One of the dreams that many people have is to give up their jobs in the UK and move to Spain to set up a business of their own. They want to escape the rat race and do something that they enjoy doing in a relaxed environment with better weather. However, the reality can be very different and many people who attempt to start a business in Spain fail and end up closing up and returning to the UK within a few years.
This guide aims to start you thinking about some of the issues associated with starting a business in Spain and attempts to make you realize that often it is a lack of proper planning and preparation that makes a business fail rather than the business idea itself.
Most people who start a business in Spain have never run a business before. It’s therefore unsurprising that they often lack an understanding of running a business in a different country with a different culture, different laws, different taxes and so on.
Taking some advice early can help you avoid some of the common mistakes that people tend to make and increase the chances of your new Spanish business being a success. With this guide, our goal is to answer some of the basic questions people often ask about starting a Spanish business, so you can get a grounding in some of the basic issues involved.
For a quick overview of some of the things you need to consider, take a look at our setting up a business in Spain checklist. You may also find our translations of Spanish legal and business terms helpful.
For specific advice on legal considerations when starting a business in Spain, please get in touch with our friendly, expert Spanish business lawyers based in the UK.
Common questions about starting a business in Spain
Is the legal system in Spain the same as the UK?
No, they are very different. The way that companies are structured can be very different. The way business plans are made is different. Banking procedures can be different. The tax system is very different. Employment law is different.
Do I need a lawyer to help me set up a business in Spain?
No, you don’t – just like you don’t necessarily need a lawyer when setting up a business in the UK. However, in reality you would always use a lawyer when setting up a business in the UK so what is so different about doing this in another country where you probably don’t have experience of buying before?
What decisions do I need to make when setting up a Spanish business?
There are various important decisions you will need to make when thinking about starting a business in Spain, including:
- What type of business to start
- Where to start your business
- How to structure your business (as a company or sole trader)
- Who should own the business
- Whether it’s better to start a new business or buy and existing one
For more information on what you need to consider when making these key decisions, please take a look at our guide to key decisions to make when setting up a Spanish business.
How does tax and finance work for Spanish businesses?
Running a successful business involves having a very solid grasp of the financial side of things, including your business’s tax liabilities. There are various aspects of this that our Spanish business lawyers can advise you on, including:
- Raising Spanish business finance
- Finding a currency dealer
- Spanish business tax rules
To find out more about the financial side of running a business in Spain, including tax matters, please take a look at our guide to Spanish business finance and taxes.
Is it okay to get involved with Spain’s ‘black economy’?
The simple answer is, no! The ‘black economy’ refers to business income and personal income that people do not declare for tax purposes, taking it out of Spain’s official economy.
Many people make the mistake of thinking it’s okay to get involved with Spain’s black economy because ‘everyone is doing it’ but the consequences for you are your business can be very serious, so it really isn’t worth it.
Find out more about the dangers of Spain’s black economy.
Do I need a business plan?
It is vital that you make a business plan. This will help you identify whether your business idea is going to work in the first place, and if not what, if anything, you can do to make it work. Having the plan in your head is not enough. Writing it down will force you to think about all the different aspects of the business.
If you need finance from, for example, a bank, you will need to provide them with a copy of your business plan. If the financial institution is Spanish, then you will need to make the business plan in the Spanish format and in Spanish. Business plans in different countries vary as in some countries the priority as to what is important can change.
What licences do I need for a Spanish business?
When you set up a business in Spain you are likely to require several licenses:
Licencia de Apertura
This is the opening license that you will need to get from the Town Hall in order to open the business. The cost will depend on the type of business and the region. You will normally need an inspection of the business by the authorities before this is issued.
Licencia de obra
This is a building license which you may need if you are making alterations to the premises.
You may also require a license for the type of work that you do. For example if you handle food or drink you will need a license. If you carry out certain activities such as being a doctor you will need a license.
You will need all relevant licenses before you can trade. Investigate these before spending too much setting up your business as you don’t want to find out that you can’t get the necessary licenses.
I need to buy property for me or my business, will that be a problem?
There are potential problems when buying in Spain, just like there can be in any country including the UK. However, most of the potential problems that you read about can be avoided by using common sense and by instructing an independent lawyer to advise you on the purchase.
We often see people with problems with their property and they invariably tell us that they didn’t use a lawyer or used the lawyer given to them by the seller or estate agent.
Find out more about buying property in Spain.
Find out more about the ongoing costs associated with living and owning property in Spain.
Why use Judicare for starting a business in Spain?
We have an experienced Spanish legal team comprising Spanish lawyers and English lawyers who have studied Spanish law.
We are UK-regulated Solicitors
We are a UK based firm of Solicitors regulated by the Solicitors Regulation Authority and who specialise in international legal issues.
We understand both Spanish and UK law
Because we understand both sets of laws we understand the difficulties that come when two sets of laws meet. This is particularly important when it comes to issues involving ownership, taxation and inheritance.
We are members of AIPP
The Association of International Property Professionals was set up to improve standards of professionalism in a largely unregulated overseas property market.
Our Spanish team has many years of experience dealing with a whole range of legal issues with Spain.
We speak your language
You need a lawyer who can speak your own language. More importantly you need somebody who can explain and discuss often complicated issues in terms that you understand.
We are independent. We are not allowed to act for the buyer and the seller at the same time. We are not linked with any Development Companies, Builders or Estate Agents.
Need help setting up a business in Spain?
Our UK-based legal team are highly experienced in helping clients to set up various types of businesses in Spain, including dealing with issues such as how to structure your business, understanding your tax obligations and buying Spanish property.
With a thorough understanding of both UK and Spanish law, we can provide clear, reliable legal guidance in plain English, helping you to get your business up and running smoothly and giving you the best chance of long-term success.