Many people moving to Spain and needing to make a living end up starting their own business in Spain.
Often it is because of the frustration of looking for jobs and work.
When you do find a job in Spain you then find it is very low paid compared to Western Europe or America.
At that point many people decide they would be better off to start their own business in Spain.
Stuart talks about being self-employed in Spain:
ADVANTAGES AND DISADVANTAGES TO STARTING A BUSINESS IN SPAIN
With so many people moving to Spain from countries such as the United Kingdom there is more scope than ever to set up and start a new business in Spain providing services and new ideas to these expats. If you start the right business in Spain you could be sitting on a goldmine if you are first.
Unless you are fluent in Spanish or can employ Spanish speakers then your new business in Spain is most likely to be in an expat area on the Costa del Sol or Costa Blanca and will probably be catering to the growing expat population. Even so you will need to learn some Spanish to cope with basics.
When you start your own business in Spain you 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.
When you start your own business in Spain you don’t have a guaranteed income so allow time and have at least six months savings to survive on.
You start your business in Spain 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 in Spain fail because they run out of money before the business starts to take off. If you can get past this difficult initial period you should start to reap the benefits of starting and running your own business in Spain.
Note that the failure rate of new start-up businesses in Spain is high. Many people start a business in Spain in expat areas which makes sense but there are already many other businesses providing services to the expats. Most people who start a business in Spain open a bar or restaurant. Before you start a business in Spain ask yourself these 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.
BUYING AN EXISTING BUSINESS FOR SALE IN SPAIN OR A FRANCHISE IN SPAIN
If you want to get up and running quickly and have capital to invest you may want to consider buying an existing business for sale in Spain.
This article on buying a business on the Costa Blanca will also help.
Major advantages are being able to see that it is already profitable so you can start earning from the business straight away, avoiding the horrible initial setting up period of a new business in Spain and hopefully improving the business even further with your new ideas and enthusiasm.
Just be careful because when you buy a business in Spain you become liable for any debts that come with the business.
Alternatively there are now a number of franchise opportunities available in Spain and this again vastly reduces your risk of starting a business in Spain and it failing as the franchise in Spain should be proven with on-going backup and support.
BUSINESS OPPORTUNITIES IN SPAIN
Most Spanish business opportunities will involve buying a bar in Spain. This is because most people looking at Spanish business opportunities will not be fluent in Spanish and so they look for a business that offers a service to tourists who typically will speak English.
Most other business opportunities will also be tourism related due to the same language reasons.
Other popular ways of starting a business in Spain include buying a property and making it available to guests as either a hotel, guesthouse or B&B (bed and breakfast in Spain).
Restaurants are also a popular business opportunity as people again seek to cater to Spain’s huge tourist trade.
The explosion in numbers of younger people moving to Spain from Northern Europe has led to a whole host of businesses catering to the new residents. These include estate agencies, bedding shops, English supermarkets, computer repair shops, English bookstores etc.
Possible business opportunities in Spain include existing businesses in Spain that have been up and running for some time and also it includes franchises for sale in Spain – another good way of buying into an already established and successful business concept.
How about coming up with new business ideas and ventures that have been set up successfully elsewhere in the world but have not been applied or set up in Spain yet?
If you pick the right business opportunity in Spain you may find little competition is in existence. It makes sense to think of successful ideas that are spreading across America and Northern Europe and consider whether they can also be applied to Spain.
Try think of some unique service that perhaps hasn’t yet been offered – there are thousands of other people running bars and restaurants in Spain so you really have to excel at that trade to succeed.
Most businesses will be limited to providing services for and to expats because breaking into the Spanish market is hard unless you are absolutely fluent in Spanish – and even then being accepted by the Spanish business community can take years.
Ultimately if your dream is to move to Spain maybe you should consider coming to Spain and getting a job in Spain first just to see if you settle in Spain. Living in Spain will give you the ideal opportunity to see what services are perhaps not present and you might spot gaps in the market which you can fill.
STEPS TO TAKE TO START A BUSINESS IN SPAIN
If you intend to start a business in Spain you are going to need either a Gestoria or an accountant anyway so get one now and pay them to set your business up – it’s worth it!
STEP ONE – You need an N.I.E. number for your business in Spain. This is simply an identification number for foreigners which you may have already as it is needed for many purposes such as renting or buying a property. You can get this yourself by going to a police station with your passport. You then collect your number about three weeks later.
STEP TWO – Decide with your accountant the structure of your business in Spain.
Empresa Individual is the equivalent to a sole trader in the UK with the business in Spain being run in one persons name.
Sociedad Civil is a partnership where several individuals will come together to form a business in Spain.
Sociedad Limitada is a limited company in Spain 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.
Sociedad Anonima is a larger company with a large minimum trading capital and shareholders. This is similar to a PLC in the UK.
STEP THREE – Go to the local town hall and register your business in Spain by getting a opening licence (Licencia de Apertura) which defines what your business in Spain is and how it will operate.
STEP FOUR – Register your business in Spain with the IVA office which is the equivalent of the Revenue and Customs in the UK. Your business in Spain will receive an identification number known as a CIF. The Agencia Tributaria collect your tax on any profit you make in your business in Spain. Again all this form filling can be done on your behalf by your Spanish accountant.
STEP FIVE – Your business in Spain needs to register with the Social Security office and make social security payments which vary depending on the structure of your business in Spain. 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 in Spain 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.
STEP SIX – Get your business in Spain going – work harder than you have ever worked before – never give up and make lots and lots of money!
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