Can an expat start a business in Spain? Stan West relocated from Scotland and founded here the building company SNP Refurb. He shares his experience.
Is it difficult to start a business in Spain?
This depends on what kind of business you want to open. If it is a small business, ie yourself, simply become Self Employed, in Spain this is called Autonomo. The Spanish Government have an incentive in place for people who wish to start up their own Self Employed business. For the first six months the cost is €50. Then €100 for another six months. After that it goes up €50 every six months until you reach the maximum payment based on your age. That is usually around €300. This scheme gives a new start a chance to build up their business before having to pay the full amount.
There is one drawback. If you use this scheme, you can’t take any payment holidays whereas if you pay the full amount from day one you can take a payment holiday.
Once your business is established, if you so desire, you can become a Limited Company which reduces your liability in the event of trading problems in the future.
Whichever way you decide to adopt, unless you speak fluent Spanish, it is advisable to have an English speaking Spanish accountant. He will then act as a go between when dealing with the Spanish Social Services, Taxation and IVA (VAT) etc.
My personal cost for this is €75 at the end of every quarter (Four quarters in a year). And €100 to do my annual Renta and Income Tax payments. It is worth every penny!
Why did you decide to found a building company in Spain?
I have always been good with my hands. Every house I have owned, I have modernised by building on extensions, revamping bathrooms and kitchens etc. I built a large outside kitchen and bar area in my present house here in Spain. Everyone said it was fantastic and I should start a business designing and building them. So I did!
I started doing this five years ago on my own. Once I had designed and built a few outside kitchens and made a FaceBook page with pictures, the word spread. Then I started to get enquires for inside kitchens, bathroom modernisation, tiling, building, etc. Around this time, 2017, my son lost his job in the oil industry in Aberdeen, Scotland because of the downturn. As there were more and more orders, I told him to get over here to Spain and give me a hand.
As time went by, I have built up a good professional team who can handle most kinds of work we are asked to do. We do not build houses or extensions, we design and build outside kitchens, design and build or refurbish inside kitchens and bathrooms, inside and outside tiling, small building work and many other kinds of work. We made the web-site, it gives clients reassurance that we are a business to be trusted. Also, we can take potential clients to see our previous work related to what they want us to do for them.
How to find the clients when you work in Spain?
Our clients tend to be people we know and are aware of the work we do or recommendations from existing satisfied customers or repeat business. Our work has a very simple format. We give every customer a printed quote, on a company letterhead, showing two prices, one for the materials and one for the labour. We expect to be paid for the materials up front because that is what we do. The labour is paid once the work is completed to the customers satisfaction.
If the client lives abroad, we send pictures via WhatsApp every one or two days to show the progress of the work.
We also give a twelve months guarantee of all out workmanship. Even after that time period was up, we would still go and help the client wherever possible.
The exception to paying up front for the materials is when we are doing work for a Community. This is invoiced at the end. As we are completely legal and registered with the Spanish Social Security, we can provide recognised Invoices and Facturas to Communities and Urbanisations.
We work openly and clearly. Perhaps, this is the secret of successful word of mouth.
What was the impact of COVID-19 to your business?
We thought that the Covid 19 Pandemic would be detrimental to our business. However, we have found to our surprise that it has had the opposite effect.
We think that this is because of several factors.
- The bars and restaurants have been closed for some time. And even when they have opened with restricted opening times, people with underlying health problems are afraid to take chances with their health. This means that people have more available money to spend on their projects and more time stuck in their houses. They use their kitchens more and realise that it could do with an upgrade.
- Many people cannot come to their holiday homes because of Covid flying restrictions. They see this as an opportunity to have messy work done when they are not living there. For instance, the work in properties with one bathroom could not realistically be done while the owners are in residence.
- Our Company is becoming more ‘visible’ because of the quality of the work we are doing and the way we conduct our business.
What are the trends in house refurbishing in Alicante?
Bathroom refurbishment is very popular. The area we live in – Alicante – has many elderly Expats from the UK, The Netherlands, Sweden, Norway, Belguim, France, etc. For them, a walk in shower is a serious must. We offer a simple bath out, flat shower tray and shower screen in and the area where the bath was, retiled. Depending on what the client wants and the money they have available, we can offer replacement WC, sink with drawers underneath, new shower, retiled walls and floor, upgraded ceiling lights etc.
New kitchens are very popular as most of the pre-crash properties here are up to twenty years old and need various replacement work done.
Outside kitchens seem to be mostly additions to new properties right now. The last four we have done have been new builds.
Is it profitably to buy cheap house in poor condition in Spain and make the renovation there?
The answer depends entirely on how much you pay for a house in poor condition. Generally speaking, if the expensive bits are sound, ie the walls and the roof, renovation and extension would be financially viable.
Also, if you have the skills required to do a renovation project on a property in poor condition, ie experience in electricity work, plumbing, plastering, building, window and door installation, then you would be stupid to pay someone else to do the work for you making a profit from your money.
If you do not have the necessary skills, make sure you get a proper legally enforceable quote from reputable companies before you proceed with any work.
Stan West