with buskers, mime artists, etc. There are also many top class restaurants serving many local dishes as well as some excellent international cuisine. A warm summer evening can be enjoyed enjoying the sites of the old town and as it is so popular, our tip is to choose a restaurant, book a table for two hours or so hence and spend this time enjoying the market and craft shops.

The cultural aspect has recently been enhanced by the modern and very impressive arts centre and concert hall - the Palau Altea Centre d'Arts, which provides a full calendar of entertainment and cultural activities.  

The sea front promenade has a number of pebble and shingle beaches with a backdrop of bars, cafés and restaurants. This area is also the venue for a really huge market, which is held every Tuesday.

There is also a fishing port and marina.

This newsletter is intended as a guide and to be informative and helpful in the process of searching for and purchasing a property in Spain. Total accuracy cannot be guaranteed and in all legal, fiscal and other matters a fully qualified professional should be consulted. Reproduction of any part of this newsletter is not permitted without written permission.