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 Post subject: Setting up a business
PostPosted: Tue Jun 14, 2016 9:08 am 
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Joined: Fri May 08, 2015 8:34 am
Posts: 26
Hi,

So I've posted here previously regarding making the move over, but at the time and due to some reflection we decided to hang fire as our initial idea was to move over with savings and the money from a house sale, rent somewhere and try and find work

The reason we didn't go ahead was due to the 35% unemployment we were told there was so didn't want to be out of work and see our savings depleted then end up coming back to the UK with nothing left at all

Meanwhile I've been studying Spanish as I was told this would be a plus as my Spanish was very basic at the time

So on working things out properly we thought we would look to set up a business instead so we could be more self-sufficient, not reply on finding work and struggling on, plus potentially working the hours that really would not suit us

We have a few ideas which we need to plan out in their entirety, but I could do with some advice on the following :

    What is the best way to get stock - what I mean by this, is it better to import from the likes of mainland Spain, or visit the islanders? If it is better to visit the islanders, are there wholesalers or job-lotters? I know this may be a bit vague as there could be different types of products you can buy, but I just want to get a general feel

    When getting a premises or land to put premises on, where do you find these? For example, if I wanted just a plot and put a stand of some sort on it with seating and tables what are the rules around these types pf places or where do we get this information from?

    Do you have to run your business through a business account in Lanzarote like you do in the UK?

    What are the usual costs to look out for when setting up? Such as taxes, fees, registration etc

    Are there any pitfalls that usually happen to new ex-pats setting up - what I mean by this is locals bad-mouthing/sabotaging due to competition/any underhand stuff that gores on? I know this rarely happens in the UK but I don't know what the business world is like in Lanzarote

    I understand there are 3 main families which basically make up all the rules on the island - is this true?

Sorry for asking away if the questions are a bit vague but we need to get some good information and work out what we can as we want as little left uncovered as possible

Thanks !


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 Post subject: Re: Setting up a business
PostPosted: Tue Jun 14, 2016 11:19 am 
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Joined: Thu Jun 14, 2012 7:30 am
Posts: 541
As a former business owner here I will try to reply to your questions....
Learning Castillian Spanish good.......understanding Canarian Spanish (closer to South American dialect as opposed to mainland ),,,can be difficult..they will understand you...not so easy to understand them :?

Unemployment still around 30% even though the island is full of tourists :wink:
Stock...depends what it is ..anything sourced outside the islands will attract customs duty (varies according to what it is you import ..but figure on 20%.)...plus the local Vat Known as IGIC which varies between 7% to 13% again dependant on what you import.Sourcing locally could be a problem as if it is not food/drink or a locally produced item(s) then you will struggle. :(
You cannot open a business without a licence from the local council...costs vary according to which licence you require...and as to setting up a stall on land...big no-no- ...you simply would not get permission :!: ...even market trading requires proof of tax registration,proof of social security registration proof of residency and proof of empadronamiento .(.local council registration of abode)...before they allow you on a waiting list for the next available stall :cry:

Costs of going self-employed are some of the highest in the EU.....autonomo( self -employment) social security payments start at 260€ per month ...and go up (and up ..and up )...then add taxes at around 20%----and all this has to be paid whether you are earning or not...from day 1 :shock:
Business here can be a bit ´´cut-throat´´´though fellow Brits/Irish are far worse than any local for undermining you ..especially if in competition locally :roll: ...make sure all your licences are in place and that everything is totally legal ( paperwork wise ) or you may come unstuck very quickly :?

There are in fact 7 or so inter-related families who have fingers in many ,many ,pies here...but they are not the problem unless you make it one :oops:
Sorry to be a bit vague ..but without info on what you intend to do or sell (AND do not post it on here...or by the time you get here there will already be established competition :roll: )....keep your plans and ideas to yourself :evil: )

Buena suerte 8)

OOps sorry missed out on business accounts....advisable to have one as if you miss a payment to any official body, they can and sometimes are ,´´embargoed´´..in effect ´´frozen´´ until you pay up...also costs of banking here....no such thing as a free bank account in Spain..and business accounts will be more expensive than personal ones :( ....like always... I try to end on a good note.....lol :lol:

Edited later ++ forgot to tell you that import anything you will need a Spanish Govt issued EORI number ...more costs and much more paperwork (they love that here !!) and also the yearly costs of an official accountant and for at least the first year a ´´gestor´´ (translator.paperwork person) until you get the hang of it.


