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WORKING IN SPAIN

Where are the best places in Spain to set up a business aimed at foreigners?

If you have dreams of starting a business in Spain aimed at other foreigners, here are the best regions do it in and your potential target markets.

Published: 13 August 2020 17:01 CEST
Updated: 15 February 2022 08:37 CET
nerja spain
The Málaga town of Nerja is very popular with Swedish nationals who choose to move to Spain. Photo: Martin Vonk/Unsplash

Spain is very popular relocation destination, with foreigners making up around 12 percent of the population.

Even though many of them move here to improve their quality of life, there are plenty of newcomers who decide to start their own business here rather than try to get a contract job.

If you have dreams of starting a business in Spain aimed at other foreigners, here is some inspiration. 

If you want to sell fried breakfasts to the British, move to Alicante  

Everyone knowns that Spain is popular with Brits, but which regions do most of them live in? There are believed to be over 360,000 Britons living in Spain, with that number expected to increase before the Brexit transition period is over in December 2020. According to Spain’s national statistics agency, Alicante is the region favoured most by the British with over 69,000 calling it home.

There are in fact several towns in the area where the number of British people outnumber the number of locals. So, if you want to move to Spain and open up a business selling the best full English breakfasts around, then you might want to think about one of these towns: Poble Nou de Benitachell, where half of the town are British; San Fulgencio, where a third of the 8,000 people there are from the UK; or the small village of Daya Vieja, where a whopping 60 percent are British.

Alicante
Alicante: Photo: Vicente Viana/Pixabay

If you want to sell Guinness to the Irish, move to Barcelona

The Catalan capital of Barcelona is home to the biggest concentration of Irish nationals in Spain. There are many different Irish groups and clubs in the city, so you can be sure to feel at home. The city already has many Irish pubs, so you’ll be in good company setting up a business to cater to the Irish population.

Barcelona of course offers a great lifestyle, with beaches and mountains within the city, plenty of art and culture, and a lively nightlife.

Barcelona
Barcelona. Photo: Joaquin Aranoa/Pixabay

If you want to sell imported candy bars to Americans, move to Madrid

Madrid is the most popular area to live in for Americans. Figures from Spain’s national statistics agency show that the Community of Madrid is home to more Americans than any other autonomous region in the country. It is estimated that over 10,600 Americans live there. This is more than a quarter of all American citizens in Spain. Madrid is also one of the few places in Spain where English speakers are more likely to be American than British. Americans in the capital actually make up 40 percent of the English-speaking population.

So, if you have dreams of setting up an American supermarket, importing everything from Butterfingers and Jolly Ranchers and Kool-Aid to Pop-Tarts, then Madrid would definitely be the Spanish city to do it in.

Madrid
Madrid. Photo: Surya Namasté/Pixabay 

READ ALSO: What’s it like to set up a bed and breakfast in Spain?

If you want to sell preserved fish to the Swedish, move to Nerja  

If you’re thinking of setting up a company importing and selling pickled herring, cured salmon and crisp breads, then the place to go is Nerja. Nerja is a municipality in the Costa del Sol, in the province of Malaga. The town of Nerja itself has several sandy beaches, as well as a vast cave complex.

Move to Nerja and you’ll be close to all the popular Costa de Sol resorts, as well as the cultural capital of Malaga. The Swedes make up the second-largest foreign population in Nerja and many have bought second homes there. You’ll also find many Swedish groups and associations there to sell your products to.

Nerja
Nerja. Photo: Manolo Franco/Pixabay

If you want to start a stroopwafel café for the Dutch, move to the Valencia region

The Valencia region is very popular with Dutch nationals, with more of them buying homes there than in any other region of Spain. The coastal area of the Costa Blanca is where most of them choose to settle. The second most popular region for Dutch is Andalusia, where there are also a lot of Dutch companies.

You could choose to set up your café, selling homemade Dutch-style caramel waffles in popular towns such as Javea, Dénia, Villajoyosa or even Alicante.

