Residents guide to opening a business

[fifi]

This article may be of interest to residents who are thinking of opening a business on the Islands.




Residents Guide – How to start a business


CIF Number:

The first thing you need to do is register your company so you need to apply for a Codigo de Identification Fiscal this is commonly referred to as a CIF number. and identifies a new company for tax purposes. To apply for this a company representative should contact the Tax Authorities Office the Delegacion de Hacienda of the Agencia Tributaria.

Documents Required:

    Official form 037 -Fully completed and signed by a company representative or by one of the members who has signed the application for a Negative Name Certificate made to the Central Companies Registry.
    Copy of the Draft Deed of the incorporation of the company Identity Document.-By the signatory of the application or if the signatory is not available then by the power of attorney. This will grant you a temporary CIF which is valid for six months.

POINTS TO NOTE:

    Every business has a unique licence.
    Some businesses need several licences, eg supermarkets, food, drink, cigarettes.
    All businesses need an application for an Opening Licence before you may begin trading.
    Application fees vary depending on which municipality you need to apply to.
    After application the local tax for the licence (IEA) is paid annually to your Town Hall.
    If you want to trade all over an island you need a National Licence.
    Expect other requirements eg music licence for bars.
    Only an opening licence makes a business legal. When buying a business check this is held.
    Rental Contracts for businesses need to be treated with extreme caution check all landlord rights.
    Do not buy a business without having it notarised at the Notary Office.
    Check the Town Hall will allow your premises to operate your chosen venture.
    Unless you can read Spanish do not proceed without a professional. Business ventures are always risky be vigilante and cautious and use the services of a good abogado. (Lawyer)

BUYING A BUSINESS:

Do not hand over any money until you have seen copies of the following documents:

    The Opening Licence – Indicates exactly who own the business and if they have the right to sell.
    Rental contract for premises. – Shows existing tenants rights and if he is allowed to transfer rental contract. This is rare and the owner of the premises has the right to increase the rent and take a percentage of the leasehold exchange.
    An electricity contract.
    A telephone contract.
    Basura in Alta refuse collection agreement.
    All licences necessary for trading.
    Copy of the contract of sale.

Any money to be paid should be paid by certified cheque and handed over during the exchange at the notary office where the seller should hand over all the documents to formally transfer ownership to yourself.

NOTE:

To ensure safety in business and protect yourself from possible fraud it is always better to use a registered law firm. Caution could prevent the loss of potentially large sums of money.

[SheilaW]

You can also set yourself up as a self-employed business person (autonomo) in some cases. Then you won't need a CIF etc., as those are only needed for a Limited Company.

[fifi]

Thanks Sheila.  Also, inorder to encourage young entrepreneurs the Gobierno recently announced that  male Autonamos under 30 years of age and females under 35 would only have to pay €50 per month. http://www.empleo.gob.es/es/estrategia-empleo-joven/medidas/autonomos-emprendedores/tarifa-plana-autonomos.htm

Google translate version. .... http://translate.google.ie/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.empleo.gob.es%2Fes%2Festrategia-empleo-joven%2Fmedidas%2Fautonomos-emprendedores%2Ftarifa-plana-autonomos.htm

[Spike On Q]

DON'T!

[growers:)]

Why spike?

[Spike On Q]

The economy is so depressed here at the moment there is little disposable income to generate any sort of sales in a new business

Many old established business with solid client bases continue to disappear every month so that a new venture that needs to generate sales to new customers must be questionable

With large numbers of Red Cross parcels being delivered to out of work citizens, unemployment statistics being as they are, frightening, especially for people under 25 and the local banks still struggling with millions of Euros of bad debt and repossessed properties with no value making up their balance sheet in danger of collapse, any investment in time and money on a new venture should take these matters into consideration

[potash]

With all that bull sh-t  to go through no wonder no one can be bothered to set up a business there, no wonder no one can get a job the poor person setting up a business has his hands tied before he can earn a crust to start paying these silly fees. Only the so called  civilised countries could dream up a situation where the employer is taxed to employ people. No wonder the eu is going down the pan anyone with the guts to start up a small business forced to pay a tax on employing someone collect paye and vat for nothing and if late paying they fine you. the whole system is doomed its just not worth the effort.