Business help and advice

Of the increasing number of people coming to live in the Canary Islands, many want to start their own business.

Members of EU countries have an automatic right to run a business in Spain, often with no more required than a foreigners personal identification number (NIE). But this should not be taken to imply that it is easy to set up or achieve success in a business in the sun, running your own business anywhere will be hard work, day in day out and should not be undertaken until you are absolutely certain that it is exactly what you want to do, and that you have done everything you can to make the best possible start.

For example did you know (and can you believe?!) that 85% of people who are seriously thinking about starting a business in the Canary Islands do not have an accountant; only 3% fewer do not have a lawyer; more worrying, 80% do not have a business plan; and 75% have not arranged the finance! If you start off the right way, you will be streets ahead of the so called competition.

Any business that you establish will, however, need to be registered both locally with the town hall, which will provide an operating license and regionally with the Hacienda, or tax office, with which you will need to file your tax returns. Clearly, part of this process involves deciding whether to operate as a sole trader or as a limited company this is the S.L suffix after a business name though there is also the option to operate as a PLC this the is the S.A. suffix. You must be aware that your business can be inspected at any time and you will need to be able to provide any paper work requested (and for up to the previous seven years) so shortcuts simply cannot be taken.

You will, of course, need to pay taxes here the same has anywhere else! But you may be able to opt into a modular system whereby you pay a set quarterly amount of tax on a regular basis. You will also need to keep up to date books, and to submit paperwork to your gestor every month. A further requirement is monthly social security payments for yourself and any staff that you employ and note that if your employees have not previously worked in Spain, you will to obtain copies of their passports and forward them to your gestor along with their contract of work in your business. These fiscal and contributory payments will in all likelihood be made from a business only bank account and this account’s statements will need to be included in the paper work that’s sent to the gestor and he or she will then take care of the numerous forms and allowances that may apply to your particular business activities.

And finally, if you decide to sell your business, you will an estate agent that’s well versed in business matters and one that has a large number of clients seeking to buy a business, as well as a significant reputation for honesty and honourable dealing after all this is a business that you are selling!

So, if you’re thinking of buying a business in the Canary Islands or indeed it’s your wish to sell a business, please don’t take risks and talk to the specialists contact David Wood at Woods the Estate Agents email davidwood@woodstheestateagents.com