Frustrated at red tape for foreign small businesses!!

A

amcd101

New Member
Hi

I'm moving out to Ibiza on the 10th of January and I've done a lot of research on setting up a business on the island. It does seem that there is a lot of red tape regarding foreign small business owners and as someone stated in a previous thread, some of the policies are almost to the point of economically disadvantaging themselves. Most small businesses ( of a non illegal trade at least) require more than a FULL year (not a seasonal 6 months) to experience and maintain economic stability and growth. It is no wonder then that you see the same locales up for rent or lease every year. It really does make glum reading for people like myself who have dreamed and saved for this for a long time, It only adds to the pressures already involved in moving abroad to open a business. I'm not one for benefit scrounging and never have been, but even introducing some sort of tax break or safety net for new businesses wouldn't be such a bad idea instead of shooting small businesses down at the first instance just as they are finding their feet!!!

P.S... This is my first post on the forum so a big Hello to everyone and roll on 10th January!:)

Tony
 
What on earth are you talking about?

Spain and especially Ibiza has to be the easiest, cheapest and least bureaucratic country in Europe in which to set up a small business.

The locales which you see for rent year on year have absolutely nothing to do with red tape. They don't work because they are either in the wrong location or the business is not of a good enough quality to make a profit. As long as you choose the right location for your offering in Ibiza, making money is child's play. The season may well be short but there is lots of money to be made as long as you have a product which the public want and you are prepared to work hard for it.

I don't know what sort of research you have been doing, all I can think is that you have been listening to jaded locals in bars at three in the morning telling you how difficult it is to run a successful business in Ibiza. The fact is that if you have a good product in a good location, you will take a lot of money and if you listen to professional advice your tax bills will be low.
 
amcd101 said:
Hi

I'm moving out to Ibiza on the 10th of January and I've done a lot of research on setting up a business on the island. It does seem that there is a lot of red tape regarding foreign small business owners and as someone stated in a previous thread, some of the policies are almost to the point of economically disadvantaging themselves. Most small businesses ( of a non illegal trade at least) require more than a FULL year (not a seasonal 6 months) to experience and maintain economic stability and growth. It is no wonder then that you see the same locales up for rent or lease every year. It really does make glum reading for people like myself who have dreamed and saved for this for a long time, It only adds to the pressures already involved in moving abroad to open a business. I'm not one for benefit scrounging and never have been, but even introducing some sort of tax break or safety net for new businesses wouldn't be such a bad idea instead of shooting small businesses down at the first instance just as they are finding their feet!!!

P.S... This is my first post on the forum so a big Hello to everyone and roll on 10th January!:)

Tony
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Out of interest, what type of business are you trying to set up? I am planning on making the move next May.
 
CasperSlides said:
What on earth are you talking about?

Spain and especially Ibiza has to be the easiest, cheapest and least bureaucratic country in Europe in which to set up a small business.
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Is this after the poster has wasted a several days of his life waiting around a hostile police station simply to get a NIE before being able to do ANYTHING legal at all. The 'system' in Ibiza takes red-tape to a different stratosphere than most people will encounter in a lifetime.
 
WeLuvIbiza said:
Is this after the poster has wasted a several days of his life waiting around a hostile police station simply to get a NIE before being able to do ANYTHING legal at all. The 'system' in Ibiza takes red-tape to a different stratosphere than most people will encounter in a lifetime.
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Have you tried using a gestor to sort out the paperwork for an NIE number? In my experience getting the NIE is the easy bit, the gestor makes the appointment, you sit in the canteen at the police station drinking coffee and veteranos with the off duty coppers while the girl from the gestor office queues on your behalf and you wait until you are called. Of course it costs... , but is worth every penny not to have to queue up with all the summer workers.
 
i think i may have mentioned the word gestor in the past - it will help you to avoid situations like these

[video=youtube;MkNstn8t0BM]http://www.youtube.com/watch?v=MkNstn8t0BM&feature=related[/video]
 
Sorry Casperslides....very nice to meet you to!!

Heres a quote of yours that I found on a previous thread stating how 'easy' it is for New business owners who are threatened with bankruptcy and their residencia being revoked after there first 6 months of trading!!! sound like a walk in the park eh? that's a weight lifted right off my shoulders!!!!!! the word contradiction comes to mind (minus the part about the gestor,which I already know) Also by curiousity, do you have a business in Ibiza yourself? If so I'd like to hear about your 'easy ride' and success story and maybe learn something from the master himself!!!:) -

" You have to gain points as a tax paying employee in order to benefit from this system and the payments that you receive are related to how much tax you have paid into the system. I believe that in order to receive full benefits, the minimum is 6 months on a forty hour contract or 12 months on a 20 hour contract but I am sure that somebody on here will correct me if this information is incorrect.

