How to Buy a Business in Spain

Spain is fast becoming one of the worlds most popular tourist destinations. Once a hidden gem, this country has exploded in the past decade, quickly becoming a new hot spot for European travel, which is why it has become a lucrative business opportunity for American expatriates. In 2007, 130,000 new expatriates bought businesses in Spain; 30,000 more than just 3 years prior. Whether you're interested in buying or transferring ownership of an established Spanish business or starting your own business in Spain, there are a few details you'll need to consider to make your business legal, legitimate and fully operational.

Difficulty:

Challenging

Instructions

Things You'll Need

• Work permit Visa Central Commercial Registration certificate Tax identification code Spanish bank account Public deed of incorporation Work center license Certified accounting books

Preparing to Start Your Business

1. Create a business plan. Remember that your business will not start making a profit on opening day. It could be months, in fact, before you see even a small amount of profit and you need to be prepared for this. If you've never owned your own business, consider taking a basic or international business course at your community college.

2. Understand the laws. This is not the United States. Throw out everything you know and understand about business in the U.S. and start learning a new business language. Business laws in Spain are different and because they vary from town to town and region to region, there are no basic rules to follow. Make sure you deal with reputable companies when it comes to learning what laws and licenses apply in the different cities and towns. Consider hiring a local lawyer who is well versed in Spanish business law.

3. Take the culture into account. The one thing that visitors love about Spain may be the thing that drives you mad about running a business there. Spain thrives in a relaxed environment--working on the basis of a siesta culture that is popular in most Southern European countries--and the Spanish take leisure time seriously. There is nothing you can do about this, so you might as well get used to it.

4. Be realistic. It is important to understand what it takes to run your own small business. In order for a business to thrive, you'll be putting in a lot of hours marketing, running and maintaining your business. Expect to make a long term investment and don't expect to make millions in profit your first year out.

Get the Proper Certificates and Legal Permits

1. Get your visa and work permit. According to the laws governing the Spanish Ministry of Foreign Affairs, American expatriates may only open a business in Spain once they have their visa and work permit. Getting a visa isn't difficult, but it can be a long process. You will need to submit paperwork to both the Spanish Consulate serving your home address in your country of origin and to the Subdelegación del Gobierno in the Spanish city in which you hope to open your business. Once your work visa has been processed, you must pick it up, in person, at the Spanish Consulate in your home country.

2. Register your company. In order to become a legal business establishment in Spain, you must apply for a Registro Mercantil Central certificate (Central Commercial Registry), which confirms the name of your company and ensures the name is not already being used by another business. If you're buying a business without changing the name, you can simply change the ownership and contact information. Registration is available both online and in person.

3. Apply for a tax identification code. All businesses operating out of Spain must pay Spanish business taxes. Once your business name has been confirmed, you may apply for your tax identification number (C.I.F.) at the tax office. You will be required to pay an applicable transfer tax at the time of registration, which is 1 percent of your companies capital share, and make a formal declaration that you are starting your business.

4. Apply for a Spanish bank account. Your business capital, at least, should be deposited into a Spanish bank account. Depending on the type of business you are starting, there are certain monetary requirements. A personal business must show a balance of EU 3,0005.06. You should also have at least a years worth of savings on top of your initial investment in case things don't go according to plan.

5. Obtain a public deed of incorporation. According to doingbusiness.org, the company shareholders must obtain a public deed of incorporation. This document shows proof of the companies shareholders and governing body, the amount of shares held by each person and the type of administration handling the company. To get a deed of incorporation, go to any certified notary public in Spain with your tax identification number, bank deposit certificate and your company's registration certificate. All shareholders must be present to obtain certificate. If you are the sole owner, no one else is required.

6. Register your company with the Social Security General Treasurership and apply for an opening license. You can register for Social Security General Treasurership online, but your opening license must be obtained in person from the Town Hall and mailed to the Direccion Provincial de Trabajo (Regional Work Authorities Office). You must bring your public deed of incorporation with you to get the license. There is a small fee required, which is dependent on the province in which you are opening your business.

7. Register your accounting books. Under Spanish law, companies must keep registered accounting books and agendas, which account for all of the company's business activities, including meeting minutes and general finances. According to justlanded.com, these books must be certified and stamped by the Central Commercial Registry before they are used.

8. Notify the Regional Work Authorities. Once all your paperwork has been filed and you have all of the proper certificates, permits and registrations, you must inform the Delegación Provincial de la Consejería de Trabajo e Industria (Regional Work Authority) that you are opening for business.

Tips & Warnings

• Visas and work permits take time, include lots of paperwork, and there is no guarantee that you will be given either.

• Beware of the differences depending on whether you're setting up a business as a sole proprietor or a partnership between two or more people.

Resources

• Read this Article in Spanish
• Register for Social Security
• Central Commercial Registry online form (Spanish only)
• Personal Income Tax Information
• Spanish Consulates in the US
• Online Business Registration Page