You don’t need to know all the rules, you just need to know Comaskey Properties and Spanish Solutions in La Zenia..
We have a client, Martin K. who is interested in extending his chain of sandwich shops from Ireland to Spain.
We helped Martin with his move to Spain and we hope to do that same when he opens his new and successful business on the Costa Blanca (and all over Spain).
You may well be aware that we spent 18 months (no exaggeration) putting the legal structure together for the Comaskey Franchise, so with that experience we were able to help Martin with some basic information. A special thanks to Amanda in Spanish Solutions for pulling all of this together, and to Alex Sanchez, our Taxation and business set up expert. Alex´s experience includes working with a chain which currently has 79 outlets across Spain!
Maybe you have had a gem of a business idea and you would like to set up a new business in Spain to enjoy the life here in the sun away from the stress and strain of living back home.
Maybe you are tired of Brexit and want something new?
Are you ready to open a new hairdresser, estate agency (we prefer if you don’t!!) or any other type of service that you need. In Martins case, it’s a sandwich bar. For obvious reasons, I can’t reveal here why his product will suit the Spanish market but bear with me when I tell you it’s slightly different from the regular sandwich.
Without mastering the language of Spanish, sometimes it can be hard to establish a business in another country without knowing the laws, customs and the speed at which stuff gets done. That is why in our opinion having the guidance of a trusted adviser is very useful. (some would say vital!) Clients of Comaskey Properties get the best of two worlds. legal fiscal and taxation help combined with Real Estate know how. Spanish Solutions have helped many Irish and British business owners start on their way here on the sunny Costa Blanca since 2005.
The Comaskey family opened Paddy’s Point back in 1999, which has grown to be the best bar on the Costa Blanca. This was not by accident and some serious work was done to achieve this. What we learned over the years still helps our buyers and entrepreneurs today.
Firstly, we were told it would not work. The market in Spain is saturated with cheap places to drink and the vast majority of people told us we could not charge double for the same beer and hope to get clients in the door. What we did instead was not to drop our prices but to offer increased value. Sure, A Guinness is a Guinness … or is it? The difference in having a warm can of Guinness dumped in front of you compared to being served by a qualified bar man in a tulip glass, while you are watching the Rugby or GAA on a big screen. This gave people the value that they wanted. I remember during those days doing door man most Sundays, telling people on the front door there was simply no room for anyone to come in. People love value.
Before that, we had to fit out the bar. Now these days, Comaskey can introduce you to the best kitchen supplier, sign man, tiler and plumber in the region and they will do the job on time, and on budget. Back then we had to import tradespeople for Ireland to get things done. What an advantage of our clients now to know that the electrician we recommended has already done the electrics for ten other units around here as recommended by us.
The Lease Agreement.
Bernie opened Paddy’s Point before Spanish Solutions or Comaskey Spanish Property existed. All we can say about that is, if you are looking to get screwed over, try to negotiate with a Spanish builder in Spain without a knowledge of the market. We ended up buying the unit (luckily!!) but negotiating and signing these agreements is dangerous territory unless you have the experience of 3,000 deals under your belt like we at Comaskey do.
You´d think the days of two suppliers’ prices would be over but still there are certain beer and food suppliers who have a price list for Gringos and one for locals. Because of the buying power of all of our clients, we get you the best prices on all products, therefore increasing your chances of actually turning a profit.
Legal and Taxation.
Bernie used the services of Rafael Carrasco in Playa Flamenca when he opened Paddy’s Point (it’s just down the road from La Zenia and he was always very happy. Even now we work with Rafael from time to time. However, having Alex Sanchez and the Spanish Solutions team in your corner guarantees that you (once you do what he advises) pay not a euro too little or not a euro too much in tax.
We make sure the opening licence is correct. The license in Paddy’s took 10 years to get the final stamp, ten years!
Getting onto the system in Spain can be more simple than you´d imagine. EU citizens can set up a business in Spain once they have a N.I.E. number (Numero de Identidad de Extranjero) and a social security number. Spanish Solutions can obtain these for you cheaply and we usually advise that the simplest way then to run a business is to be a sole trader (an Autonomo). This way you can either trade in your own name or as a business name. However, in Martin´s case here- he wants to open a chain of restaurants so we advise a more complicated S.L structure. You may need to obtain an opening licence (Licencia de Apertura) if you have business premises but in Martin´s case, we have sourced a unit which has an existing opening licence in place, saving him time and money.
Many people looking to set up a small business in Spain, ask us is it possible to just see how the business goes without having to pay any set expenses? Unfortunately, not legally, as you are required to register with the special Social Security scheme for self-employed workers, and pay an amount each month. This varies greatly as they have introduced introductory gradual payments and we can advise on this. You are entitled to the local health service, which is excellent, at this stage and if you pay for a certain number of years you may qualify to receive a pension. Torrevieja hospital was recently voted one of the best in the world in an independent survey by the way!
So, back to our friend Martin and his food outlet. It is best to discuss the two different tax systems with Alex Sanchez and hopefully he can minimise tax as much as possible. If you pay rent and have employees, there are other obligations. Alex deals with all our employee contracts for example- an absolute minefield. (different employees in our firm take home different amounts even though our Gross pay to them might be identical!) You may also need a licence for certain professions – Martin does not need one but we helped a dentistry clinic open in La Zenia and they did of course.
If you are not alone in running the business, two or more proprietors can set up a Comunidad de Bienes (CB). It’s not really recommended anymore but it’s similar to a sole trader.
There are benefits to forming a company. as advised to Martin- a Sociedad Limitada (SL), or buying a ready-made one off the shelf as we have often done for side projects of our own. It is less straight-forward and more expensive, but as the company is a legal entity, you may be protected if sued when a guy falls on a chip. Luckily in Spain we don’t have the sue culture that is now the thing in the UK, but protect yourself anyway.
This may sound quite daunting now that I read back over it. Look it’s not that bad, we are here to help, whether you want to open 79 units, as in one of our clients case or a one man show, as many of our sole traders happily currently exist as. Whichever manner you decide to start up your business, you will need the services of an accountant (Gestoria). If you take a short cut here, you are doomed! A sole trader set up, however, is not painful and, once the initial paperwork is done, you will be up and running and can get on with making some money!
As well as setting up businesses on the Costa Blanca there are other ways to get profitable and legal. There are many different types of businesses for sale in Spain, including franchises. The Comaskey Estate agency franchise, for example, includes a great deal of “hand-holding” so the franchisee is assisted every step of the way.
Spain is a great place to open a business:
• Costs tend to be lower in Spain. Martin saw a considerable saving in his cost of producing a sandwich for example. Signs, wages and utilities are lower than they are back home and your heating bill is also greatly reduced!
• Profits tend to be higher in Spain (per HSBC) and the business owner has more money left for him or herself at the end of the month.
• The lifestyle- On your days off you will be spoiled for things to do.
• The size of the economy- one of the largest in Europe.
• If you are thinking the economy in Spain is in trouble, take a trip to the Marina in Alicante and count up how many hundreds of millions of euro are sitting on the docks there!
• Disposable income, people are here on holidays or an exchange year from university. They have money to spend and if you provide the product or service, they will buy it.
• Lack of rules and regulations. Sure, we mention a lot of red take in this article, but I guarantee it’s easier to open a sandwich shop in Spain rather than Dublin or London. Maybe it’s because we understand the rules so well now, that we are so confident, but you don’t need to know the rules, you just need to know us!
Muhammad Ali, once said “He who is not courageous enough to take risks will accomplish nothing in life.”
If you are wondering how to open a business in Spain, get in touch with us. firstname.lastname@example.org