Many people starting a business in Spain find premises to lease as their first step and then pay a lump sum for the Cesión (the lease formerly known as the Traspaso). If you are taking over a lease from a current leaseholder, as opposed to the owner, the owner obviously has the right to re-negotiate the Cesión when the lease is up - in other words you could make this 'good-will' payment twice and at varying and unpredictable amounts. If you lease directly from the owner you have first refusal for renewal and you can negotiate in the original contract that there is no Cesion for future terms of the lease. If, at a later date, you wish to sell the business and lease the owner has first refusal to purchase at the same price that you are offering any other prospective buyer.

The next step is a Licencia de Apertura (Opening Licence) granted by the Ayuntamiento. This can take some time and may require other licences such as Certificado de Manipulador de Alimentos (Food Handling Certificate).

Whether you are opening a restaurant or travel or property business, and employing people, or working on your own as an IT consultant, electrical engineer or dog groomer; you will need to register as a Trabajador Autónomo (self-employed worker) and register your business for the Impuesto Sobre Actividades Económicas (IAE – formerly known as the Licencia Fiscal).

There are advantages to being a correctly registered and licensed business:

1. Probably zero tax to pay on the business for a good number of years
2. Tax breaks if you employ the young, old or long-term unemployed
3. Your business will not be shut-down by the authorities over night
4. You will not face substantial fines for operating without licenses

Red Tape can advise on whether there are advantages to you running a Sociedad Limitada (SL - equivalent to a limited liability company in the UK) or a Sociedad Anonima (SA – equivalent to a public company in the UK) or a Sucursal (a branch office of your UK business). We can also help you appoint accountants and complete all documents for the registration of payment of Módulos (quarterly estimated tax system run by the Tax Agency which is obligatory for the first year of trading).

Let Red Tape tie up a solution today

Contact: Jose Ensenat on 661 341 568 or at jose@redtape.es