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Doing Business on the Costa del Sol

This guide was written by Manzanares Abogados S.L. (info@manzanaresinternational.com) in collaboration with Guides.Global (office@guides.global).

It was written on 1 June 2016. The law and practice in Spain change all the time. Our guides are updated as frequently as possible - typically every three years - but may be out of date.

Our guides are prepared by professionals from many countries. They are, of necessity, both brief and general and can take no account of your personal circumstances. They are intended to be a good introduction to the subject BUT ARE NO SUBSTITUTE FOR PROPER PROFESSIONAL ADVICE, which our contributors will usually be happy to provide upon request.

The advice and opinions contained in the guides are those of the author and are not necessarily those of Guides.Global.

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The scope of this guide

This guide offers tips for doing business in Spain. It describes, in particular, how to do business in the area of Andalusia/Andalucía – which contains the Costa del Sol. See a map here. Please note that certain aspects of the law in Spain vary from one "autonomous community" (comunidad autónoma) lightbulb image - click here for more information on this subject to another.

It does not cover the main problems or issues associated with doing business in Spain - for that, see our Guide to Business issues on the Costa del Sol.

It does not talk about the legal steps involved in starting a business, nor does it look at business or company structures in any detail. For this information, see our Guide to Starting a Business on the Costa del Sol and our Guide to Setting up a Company on the Costa del Sol.

Introduction

Spain, like every country in the world, has its own business culture and 'insider tips' for doing well in it.

Spain is an old society, and one that - despite its recent influx of foreigners - is still set in its ways. Simply conducting your business in the same way you would do so 'back home' is a risky tactic. You are more likely to succeed if you learn about Spanish business culture.

There are, of course, a lot of things to think about before you do business in any foreign country - see our Global Guide to Doing Business.

Choose the right business structure

This is one of the first things you need to think about. Getting it wrong could cost you a great deal of time and money.

There are several options here: see our Guide to Starting a Business on the Costa del Sol for details.

The Spanish tax system makes some business structures much cheaper than others. Make sure that you don't end up paying tax you don't have to!

Furthermore, some business structures work on a more complex level - some demand more regular tax returns and other filing, for example - which can further increase your costs.

Seek professional advice from an accountant or a lawyer to choose the best business structure. It will not always be obvious.

Get to know people

Networking is incredibly important in Spain - more so than in most countries. Many local people will be wary of doing business with you until you are a 'known face'.

There are a few ways to make yourself well known and therefore well trusted in Spain.

If you've got the money, there are ways to 'fast track' the process. You could hold events for the influential, become involved with local charities or even sponsor one of the local sports teams.

Less expensive, but still pricy, is the option of joining one or more of the 'elite' social clubs in Spain. You're likely to bump into the higher echelons of Spanish business at a golf club, or one of the private clubs on any of the many marinas in the area.

A slower, but eventually just as effective, approach is the 'softly, softly' method:

Above all, learn the language. Many Spanish speak very good English, but you will find that social barriers break down much more quickly if you speak Spanish. Luckily, all of the tips outlined above are great ways to brush up on your language skills.

Hire local staff

This is another good way to get to know the locals - and it comes with other advantages.

Having Spanish staff (or, perhaps, a Spanish business partner) helps greatly with the language barrier. Local employees will also be able to help with cultural differences: knowing which businesses are likely to operate the 'siesta' system of opening hours; reminding you when a national holiday or staff-member's saint day is coming up; and knowing the correct approach to take to get the best out of contractors and suppliers.

Importantly, it will also give you credibility within the community. You will make Spanish contacts faster and you will be seen as a job creator - a valuable label in a society with such high unemployment.

Choose the right premises

Most major cities in Spain have what expats call the 'old town', where many traditional businesses of a certain type tend to cluster together. You will find streets full of lawyers and squares full of restaurants.

While an outstandingly good building for a great price might be worth breaking away from the crowd for, as a rule it is better to be where the Spanish will expect you to be! This will increase foot traffic and make your suppliers happy. It also means you can learn from other, similar businesses as you go along.

Don't spend too much on advertising

This may seem counter-intuitive, but it's important if you're looking to attract a Spanish clientele.

Spanish are suspicious of businesses that spend lots of money on flashy marketing campaigns. Your face on a billboard is likely to convince locals that you're a con-man rather than a high-powered business whiz. They are much more likely to use your services if they hear of you through a friend or associate. Yet another reason why making contacts is so important!

Of course, to start building up word of mouth exposure you need to get your name out there in the first place. A low-key campaign over social media and a few newspaper advertisements is generally the best way to go. Social media is cheap, targeted and the Spanish, especially the younger generation, spend a great deal of time on Twitter and Facebook!

If you're mainly targeting tourists or expats, of course, this will not be an issue. Tailor your marketing to suit the group you want to attract.

Expats' Tips

Do you have experiences with business in Spain? Tell us about it and share your story by emailing office@guides.global.

Conclusion

Becoming a respected businessperson in Spain will take time but, once you're there, you'll find that the locals and other business owners are friendly and helpful. Just bear in mind that things will work very differently here than they will 'back home'.

Other guides of interest

 Description Link 
Business Issues on the Costa del Sol
This guide is about some of the common business issues and problems that can arise when doing business with or in the Costa del Sol.
Business Issues in the Costa del Sol
Cultural Differences on the Costa del Sol
This guide is about some of the main cultural differences you're likely to come up against on the Costa del Sol - including in business culture.
Cultural Differences in the Costa del Sol
Starting a Business on the Costa del Sol
This guide covers all the basics for a foreigner wanting to start a business in Spain.
Starting a Business in the Costa del Sol
Setting up a Company on the Costa del Sol
This guide covers all the basics for a foreigner wanting to set up a company in Spain.
Setting up a Company in the Costa del Sol
Opening a Bar on the Costa del Sol
This guide is about opening and running a bar in Spain. It covers how to choose the right bar, the challenges when it comes to running a bar on the Costa del Sol and the economics of running a bar in Spain.
Opening a Bar in the Costa del Sol
Opening a Restaurant on the Costa del Sol
This guide deals with the things you need to know when you're opening a restaurant in Atlantis.
Opening a Restaurant in the Costa del Sol

You may also want to read:

 Description Link 
Doing business in Spain: etiquette tips for the traveler
Some handy tips from Strong Abogados
Doing business in Spain

Readers' Comments

 

Further information?

We hope you have found this guide useful. If you need any further help, please contact us.

Manzanares Abogados S.L.

1 June 2016


 

This guide was co-authored by John Howell (Email: John.Howell@Guides.Global or John@jhco.org. Web: www.jhco.org or www.Guides.Global)



 

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