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A guide to buying commercial property in Spain

A commercial property in Spain to set up a business has become relatively easy nowadays. However, do be careful. Unfortunately there are too many rogues in Spain that will be very keen to rob you of your life savings. There are even unscrupulous agents that will sell you illegal bars! We see new agents come and go everyday. You must also be aware that Spain is very different to Britain and there are very different laws and taxes relating to your purchase. The advice that we offer here is by no means exhaustive, so as always we highly recommend the services of a solicitor.

Buying a commercial property in Spain

There are lots of business opportunities in Spain and there are ample successful businesses to be found. These range from bars, restaurants and shops to watersports businesses and hotels. The law for buying a commercial property in Spain for business is a little bit complicated at times, so caution must be exercised and professional help sought. If you want to buy a commercial property in Spain, to run your own business, you must have an N.I.E. number (this is a number identifying foreigners). You can obtain this free number from the National police station.

The majority of businesses in Spain are sold on a leasehold basis. This means that you will pay a lump sum for the lease. The lease can be anything from five to twenty-five years, although they can normally be renewed at the end of it. During the time that you are the leaseholder you will pay an agreed amount of rent to the landlord. This rent can only increase by the rate of inflation, every year until the lease is due for renewal. At this point the rent can be raised by 20%. During the time of the lease, you will also be responsible for the service charges on the business.

These may include:

Council taxes and terrace tax in certain areas
Electricity
Gas
Water

Your own taxes and social security payments

Whilst you hold the lease you can also sell the lease to someone else for whatever price you can raise. You will normally have to offer the lease to your landlord first, providing that he pays the going rate. When you sell the lease you will normally have to pay a commission to the landlord. This is normally 20% of the 'declared' sales value.

As the leaseholder there are certain laws you must obey:

You are responsible for the licensing of the business.
You cannot structurally alter the building without the owners permission.
You can not sublet the business.
You must give the landlord a security deposit of two month's rent and then your rent will be paid monthly, in advance.

You will have a lease contract that will outline all the terms. Most are standard but your lawyer will examine the contract and translate it for you.

Set-up costs

When you purchase a commercial property in Spain, you must allow for the following set-up costs: A 10% deposit will be required to secure the purchase. The balance is usually payable within thirty to sixty days.

Your legal fees will usually be around 2,500 Euros; this includes a professional lawyer, the transfer of the business, change of name on the licence, social security registration and everything you need to do to be legal. Your landlord will require three months rent (two of them are a returnable deposit).

Licensing

The local authority insists that all businesses in Spain be licensed. A bar may have a bar or bar/cafe licence or even a special full music licence. It is the agents responsibility to inform you whether a licence has been granted or not. If you have live music, you will also need a music licence. All businesses are registered with the local council and a small tax is payable monthly for this registration. We recommend that you use a solicitor with all purchases and he will ensure that the licence is in order.

Part of the solicitors' job is to check that there are no debts on the business either .

Connecting to service

It is relatively easy to get connected to the services once you own a commercial property in Spain or a leasehold business, or if already connected, to change the name on the account. The solicitor can help you with all this. In most cases all you need is your passport number. The Spanish telephone company 'Telefonica' charge about 200 Euros for installing a telephone.

If you are interested in purchasing a business in Spain, just fill out this form.

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