Costa Blanca
Costa Blanca. Photo: Alex Gresbek/Pixabay

If you want to open a German beer garden, move to Torrox

The Andalusian municipality of Torrox, lies to the west of Nerja and sits approximately half way between the cultural cities of Malaga and Granada. Move to Torrox and you could be spending weekends in Malaga admiring art or weekends in Granada exploring the Alhambra or gorging on free tapas.

Torrox is the most popular place in Spain for Germans with more than 3,000 residents. It is estimated in fact that around 15 percent of Torrox residents are German. There are many German businesses in the area, so you won’t have any problem fitting in, if you want to market your products to the Germans. Torrox even has its own Oktoberfest each year, so it could be the perfect spot if you’ve ever dreamed of opening a beer garden selling steins of beer and pretzels.

Torrox
Torrox. Photo: Ernesto Perez/Flickr

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PENSIONS

What Brits should know about SIPP and QROPS pensions if moving to Spain

This Q&A offers some key information on SIPP and QROPS pension plans for British pensioners thinking of retiring in Spain, to help them decide which option is better for them.

Published: 9 May 2024 09:39 CEST
What Brits should know about SIPP and QROPS pensions if moving to Spain

Q: What are SIPPs?

A: SIPP stands for Self-Invested Personal Pension and is a UK-based pension plan. If you open an international SIPP then you can draw from this while you’re living in Spain.

Q: What is QROPS?

A: QROPS stands for Qualifying Recognised Overseas Pension Scheme. It allows you to transfer your UK pension out of the country. They are outside the UK tax regime, but must be inside the European Economic Area (EEA) if you want to avoid charges from HMRC. They also need to have similar rules and regulations to a UK-registered pension plan. Many QROPs from those wishing to retire to somewhere in Europe are transferred to Malta. As there is a dual tax treaty between Spain and Malta you will not be subject to Maltese tax when you draw your pension from there.

Q: What do I need to consider when opening a SIPP?

A: If you choose to open a SIPP, as it is self-invested, you will be responsible for managing it and making all the investment decisions. It is therefore best for those who already have some knowledge of investing or those who have the time and who are willing to put the work in to learn. It does, however, mean that you also have greater control and flexibility over your finances. You can choose to have the SIPP managed by a professional advisor, but of course this is an extra expense. Your SIPP could also be potentially subject to UK tax laws. 

Q: What do I need to consider when opening QROPs?

A: This is best for those wishing to cut all ties with the UK and permanently retire to Spain for the rest of their lives. You could lose UK domicile if you choose to do this and don’t have any other assets there, but it could mean you could also avoid UK inheritance tax. It’s also ideal if you wish your family also live outside of the UK

Q: I intend to return to live in the UK at some point in the future, which is best for me?

A: As SIPPs are UK-based, if you plan on returning there to live at some point during your retirement, that option is best. If you have QROPS, you could be subject to a large tax payment if you want to transfer it back to the UK.

READ ALSO: Six factors British people need to consider before retiring to Spain

Q: Which option will be cheaper for me?

A: SIPPs are generally cheaper than QROPs as you are managing it and investing yourself. If you choose someone else to manage it for you, however, this may not be the case.

Q: Will my SIPP be subject to tax in Spain?

A: Yes, if you are resident in Spain then you must follow Spanish tax regulations meaning that any withdrawals from SIPPs will be subject to income tax here. Pensions in Spain are subject to progressive tax rates ranging from 19 to 47 percent.  While SIPPs are also subject to UK tax rules, due to the double tax treaty between Spain and UK, you will not be taxed twice.

Q: Will my QROPS my subject to tax in Spain?

A: Yes, again if you’re resident in Spain you will be taxed on pension income. You must report income from a QROPS on your annual tax return. If you’re already a Spanish tax resident when you move your pension, it’s important to be aware that you’ll pay Spanish income tax on the whole value of the fund, therefore it’s much better to move it beforehand and then make your permanent move to Spain. 

Q: I want my pension to be paid in Euros to avoid exchange fees, which option will be best for me?

A: If you want to be paid in Euros, then QROPS will be the best as you will have completely transferred it out of the UK and into the EEA. This means that when you draw your pension, it will be paid out to you directly in Euros.

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