Business owners are unable to claim any benefits during the off season. The tax department determines how much you need to live on during the winter by looking at average rent, average shopping bills, average utility bills etc... across the island. In order to continue with your business the following year you must show that you have made enough post tax profit to live, based on the tax departments financial criteria. Bizarrely, they don't take into consideration how much it costs you to keep the business dormant off season.

If you cannot show the tax department that you have enough money to keep yourself through the winter then you must declare yourself bankrupt, then theoretically as a foreigner your residency is revoked and you must leave the country. Whether or not it is ever put into practise I don't know or how it affects Spanish citizens who are treated better than foreigners in this regard. Benefits in Spain although generous, are not the easy ride that they are in the UK.

Your best bet is to speak to your Spanish accountant rather than relying on this forum for information. This year the tax department and the ajuntamentos are very big on (one could even say fanatical about) handing out fines for any misdemeanours in order to fill their coffers. "
 
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The red tape depends but the whole process is similar to UK in many ways, It depends on what you want to do, If you simply want to go self employed, it`s about €400 ish @ the Gestoria, a few weeks later you should get your NIF and can trade, you pay tax and NI, (suit plumber/gardeners etc)
If you want to take over a bar / business that is all in place/ licensed etc, Again reasonably easy, NIE,NIF Gestoria, €
The tough one is if you want to start from scratch, eg empty building to Bar, As in UK you will have every official under the Sun to have fun with :-)

The locales which you see for rent year on year have absolutely nothing to do with red tape. They don't work because they are either in the wrong location or the business is not of a good enough quality to make a profit.
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Casper is correct here but that is only half the battle, Overheads are your biggest problem, rental prices are silly and the hidden charges are often overlooked when signing the "Trespasso" (lease, used to worth € but in my opinion, not worth the paper it is written on now) Couple that with the present economic climate, No one is spending anything,,, If you have a good position, great staff and reasonable prices and are prepared to work a lot of hours,,,, You may be comfortable :-) It`s an old Ibiza saying, How do you make a small fortune in Ibiza ? Bring a large one (And keep your nose out the powder lol)

Tim
 
amcd101 said:
Sorry Casperslides....very nice to meet you to!!

Heres a quote of yours that I found on a previous thread stating how 'easy' it is for New business owners who are threatened with bankruptcy and their residencia being revoked after there first 6 months of trading!!! sound like a walk in the park eh? that's a weight lifted right off my shoulders!!!!!! the word contradiction comes to mind (minus the part about the gestor,which I already know) Also by curiousity, do you have a business in Ibiza yourself? If so I'd like to hear about your 'easy ride' and success story and maybe learn something from the master himself!!!:) -

"
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Thank you for taking my post out of context. That post related to running a summer business (as the majority of businesses run by foreigners are) and then expecting to be able to sign onto the dole during the off season.

If you run a business in any country then you are expected to be able to make enough money to support yourself or go bankrupt. Whether that business is open for six months or twelve months of the year, unless you have savings to fall back on, there is no way out of this.

If you are going to run a seasonal business in Ibiza then you have to plan for that business to make enough profit during the season to support you during the winter when it is closed. If it is unable to do that then it is not a viable business and is one of the main reasons that you see so many "Se Alquila" signs in bar & restaurant windows throughout the winter.There are no guarantees but if you have a business that sells what people want and it is in the right location and you have something to fall back on should things go awry, then you shouldn't find yourself in that position.

And yes, I have run an extremely succesful business in Ibiza for the past eight years, it wasn't an easy ride, nothing worthwile ever is, but it was a lot easier to set up and run than any business that I started in the UK and despite what you may think there was a lot less red tape.
 
CasperSlides said:
If you run a business in any country then you are expected to be able to make enough money to support yourself or go bankrupt. Whether that business is open for six months or twelve months of the year, unless you have savings to fall back on, there is no way out of this.
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Makes perfect sense ^, it makes no sense that anyone should think they are able to claim benefits during 'quiet periods' of their business, a business is either viable or it isn't!

If any of you guys could recommend a decent gestor or accountant that could get me properly setup, would be appreciated. My situation is quite simple, I work from home doing I.T. consultancy work. I am hoping that being in possession of my NIE it won't be too costly to get setup legally.

Apologies for the deviation away from the OP's original post. If you don't mind paying a few quid (€150 to €200 per person we were quoted) I would definitely go with a gestor for nie, the rules change week by week. Good luck.
 
