My advice to anyone who is contemplating going into business in Tenerife, would be to seek professional advice from someone who is highly recommended in this sector. When looking for advice you will come across the word Gestor.
The equivalent position of a Gestor does not exist in the UK, but probably the best way to describe this job position would be an administrator; someone who is familiar with the Spanish administrative bureaucracy and has all the right contacts.
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Choosing a Gestor
A Gestor is a good option if you are planning to open a small business with none or just a few employees. If your business expands, you may have to deal with a ‘Contable’ – a licensed professional accountant if your Gestor can no longer deal with your business accounts.
Some Gestors work from the same office as a Contable and Abogado - (the nearest equivalent to a solicitor in the UK), so if you are planning on opening a big business, this is something to consider from the beginning.
It is well worth looking around until you find a reputable one who you feel comfortable working with and always make sure you ask for an estimate of costs too so that you have everything within your budget.
The inability to speak Spanish can sometimes present certain difficulties and there may be times when you have to rely solely on your Gestor, so choose carefully. Many are multi-lingual so that should make things easier.
I also strongly recommend that you consider learning basic Spanish. Even if you only learn the most used words relating to the line of business you are in, it will always be an advantage to you and needless to say, very useful if you can read and understand official documents.
Business Preparation & Options
Once you have your business plan and finances accounted for, you should consider choosing which legal business structure is most suitable for your new business. There are several options to consider and each one has different legal and fiscal responsibilities, i.e. Sole Trader, Partnership, Public Limited Company, to name a few.
After choosing a name for your business, you may want to register it with the Spanish Patent and Trademark Office, this is optional, but by doing so, you have the right to use the name for commercial purposes.
Location & Premises
Once you've chosen a location, you’re next step would be to look for premises that suit your business needs. You have several options to bear in mind:
Purchasing the leasehold of an existing business, usually includes the fixtures, fittings, stock and goodwill. You can change the furnishings and decor to suit your business, but cannot carry out any works, which would alter the main structure of the building. You would have a monthly rental payment and a relatively long-term contract.
With this option, not only do you purchase the fixtures, fittings etc., you also purchase the building. This is obviously a more expensive option, but you have the advantage of carrying out any structural changes to the building too. If taking over an existing business, it is essential that you carry out the necessary checks to ensure the business in question has all the current licenses and permits in order.
The local council can tell you if the business has an existing opening license. You should also check with the regional government to make sure you have all the up to date requirements. This is where your Gestor will come in handy with help in finding out if there are any outstanding debts and possibly find out why the business is being sold.
Probably the most economical way to get started, depending on what sort of premises you need for your business. You could rent an empty local and start from scratch, although you must account for set-up costs including opening permits; or you can opt for an existing local, which is fully fitted and furnished and adaptable to your business activity.
You would normally be charged anything from 2 to 6 months rent in advance as a deposit. Remember, when dealing with your landlord, it’s advisable to have a good level of communication in order to negotiate all the essential information that is necessary to agree on within the rental contract.
Depending on the nature of your business you will have to register in the following places: Spanish Inland Revenue, Canarian Government, Social Security, local Town Hall and the Provincial Directorate of work.
You also have to consider accounting for monthly payments such as: Rental fees, license fees, Social Security payments, Gestor´s fees, wages, utility bills, tax returns (quarterly). Also, if your business involves food handling, you will need to obtain a food handlers certificate.
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If you are planning to register as self-employed you will be interested to know that new regulations have been released for self-employment contributions. A new regulation came into effect from 01/10/13 and comes under the law ‘ley14/2013 - Apoyo a emprendedores’.
You could be eligible for a good discount for the first 18 months contributions if you haven't been registered as self-employed here within the last 5 years and don’t have employees. This is a great opportunity to help you get started and leverage the time to get the business up to speed.
Please bear in mind that the above is only a very brief summary of the business startup process and I will finish as I started, recommending that you always seek professional advice before you make the first step towards your new business in Tenerife and remember to browse our Tenerife directory to see the types of businesses proving popular on the island.
For more information and advice about setting up a business and being self employed you can contact Lindsay Schewalie on Facebook.