Buying a Business on the Costa del Sol

Even in these times of uncertainty, Spain is still attracting people from all over Europe and further afield due to its climate, culture, etc… But what to do once in Spain? The lucky few retire and live a life of idle luxury that has helped give the Costa del Sol the moniker of the “Florida of Europe”. The rest of us have to work though! For this article though I am going to look at those who plan to run a business in along the Costa del Sol.

For those of you reading this article and are EU citizens, you will be happy to know you are free to start a business here at any point. If on the other hand neither from an EU country nor are you part EEC, you will have to acquire a ‘residencia’ prior to opening a business.

Like most locations, the success or failure of the business is going to be down to you. Many potential business owners come to the Costa del Sol with a pre-conceived idea of the sort of business they will run and location that they want to be in. Without on the ground knowledge this can be dangerous, and has been proven so by the amount of individuals who have failed in Spain. This is not to say that you will not be part of the minority who were and are successful, just that the roads are no more paved with gold here in Spain than they are in your home country.

First you need to have a realistic outlook on what sort of business you can buy and where it is located. With a budget of 30,000 Euros, you will not be setting up a business overlooking the port of Puerto Banus. You must be flexible in choosing an area where you want to run your business, as you will be planning your life around this core decision. Remember certain areas may have less glamour but offer you all round trade while other areas will offer that tourist clientele but be very seasonal.

Setting up a business in Spain really is no different than anywhere else in the world. Is there demand for the service or product you intend to sell? What sort of premises do you require? Will you be dependent on one segment of the market or several? Who or what is your competition? And so on.

So what are your options when buying a business?

You can rent commercial premises and take over a business or start your own business. Although the lowest cost option, the long term benefits are lacking as you have nothing to sell on.
The second option is to buy a leasehold. Unlike a simple rental, there is a fee for taking over the business/premises. The advantage here is you will normally have a contract of normally a ten year period. You also have the option of selling the leasehold down the line. In many cases successful businesses sell for a high price due to the success of the existing business.
The last option is buying a freehold. Here you buy the property itself. Although paying a premium, financing is possible through banks, etc… You would also have the option of leasing the premises and generate an income for yourself.

As a business you will have to decide whether to set yourself up as a sole trader (empresa individual), a partnership (sociedad civil), a limited company (sociedad limitada) or a public limited company (sociedad anonima). Each will have certain costs and benefits. This is why specialist knowledge is needed in this field through a gestoria.

In fact a gestoria will arrange all your requirements including changing/applying for relevant licenses, registering with the tax office, dealing with the town hall, etc…

That’s it for now, hope this has been helpful

Andrew Belles

Find a business on the Costa del Sol

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2 Responses to “Buying a Business on the Costa del Sol”

  1. steve says:

    Hi Andrew
    great blog but can you tell me the pros and cons of leaseholds and freeholds please

  2. Andrew says:

    Hi Steve,

    this article might be of interest

    freehold or leasehold


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