WeLuvIbiza said:
If any of you guys could recommend a decent gestor or accountant that could get me properly setup, would be appreciated. My situation is quite simple, I work from home doing I.T. consultancy work. I am hoping that being in possession of my NIE it won't be too costly to get setup legally.
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I use Gamaservi in Santa Eulalia, they do everything for me; legal, accounting, payroll, admin. They aren't particularly cheap but they all speak English and they have a good relationship with the tax department and the local conseil which is priceless for me.
 
priceless is the key word. i still occasionally put my accountant's head on to try and put a cost on not sitting around waiting for hours in government offices for nothing and i just can't. people who do that for you are worth their weight in gold!

a wise friend of mine once said why waste your time running around trying to do things you are useless at when you can pay someone else to do it while you earn pot loads of money doing what you know all about. (obviously he's a builder)
 
stephen said:
priceless is the key word. i still occasionally put my accountant's head on to try and put a cost on not sitting around waiting for hours in government offices for nothing and i just can't. people who do that for you are worth their weight in gold!

a wise friend of mine once said why waste your time running around trying to do things you are useless at when you can pay someone else to do it while you earn pot loads of money doing what you know all about. (obviously he's a builder)
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:) The nie experience was good training for the waiting around process for me. Took three visits and approximately 6 hours waiting around a mobile phone shop to get a new phone recently. Then there is the post office, and the.....

Will sort things out with Gamaservi, thanks.
 
Getting a gestor to do everything for you is all well and good if you can actually AFFORD one!!! Quite a lot of us who come here can't afford to shell out 100 euros to someone to do paperwork when you can get it done for free by doing it yourself!! (free as in expenses, cos you've got to pay for the NIE, the Empadron etc anyway!)
 
psycholisa said:
Getting a gestor to do everything for you is all well and good if you can actually AFFORD one!!! Quite a lot of us who come here can't afford to shell out 100 euros to someone to do paperwork when you can get it done for free by doing it yourself!! (free as in expenses, cos you've got to pay for the NIE, the Empadron etc anyway!)
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What? I am getting more and more confused by this. Can I get an NIE before a job and how much does it cost?
 
I heard it was 20 or 25 euros (I've had mine for 10 years so that was before they started making you pay!). Now you can't get one without a job as far as I know....
 
Wilko808 said:
What? I am getting more and more confused by this. Can I get an NIE before a job and how much does it cost?
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As stephen has previously alluded to the only way to get a reasonable answer is to ask a professional. Between our first application and finally getting private health cover arranged a few weeks later the nie rules had changed. Like the rest of the world, the Spanish economy is not in the best of shape, the nie requirements have consequently become much tougher. My current understanding with regards work and nie (based on the forms we filled). You need a) Contract of employment that is registered with the jobs department (someone please add the correct name!). Obviously this is a chicken and egg scenario as you can't get a contract without an nie or b) without a work contract you need to have private health insurance with cover equivalent to the state health care, plus evidence of enough money to support yourself for one year (approx €5,000). Also, most banks will not accept cash in payment for the nie fee €10.50 you need a bank account. Caixa will accept cash Tues & Weds 9am to 10am only. It is a minefield atm. If you have a spare few euros a gestor would be the way to go imhaho.

IF you are female and bordering on a 10, the above seems to not apply! Ensure you are wearing the shortest skirt and are looking your best, obtaining your nie will be a breeze. (Not professional advice, purely based on observations made during many hours sat waiting our turn in the 'ordinary folks' queue :)
 
WeLuvIbiza said:
As stephen has previously alluded to the only way to get a reasonable answer is to ask a professional. Between our first application and finally getting private health cover arranged a few weeks later the nie rules had changed. Like the rest of the world, the Spanish economy is not in the best of shape, the nie requirements have consequently become much tougher. My current understanding with regards work and nie (based on the forms we filled). You need a) Contract of employment that is registered with the jobs department (someone please add the correct name!). Obviously this is a chicken and egg scenario as you can't get a contract without an nie or b) without a work contract you need to have private health insurance with cover equivalent to the state health care, plus evidence of enough money to support yourself for one year (approx €5,000). Also, most banks will not accept cash in payment for the nie fee €10.50 you need a bank account. Caixa will accept cash Tues & Weds 9am to 10am only. It is a minefield atm. If you have a spare few euros a gestor would be the way to go imhaho.

IF you are female and bordering on a 10, the above seems to not apply! Ensure you are wearing the shortest skirt and are looking your best, obtaining your nie will be a breeze. (Not professional advice, purely based on observations made during many hours sat waiting our turn in the 'ordinary folks' queue :)
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I am getting very disheartened by this whole thing. I have planned to leave a good job in the UK to work in Ibiza with the aim to start a new life. I am still non the wiser how you get a job without an NIE and an NIE without a job. It is now starting to sound like to much of a risk to give up what I have in the UK sadly. No, I am not a female nor a 10/10 either!
 
Wilko808 said:
I am getting very disheartened by this whole thing. I have planned to leave a good job in the UK to work in Ibiza with the aim to start a new life. I am still non the wiser how you get a job without an NIE and an NIE without a job. It is now starting to sound like to much of a risk to give up what I have in the UK sadly. No, I am not a female nor a 10/10 either!
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In the am, I will scan the latest nie form and the list of requirements and send via pm. If you are moving your life over here, the euros spent on professional advice has to be money well spent. For me and a family of four would have cost a kings ransom for nie process plus we had the help of a fluent local. Patience is required in bucketloads but it is all worthwhile and is character building :)
 
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