Ready-made business in Spain, what you need to know

Purchasing a ready-made business in Spain is an excellent solution for foreigners who have recently moved to the country and want to start their own business. This method avoids the difficulties associated with lack of market awareness, complex bureaucracy and language barriers, making it an ideal option for beginners.

The process of acquiring an existing business in Spain is called traspaso. It includes the purchase of a company brand, the necessary equipment, a complete package of documents with the necessary permits and licenses for doing business. In addition, the new owner gains access to the existing customer and supplier base, as well as a team of specialists.

As a rule, the premises in which a ready-made business in Spain is located is not included in its price. This is usually a leased space and the lease is simply transferred to the new business owner.

For foreign citizens, a significant advantage is the opportunity to purchase a ready-made business in Spain without the need to be a resident. Purchase conditions for non-residents are almost identical to those for local residents.

What type of ready-made business is available for purchase in Spain?

The most common types of ready-made businesses in Spain that are subject to the traspaso procedure include small and medium-sized enterprises of the following types:

• the shops,
• bars, cafes and restaurants,
• bakeries,
• hairdressers, beauty salons and spas,
• auto repair shops,
• hotels with quick payback.

Advantages of purchasing an existing business in Spain

Purchasing a ready-made business in Spain has a number of undeniable advantages, among which are the following:

Immediate start and profit. By purchasing an existing business, you can start earning money from day one, bypassing many bureaucratic difficulties. For example, starting most types of business in Spain requires various permits, such as authorizations and licenses, which can take several months and a lot of nerves to obtain. When purchasing a ready-made business, you receive a package of documents already completed and start working immediately.

By choosing the right business to buy, you can save money, time and effort on purchasing equipment, furniture and furnishings that are already included in the price.

Sometimes buyers of an existing business in Spain manage to reduce rental costs: during the renewal of documents, the new owner may not pay rent. Payments begin only from the moment the commercial activity begins.

Another significant advantage is tax benefits when purchasing an existing business in Spain. The buyer is exempt from property transfer tax. Moreover, if you continue to operate in the same sector as the acquired business, you are exempt from paying 21% VAT.

By purchasing a ready-made business in Spain, you also receive a team of professionals with experience in this field. Over time, you will be able to adapt the staff to your needs, but at the initial stage, having an experienced team is a significant advantage.

Before purchasing an existing business in Spain, you will have the opportunity to analyze the business strategy of the current owner, evaluate the efficiency and profitability of the business, as well as study its location and other important aspects.

You will also receive an already established client base, which will allow you to start earning money from day one if the company has a good reputation. If your reputation needs improvement, you can change the situation by updating your marketing strategy, remodeling your premises, or rebranding. Conducting a strong PR campaign notifying potential clients of the change of ownership and new positive changes will also be a useful step.

Disadvantages of purchasing an existing business in Spain

It would be wrong in this article to talk only about the advantages of buying a ready-made business in Spain and not to mention the disadvantages.

The main and, one might say, the only drawback of the traspaso is the price. However, this point remains controversial: there is still no consensus on what will ultimately cost more: buying an existing business in Spain or opening it from scratch. Although opening a new company will initially cost less, the costs of its development will gradually increase and may exceed the cost of the traspaso. It should also be taken into account that in the absence of experience in doing business in Spain, there is a high probability of making mistakes that can be costly. Thus, despite the fact that initially purchasing a ready-made business in Spain is more expensive, in the long run, traspaso may turn out to be more profitable, not only in terms of money, but also time and nerves.

Company reputation. As already mentioned, a good company reputation will provide you with a ready-made client base and the ability to make a profit from day one. If your reputation leaves much to be desired, you need to carefully evaluate the prospects: can you improve it and are you ready to do this? The previous owner must provide you with a loan

Purchasing an existing business in Spain: possible pitfalls

In order for a ready-made business in Spain to become a source of income and not a constant source of stress, it is necessary to conduct a thorough analysis and take into account several key factors before purchasing.

• Why is this business being sold? The reasons for selling an existing business in Spain can be varied: from the personal circumstances of the previous owner to the unprofitability of the business for various reasons (poor location, high competition, changes in external conditions leading to a decrease in profits, etc.). Before purchasing, it is important to find out the reasons for the sale and, if they are related to unprofitability, carefully analyze the situation to understand whether you can improve the situation and make the business profitable.
• Company reputation. As already mentioned, a good company reputation will provide you with a ready-made client base and the ability to make a profit from day one. If your reputation leaves much to be desired, you need to carefully evaluate the prospects: can you improve it and are you ready to do this? The previous owner must provide you with the company's credit and financial documents upon your request. If he cannot or does not want to do this, it is better to refuse the deal.
• Price. Before concluding a transaction, conduct research on the prices of traspaso of similar businesses in your chosen area. Usually the starting price is too high, so bargaining in such cases is quite appropriate.
• Team of employees. Before purchasing, carefully study information about the company's employees and their working conditions. This will help you avoid the risk of receiving unqualified personnel. In addition, Spain has strict legislation regarding the rights of employees. In some cases, you cannot fire an employee at your own request or you will have to pay a significant amount for it. Therefore, it is important to carefully review the personal files of all employees and the terms of their employment contracts to avoid unexpected risks and expenses.

To successfully purchase a ready-made business in Spain, it is recommended to contact experienced specialists in the field of real estate and law. They will analyze the company’s activities, check all the necessary documents, credit history, economic condition and personnel. The business will also be checked for debts, property disputes and difficult situations with employees. This is extremely important because when you buy an existing business in Spain, you take responsibility for all its debts, labor disputes and social security obligations. If during the purchase process circumstances are discovered that impede the conclusion of the transaction, you are required to return the deposit. You will only lose your deposit if you cancel the purchase without a valid reason.