For entrepreneurs looking to invest in Spain, purchasing an existing business offers significant benefits This is particularly beneficial if you’re interested in opening a bar, restaurant, or boutique, as many of the necessary licenses and permits are already in place. 
In this article, we’re going to take a moment to talk about how to buy a business in Spain, including the paperwork you need and all the little details you need to take into consideration before signing any papers. 
So, if you’re looking to move to Spain for a fresh start and want to learn more about buying a business, then keep on reading to understand the process step by step. 

Why Buying an Existing Business 
Instead of Starting from zero?

One of the main advantages of acquiring an established business is that essential licenses, work contracts, and permits often transfer directly to the new owner. This means you save valuable time and resources by avoiding lengthy application processes. 

Even if the business isn’t an exact match for your vision, purchasing and modifying an existing one is typically faster and more cost-effective than starting from scratch. You’ll also benefit from an existing customer base, operational structure, and market existance.

Important Things to Consider Before Adquiring

Before making any commitments, it’s essential to consider these critical factors: 

1. Assess the seller’s reputation: Buying directly from the owner can be risky if they have outstanding debts or financial issues that could affect your investment. 
2. Understand why the business is for sale: A struggling business with declining revenue might not be a wise investment. Research the reason behind the sale. 
3. Review financial records: Hiring an accountant to analyze at least the past three years of financial statements is crucial to verify the business’s viability. 
4. Seek legal and tax advice: Understanding your business structure, whether sole trader, company, or partnership is key to managing liability and taxation. 
5. Study the market prospect: Decide whether to build on the existing business reputation or rebrand to attract a different audience. 
6. Clarify property ownership: If the business includes real estate, determine whether the company will own the property or if it will remain under a lease agreement.

Licensing and Purchase Process

The procesdure of buying a business in Spain is similar to purchasing real estate. Normally, you’ll pay a 10% deposit to confirm your commitment, with the balance due within 30 to 60 days upon signing the final agreement. This deposit removes the business from the market while legal checks are completed.

It’s crucial to obtain a formal receipt for the deposit and ensure that all licenses and permits are in place before going ahead. Also, once the deposit has been paid, in return, the seller should hand over the title deeds “la escritura” or a copy of the lease and inventory of what the price includes to your lawyer.

If you’re changing the business name, you’ll need to register the new name and update ownership details, but the existing operational licenses remain valid.

Leasehold vs. Freehold

When you’re buying an existing business in Spain, you also have two options: you can buy a freehold or a leasehold.  

The primary difference between the two types of ownership is the initial investment capital involved and the legality of ownership required. 

• Leasehold: You own the business but not the property, making this a more affordable option with lower initial investment. You can also sell the leasehold later. 

• Freehold: You own both the business and the property, which requires a higher investment but eliminates rent costs and allows you to generate additional income by leasing the space. 

Ready to take the next steps?

Before finalizing your acquisition, conduct a comprehensive evaluation, visit the business multiple times, and seek professional guidance to ensure all financial and legal aspects are secure. 

At Talenom, we specialize in helping entrepreneurs navigate the legal, labour, financial, and administrative complexities of establishing a business in Spain with the peace of mind of having a team of experts by your side. 

If you’re considering investing in a business, our team is here to provide expert support every step of the way. Contact us to learn more about how we can assist you in your business journey in Spain.