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 Post subject: Re: Setting up a business
PostPosted: Tue Jun 14, 2016 12:50 pm 
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Joined: Fri May 08, 2015 8:34 am
Posts: 26
As always lanzalocal thank you for answering my questions - very informative given the vagueness of my questions

What business did you operate here and why no more?


Just to summarise :

Local VAT (IGIC) which varies between 7% to 13% to pay on all items is it? - Assuming you pay this even if not importing?

Sourcing locally OK if food/drink or a locally produced item(s)

Opening a business requires a licence from the local council (costs vary)

Setting up a stall on land - Not possible - Assuming you have to find an empty shop unit or similar then or land that is designated for business use?

Costs of going self-employed starts at 260€ per month Plus taxes at around 20%

Plus business accounts. at a cost (I assume monthly cost/fee?)

Yearly costs of an official accountant

For at least the first year a "gestor" (translator.paperwork person)

Anything sourced outside the islands will attract customs duty - but figure on 20%. - Plus Spanish Govt issued EORI number required if importing.


Question though - What if you have an idea that no-one else is doing on the island that requires a small piece of land to be used or converted? Nothing ground breaking, but something that would probably enhance the surrounding area? Is this still a no-no?


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 Post subject: Re: Setting up a business
PostPosted: Tue Jun 14, 2016 6:53 pm 
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´´Question though - What if you have an idea that no-one else is doing on the island that requires a small piece of land to be used or converted? Nothing ground breaking, but something that would probably enhance the surrounding area? Is this still a no-no?´´

Problem is ..this is a very regulated island ..due to the planning and land usage laws laid down by Caesar Manrique and adopted island- wide by all local authorities.....there is not a snowballs chance in hell of getting permission for new business land use...unless prior permission exists( the authorities have closed more than half the markets there used to be as they did not /could not comply with current regulations etc)..but best asking whichever municipality you intend to trade in whether they might be open to a ´´possible´´ tourist attraction if it fits in this category
.sorry :(
Finding empty shop units is easy....plenty about(just check local estate agents )...unless you want it in a touristic location....then expect them to be few and far between ,,,and to cost a small fortune to rent.
Every item sold here attracts IGIC at various rates now
Accountants vary according to what you want them to do....basic tax return and yearly accounts start from around 750€ plus IGIC
Gestors charge per service...starting around 60€ for an hour translating, oh and of course plus IGIC on top :(

As to my businesses they were a bar (wet sales) then a cafe/bar owner( Food and wet sales) managed to offload them, so now retired from the standard 60+ hour working week ...phew :D

Edited much later.....Just in case you wondered...Worst business decision....deciding to set up in probably the most restrictive , awkward and self-employed unfriendly business area in Europe :roll:
Best business decision...finally getting rid of them :lol: ,,,,,True story :wink:


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 Post subject: Re: Setting up a business
PostPosted: Wed Jun 15, 2016 12:31 pm 
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lanzalocal wrote:
Just in case you wondered...Worst business decision....deciding to set up in probably the most restrictive , awkward and self-employed unfriendly business area in Europe :roll:
Best business decision...finally getting rid of them :lol: ,,,,,True story :wink:



:D

Nothing like trying to scare the life outta me before I even start ! :D

Was it worth it just to live there ?? Honest answer !


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 Post subject: Re: Setting up a business
PostPosted: Wed Jun 15, 2016 1:14 pm 
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Joined: Thu Jun 14, 2012 7:30 am
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Honest answer.....there were some good bits....but probably some very bad bits too....money wise and health wise its a no.....thats why I am selling up and getting out of Dodge....before some idiots vote ´´leave´´ and I am forced to :?


