Do you feel like you’re finally ready to be your own boss in a country far from home? Or maybe you’re just sick of the 9-5 job and are looking for a change of pace. Spain is the perfect getaway for those who want to purchase an already thriving company.
With its Mediterranean atmosphere, world-renowned cuisine, and stunningly beautiful landscape, what’s not to love? Buying a company in Spain is the best decision if the thought of starting a company from scratch sends a shiver down your spine. It’ll be a great way to get your foot in the door of the business world, provided that you do your due diligence and know what to look for.
But before you jump on the first plane to Barcelona, you should know a few things about buying a company in Spain. Here’s a complete guide to everything you need to know about the process, including why Spain should be your top choice for business ownership.
Why Buy a Business in Spain?
One of the reasons why you should consider buying a business in Spain is that you’ll be inheriting an entity with an already established customer base and revenue stream. This is especially beneficial if you’re looking to enter a given niche market that is already competitive.
Another significant advantage of buying an existing business is that you’ll have access to a team of employees who are already familiar with the company’s culture and operations. This can be a major time-saver, as you won’t have to train them from scratch.
Not to mention, buying a business is often seen as a less risky venture than starting one from scratch. You’ll be able to observe the company’s financial records and performance over a period of time before committing.
And if Spanish life is what you’re after, purchasing a business in business is a great way to immerse yourself in the culture and make long-lasting connections. Since you will now have a long-term project to grow your newly acquired business, you’ll likely form closer bonds with the locals. And before you know it, you’ll be speaking Spanish like a native.
Spanish Business Market
There’s no doubt Spain’s business market is booming. With a GDP of USD 1.4 trillion, Spain is now the fourth largest economy in the European Union. Spain’s economy recorded a growth rate of 5.1% in 2021, a huge comeback from the 11% decline in 2020.
If you’re considering buying a company in Barcelona, go forth with your decision confidently because statistics indicate that the Spanish business market will grow at a rate of 3.3% by 2023. Two sectors doing exceptionally well in Spain are tourism and real estate. So it would be best to spend your money on companies in these two sectors when buying a Spanish company.
Here is a closer look at these two markets.
The Spanish Tourism Market
If you thought that the tourism sector in Spain died with the pandemic, you’re sorely mistaken. The Spanish tourism market is still strong and has already grown by 88% of its pre-pandemic size.
In 2022, Spain is the fourth most popular destination for tourists after countries like Mexico and Greece. Tourists love the fun in Tenerife, Mallorca, and Ibiza, which is why these are some areas with a high number of visitors.
Visitors come from all over the world, including France and Britain. Domestic tourism has also increased significantly in recent years.
All these factors make the tourism sector a safe investment in Spain. You can buy a restaurant, bar, or hotel and be confident that it will generate revenue in the coming years. Purchasing a company that’s involved in this sector will give you a chance to enter a market with immense growth potential.
The Spanish Real Estate Market
If you’re looking for an even safer investment, the Spanish real estate sector is where you should put your money. The market has been doing exceptionally well recently and is only expected to grow further. For instance, at the beginning of the year, property transactions increased by 24% to reach 53,623.
There’s a fascinating trend where the number of foreign buyers is rising. This means that people from all over the world are interested in purchasing property in Spain.
The Spaniards are also hunting for their dream homes as the country’s economy continues to grow. The growth is good news for you if you’re thinking about buying a company that’s involved in the real estate sector. With more and more people wanting to purchase property in Spain, your company is sure to do well in the coming years.
Alternative Businesses to Consider
Real estate and tourism aren’t the only sectors you can invest in when buying a Spanish company. If you’re looking for something different, here are some other businesses to consider:
- Recycling companies
- Food delivery companies
- Technology and internet
- Financial and legal services
No matter which sector you decide to invest in, you should ensure that you get the buying process right. This is where you should pick up the phone and call an experienced attorney or an accountant who can help you with the purchase. They will be able to guide you through the following processes:
The Buying Process
Finding a Spanish company for sale that piques your interest is only half the battle. The other half is knowing how to go through the process of making an offer, negotiating a price, and submitting a non-binding letter of intent (LOI) to the seller. It’s important to have someone on your side who knows the ins and outs of this process because it can be quite complicated.
Conducting Due Diligence
This is an essential step in the process because it allows you to verify that the company is worth the price you’re paying. You’ll need to review the financial statements, contracts, and other legal documents related to the company.
Understand Tax Implications
The first thing you need to do is figure out the tax implications of buying a company in Spain. If you live in Spain for over 183 days, you will be considered a tax resident. You will pay a different tax amount if you have this status than if you have a non-residency tax status. In addition to your residency status, your tax burden will depend on your business income.
To avoid overpaying or underpaying and putting yourself at risk of an audit, you must understand all of the factors. A professional will help you understand your tax status and make sure you’re paying the right amount of tax.
Running Your New Business
Once you complete all the necessary steps and acquire a company in Spain, it’s time to rev the engine and get the business running. This is where you’ll need to put your business ownership skills to the test. When running your business, you will need to do the following:
Get the Right Workforce
To run your business effectively, you need to have the right workforce in place. This includes employees who are skilled and experienced in the industry. In addition, they should also be able to work well together as a team.
If you need to hire non-EU talent to work for your company but don’t know where to start, consider working with companies that specialize in this area. They will be able to handle the visa process and help you find the best talent for your company.
Develop Operations Manuals
If you want everyone to be in the same boat regarding company procedures, you should develop operations manuals. The manual will outline the company’s methods, processes, and standards. Once you have these in place, it will be easier to train new employees and improve efficiency.
You’re still so new to this business ownership thing. The last thing you want to do is get on the wrong side of the taxman. Make sure you’re up to date on your taxes and are paying the right amount. This includes VAT, corporation tax, social security gains, and income tax.
Failing to pay taxes can result in hefty fines and jail time. Get an experienced accountant to help you with your tax obligations.
Create a Marketing Plan
You need to let people know that your company exists and is the best in the business. The best way to do this is to create a marketing plan. The plan will outline your target market, what type of marketing messages you’ll use, and how you’ll get the word out about your company.
Buying a Business in Spain with AvaLanding
When looking for a business for sale in Spain and determining how to run it, you need a reliable professional by your side. It would be better if the professional had experience in identifying business and investment opportunities in Spain. This is where AvaLanding comes in.
Our team of lawyers, economists, real estate professionals, accountants, and relocation specialists excel at helping foreign investors successfully launch their businesses and life in Spain. AvaLanding will be your local partner to help you search for companies to invest in in Spain.
We will offer you the immigration advice you need and handle all related matters, including helping you hire non-EU talent to work in your Spanish company. We will also be your tax consultants to ensure you comply with Spanish tax laws. Get in touch with us today to learn more about how we can help you buy a company in Spain.