Frequently Asked Questions

Can I buy a freehold business?
These rarely come up on the market as the (mainly) Spanish owner consider the rental income to be their future pension.

What about a leasehold business?
These are the most common and are known as ‘traspaso’. Here the landlord owns the bricks and mortar and you own the rest. The lease term should not be less than five years. Ten years is common now. These should be ‘renewable’. The rent is normally agreed and fixed via a contract and can be only increased by the annual ‘cost of living’ index as published by the Spanish government. Your landlord can only terminate the lease if you fail to pay your rent!

Can I simply rent a business?
Whilst these opportunities are few they do sometimes come on a ‘try before you buy’ basis. This is often with an option to purchase the freehold built in. Deposits required are often large but normally refundable when the business is returned  to the owner in ‘as original’ condition.

What licences would I require?
All businesses must have an opening licence (Apertura) in order to start trading. In addition if you are running a bar or restaurant it must have a (Turismo) licence and you must have a ‘food handlers’ certificate. All these can be arranged by your legal representative. A ‘music licence’ may be required depending on where you buy your business.

What legal representation will I require?
It goes without saying you should never buy a business without professional help from a lawyer or fiscal advisor. We work closely with some of the best legal and professional people on Tenerife. As a guide you should budget around 1500 euros (£1000) for a normal business transfer. These fees are paid directly to your advisor.

What other cost might I incur?
At the point of the transfer of the business the landlord will require the first months rent plus another two months paid in advance. Insurance cover  for an average bar should be around 400 euros (£275).

What about the taxation system?
There are basically  two systems, one as we know it in Britain and another called the ‘modular’ system. The modular system can be a great advantage but this where you will need to talk with you  tax advisor

Can you recommend  a good bank?
Most banks on Tenerife offer a good service, we can introduce you to one where you will be able to open an account in a few minutes with the minimum of fuss. In terms of finance most banks will lend you up to 60% if you are buying a freehold business, however, will not finance a leasehold purchase.

What else should I know?
Wow! What a question.  Our best advise to you is to make contact with us and we will do our utmost to answer your questions, if we can’t, we probably know someone who can!