Some Tenerife Business Questions...
- Moving to Tenerife
- Health Care
- Other Costs
- Legal Help Costs
- Rental Businesses
- Leasehold Businesses
- Freehold Businesses
Moving to Tenerife
There are many companies specialising in overseas removals and we will be only too pleased to arrange a quotation for you. As a generalisation allow £300 per cubic metre door to door.
There are no restrictions as to what you can bring with you. All UK electrical goods will work on Tenerife simply by changing the plug. Do bring your satellite system with you, it will work fine with an 130/140cm dish but note you must retain a UK address and bank account for the subscriber card. The movie channels cannot be received in Tenerife.
Pets can be brought over by road or air without quarantine providing you first obtain an export certificate and vet's endorsement.
It is generally considered best to sell your car in the UK and replace with one bought locally on Tenerife due to the impracticality of right hand drive vehicles and the cost of changing to Spanish plates which is compulsory once you become resident.
Of course, there will be 101 other things you may wish to know. Rest assured that having had several years experience in Tenerife we will most likely have the answers, or at least know where to find them.
Remember that it is also very much in our own interest that you settle as smoothly as possible and that you will be impressed with our service - we rely on you for recommendations.
We recommend of course that you make the effort to learn some basic Spanish but in practice most business people, doctors, suppliers, etc. on Tenerife speak perfect English so it is not essential.
Whilst convenient to newcomers it is sad in a way that English is so widely spoken as it does encourage us to be lazy and not bother to learn. Most towns and resorts hold evening classes in the local schools over the winter months to encourage us and the courses are free!
You should never encounter any hostility from the Spanish people as to the fact you are a foreigner, in fact we would say it is exactly the opposite. You will soon make Spanish friends and be invited to join in their family activities.
Standards in the Spanish state schools are high. As with the health care it is free except for a nominal charge for exercise books, etc. Younger children are best enrolled into this system and usually adapt to the language and make new friends very quickly, in all probability there will already be a number of British children in the class.
For older children already in the GCSE system there is a choice of British schools in Tenerife teaching the British curriculum.
Pass levels and university entrance selection are well above the national UK average.
The Spanish National Health service is generally acknowledged as being excellent and is free to foreign residents, business owners and their families paying into the social security system.
This is compulsory to all business people working on Tenerife whether foreign or Spanish and the monthly cost is approx 250€. Should you also wish to go private, there are many companies offering excellent cover at around 50€ per person monthly.
Rarely do businesses on Tenerife have accommodation attached. We generally recommend that you initially rent an apartment or villa before buying.
Prices vary from one area to another and also depend on the position, i.e. front-line or country, but as a guide a reasonable 2/3 bedroom furnished apartment with swimming pool should be €700 to €900 per month and a 3/4 bedroom villa starting at €1,000.
Allow one months deposit and the first month's rent in advance.
A breath of fresh air when compared to the UK. We need to discuss with you in person when you arrive on Tenerife.
We can open a new account for you in just five minutes - all we need is a copy of your passport and a UK address. Sterling transfers from your UK account to Tenerife take 2/3 days and will be converted into Euros at the exchange rate of the day. Alternatively we can recommend a currency exchange company to get you the best rate possible on the transaction.
Spanish banks will often lend up to 60% on a freehold property but will not consider financing leasehold or rental properties. We can however sometimes negotiate private terms direct with the seller of a business although you must appreciate he has little in the way of security once he signs it over and so will naturally be cautious.
Be wary of the numerous loan companies advertising in the UK press who promise everything on the basis of receiving an advance payment from you. The only way you can arrange finance on a business purchase abroad is by securing your UK property.
In addition to the purchase price of a traspaso business and your legal fees, allow two month's deposit and the first month's rent in advance. Sufficient working stock is normally included in the sale price of a bar but if not allow up to 1,000€.
Suppliers offer discounts on beer etc, they are always keen for new business so you can negotiate a good price for your stock and often get fridges, umbrellas and other perks added in. Insurance cover with a company such as the Royal Sun Alliance for an average bar should be no more than £400 p.a.
Note that Business Finder Tenerife are reimbursed their expenses by the seller - there is no charge to you, the buyer for our services.
Legal Help Costs
Do not attempt to buy a business without professional help from a qualified Spanish lawyer or fiscal advisor - the pitfalls are too many, as they are of course in any country. Beware the local bar owner of a few months in residence who knows it all - listen to everyone by all means but take final advice from a professional.
Business Finder Tenerife work only with the best legal people on the island and recommend them purely for the quality of service they supply to our clients and for no other reason.For a normal business transfer, for example a small bar, it is best to allow approximately 1,500€ for legal charges plus local taxes & town hall charges which you pay direct to your lawyer.
Your legal fees will include the new lease contract on the premises, licence transfers, your tax and social security registrations and your registration with the tourist board. In short every piece of paper you require to take over and run a business in Tenerife.
Should you wish to make your own completion arrangements we will help obtain all existing documentation appertaining to the business and pass on to your chosen lawyer.
We could write a book on this one! Briefly all businesses in Tenerife must have applied for an apertura or opening licence in order to start trading. This is obtained when the local authorities approve a proyecto (Project) submitted by a qualified architect/engineer of the premises and installations and can run to over 100 pages of specifications and plans. Final approval is given upon inspection by the authorities that all the regulations in force at the time have been met.
In addition to the above, if the business is a bar, club or restaurant it must have a turismo licence, and the owners a food handlers certificate. Music licence requirements vary from one resort or area to another and can sometimes be quite stringent.
Some local councils insist that sound limiters are installed to control the volume of music played, and others more casual with the attitude 'f nobody complains it's OK. Note the apertura and turismo licences belong to the business itself and not the owner.
These occasionally appear on the market and the contracts are normally renewable on a year to year basis with an option to purchase the freehold built in - Try before you buy. Deposits required are often substantial but refundable upon the return of the business to the owner in the original condition found.
This is the most common type of business purchase in Tenerife , and is known as a traspaso. The landlord owns the building shell, you own everything else unless stated. The term of lease shouldn't be less than five years and can sometimes be for an indefinite period. Five years is normal these days and can usually be renewed for another term without payment of a further premium.
The rent is fixed in the contract and can thereafter only be increased by the annual cost of living index as published by the Spanish government. Important differences to your benefit between a traspaso and the British lease equivalent concern your position if the lease is broken. In the UK you can be held responsible for the full term regardless of what happens, in Spain you need only give two months notice and can then pass the property back to the landlord.
Should you decide to sell / transfer after a few years, the landlord will normally agree a new lease term to the buyer as per your original contract (i.e. 5 years) rather than the balance of the years remaining. The landlord cannot terminate the lease for any reason other than non-payment of the rent and this only via the court system which can be rather slow.
Rarely come on to the open market (The Spanish consider the rental income as their pension, or for the children to inherit). If a bargain comes up, buy it quick. Allow an additional 8% to10% of the purchase price for transfer taxes, legal and notary fees.