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 Post subject: Re: Setting up a business
PostPosted: Thu Jun 16, 2016 11:59 am 
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lanzalocal wrote:
Honest answer.....there were some good bits....but probably some very bad bits too....money wise and health wise its a no.....thats why I am selling up and getting out of Dodge....before some idiots vote ´´leave´´ and I am forced to :?



Are all the Canary Islands the same or do they all work differently depending on the island?


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 Post subject: Re: Setting up a business
PostPosted: Thu Jun 16, 2016 12:31 pm 
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The Canary Islands are split into two different provinces ,,,,,the first Santa Cruz de Tenerife province ,,,administration capital Santa Cruz on the island of Tenerife and comprising as well as Tenerife the islands of La Palma,,,,La Gomera ..and El Hierro
the second is Las Palmas province....admin capital Las Palmas de Gran Canaria on Gran Canaria and also comprising Lanzarote and Fuerteventura...both provinces together make up the Autonomous Community of the Canary Islands (admin capitals split between Santa Cruz and Las Palmas)..possessing its own parliament and Government and stiill having to accept certain ,,but not all Spanish Govt. rules.. as well as generating their own unique laws / taxes /rules which do not apply in mainland Spain :?

Then each island has its own Cabildo (or island council) as well as various Ayuntamientos (local authorities/ town halls) on each island....any and all of them can vary or introduce rules and regs such as planning,local taxes,permissions etc.
So in some cases they are the same...and in some radically different (hence the need for a gestor to deal with the many many forms of paperwork required to comply with each and all of them) :twisted:

Can only comment on Lanzarote and Fuerteventura ...and even they differ wildly in some respects...but in the whole are similar....Lanzarote being more regulated in certain things than Fuerteventura...but Fuerteventura having regulations that do not apply to Lanzarote ....

Take into account that in all cases you must keep at least 7 years worth of receipts,bills,payments,wages, social security payments..in fact anything fiscal or legal at all as any one of them can ask you for them ..if they so desire :oops: ...welcome to the business owners nightmare ....lol :? :oops: :lol:
That is why most but not all bars etc change hands so often ....I usually give a new place 3 to 6 months...if they are here after that then they tend to stay..... 8)
Edited later.....phew..just remembering all that has made me feel quite ill. and giddy....thank goodness that it is all over :cry: now....


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 Post subject: Re: Setting up a business
PostPosted: Fri Jun 17, 2016 12:47 pm 
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Joined: Fri May 08, 2015 8:34 am
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Thanks :)

So I think I know now what to fully expect and I have been given good info, so thank you

I think the next step for us to to work out a plan based on our ideas and work out costs, what we would need to make it worth our while whilst surviving and having a quality of life - if we can balance all that out then it's a case of setting a date & total amount required to go ahead and do it........

Is there much of an "Online" culture like there is in the UK would you say?


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 Post subject: Re: Setting up a business
PostPosted: Fri Jun 17, 2016 2:03 pm 
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Hi Craig......there is no real ´´on-line´´ culture here to speak of.......just getting t ínterweb is challenge enough....I am on my 3 rd provider since moving here as one may be good in towns but another may be better in rural areas. yet to find one that can do both :lol: ....sadly both are frequently let down by breaks in signal /reception/ faults of varying descriptions.....mine was off for 3 hours yesterday...BUT was quite happy as that was good. :P ..one previous provider was off for a week and a half once :twisted:
There are local FB pages but they tend to be full of ´´whinging poms´´ going on about why Spain cannot be more ´´English´´ etc ... :? :lol: :lol:
There is no ´´on-line´´ shopping as such...yet to even reach here :cry: ......and if you order from outside the Canaries the goods are held in customs here until you pay the duty and a further delivery charge for them to be released......although there is legislation in the pipeline for goods under 150€ value to be delivered with no charges....however we have been waiting nearly a year since that was announced ...and still no change.. :shock:
I wish you the best of success with your plans and hope it works out for you :wink: :D


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