The Guru Guide To Opening A Gran Canaria Business

The Gran Canaria guru guide to opening a Gran Canaria business

Opening a Gran Canaria business: Self-employed or a limited company?

If you’re planning to open a Gran Canaria business, the first thing you need to do (after a market study and lots of research) is to work out what type of company or self-employed status is best.

There are dozens of different company structures allowed in Spain but most people opt for the most common ones. Just for fun, here’s a full, slightly mind-boggling list of the potential options.

Being a sole trader in Gran Canaria: Going autónomo

Most small Gran Canaria companies keep things simple and opt for self-employed status (known as being Autónomo). This allows you to work legally, open a business bank account, send facturas in your name, employ other people, etc.

When we said simple, notice how we didn’t mention cheap. Once your first year of cheap Autonomo status is up, you’re looking at a mandatory 250-270 euro payment per month. This covers social security payments and insurance but doesn’t include tax. Autonomos in Gran Canaria still have to pay income tax (IRPF) and VAT (IGIC).

The total tax bite for a sole-trader in Gran Canaria is roughly 20% of earnings (but you can deduct expenses). You have to do annual or quarterly IRPF declarations and pay IGIC quarterly (we seriously recommend that you employ and accountant or gestoria to do this for you).

Two or more autonomos can further organise themselves into a partnership and obtain a CIF business number which looks better on bids that the NIE o NIF number that autonomos have to use.

A major disadvantage of being autonomo is that there is no limitation so creditors can pursue all your assets including your home if you are in debt. There is a form of autonomo called a Emprendedor de Responsabilidad Limitada which protects your home (to a certain extent) from creditors.

In any case, civil liability insurance is a good idea.

A limited company in Gran Canaria: The sociedad limitada or SL)

Sociedad de Responsabilidad Limitada (almost always referred to as an SL) is the Spanish equivalent of a UK limited company and give you similar protection from creditors in the case of debts.

To set one up you need to register a name with the Registro Mercantil and to put in a minimum capital investment of €3,005.06 (most people take it out the day after the company is set up although you aren’t meant to).

Starting a stock corporation in Gran Canaria: The Sociedad Anónima – S.A.

This is not a common way to start a business in Gran Canaria or Spain as it requires an initial capital of €60,101.21. However, an SA does protect you from personal liability and also allows you to sell the shares to a third party.

If your Gran Canaria startup is going global, this is a good ay to get investors on board.

An SA must have a Board of Directors (Consejo de Administración) and hold an annual Shareholders’ General Meeting (Junta General de Accionistas).

The tax efficient Gran Canaria company: Starting a ZEC

If you plan to come to Gran Canaria, invest a significant amount of money (100K-plus) and employ five people, then consider a ZEC entity. These are legal, low-tax companies based in the Canary Islands that save serious amounts on capital gains and corporation tax.

Read our guide to starting a Gran Canaria ZEC here.

Joining a cooperative in Gran Canaria: Joining a Cooperativa

Cooperatives are a way for autonomos to share costs. Instead of working for n employer as an autonomo, you bill via the cooperative and pay it a percentage of your earnings.

To join a cooperative ou have to find one that works in your business niche (teacher, jeweler, etc). Then you have to persuade the people you work for that cooperatives are a valid way of doing business in Gran Canaria as most people have never heard of them.

Cooperatives are worthwhile provided that you own under around 2000 euros per month. Above this figure and you are better off being autonomo.

Opening a Gran Canaria business

Becoming autonomo isn’t too hard: Just take your NIE to the Ventanilla Unica Empresarial on Leon y Castillo in Las Palmas and hope that everyone is at their desks. You should be able to sign up for tax and social security on site, then register for IGIC with the Canarian tax office (about 10 minutes north of the VUE).

If you are a new resident, you may be asked to provide evidence that you have a business plan and clients before you can sign up.

You need to pick an autonomo code that identifies your line of work. The list is long and rather pedantic so it’s worth having a look before you head off to sign up. Here is the full list in English. The only effect this has on you is that it affects whether you have to declare your earnings annually or quarterly.

You should be able to sign up for tax and social security on site, then register for IGIC with the Canarian tax office (about 10 minutes north of the VUE).

For all other corporate structures in Gran Canaria, we seriously advise you to use an advisor as the paperwork is complex and the options myriad.

In Las Palmas de Gran Canaria, we recommend Montelongo Asesores as they have plenty of experience helping foreigners to set up in Gran Canaria. If you are planning a ZEC, they are the most experienced firm on the island.

If you plan to run a business in Gran Canaria you’ll need to speak at least some Spanish: Here’s our Guru Guide to Learning Spanish in Gran Canaria.

The Guru Guide To Setting Up A Tax-Efficient Gran Canaria Business (ZEC)

Low-tax Gran Canaria business and ZEC investments in Gran Canaria

Low-tax Gran Canaria business and ZEC investments in Gran Canaria

Gran Canaria is part of the ZEC, or Canary Islands Special Zone. What’s special about it?

Well, open a business in Gran Canaria and tick all the boxes, and you pay just 4% corporate income tax and gets a slew of other benefits.

What is the ZEC?

The ZEC is a low-taxation zone focused on the Canary Islands. Its main purpose is to encourage European businesses to move to the Canaries, or set up subsidiaries here, to provide jobs and experience to local people and boost the economy. In exchange, it offers businesses one of the lowest corporate tax regimes in Europe. Read More

The Ultimate Guru Guide To Relocating To Gran Canaria

Complete guide to relocating to Gran Canaria

Unless you try to drive over, relocating to Gran Canaria isn’t really any harder than moving anywhere else in Europe.

That said, the more information you have before you move to Gran Canaria the easier things are. Here’s everything we can think of that you need to know about relocating to Gran Canaria. Read More

Do Your TEFL/ CELTA Course In Gran Canaria

CELTA course dates for 2018 at the Irish Academy in Las Palmas de Gran Canaria

To get an English teaching job in Gran Canaria, it helps to have a recognised qualification for teaching English as a foreign language (a TEFL or CELTA).

You can work without one, but your earnings and the chances of getting a job go up if you have a good certificate.

Until now, you had to get your qualification before you arrived on the island.

Not anymore; The Irish Academy in Las Palmas now offers the Cambridge CELTA course.

Of course, you don’t have to live in Gran Canaria to do it. Anyone come to Las Palmas, do the intensive month-long course, and then go anywhere in the world to teach English. The Cambridge CELTA certificate is widely recognised all around the world.

Getting your TEFL /CELTA in Gran Canaria

The Irish Academy in Las Palmas

The Irish Academy in Las Palmas

The Irish Academy is the only place in the Canary Islands offering the Cambridge CELTA course.

It is a full-time, four-week, intensive course aimed at people wishing to enter the teaching profession. No prior knowledge of teaching is required, but non-native English speakers are required to have a high C1 level of English.

Course requirements have been reduced so that candidates can be aged 18 and need not have a university degree. The CELTA can serve as the perfect tool for anybody wanting an alternative to university, or just wanting to postpone their degree for a year or two. Taken after a degree, the experience gives any CV an edge over recent graduates entering the job market.

It is an excellent way into teaching for people looking to forge a career out of it, both at the start of their professional lives or at any point after. There is no age limit meaning people can qualify even if they feel they have fulfilled their professional goals.

For more information, visit the Irish Academy.

Renting Out A Gran Canaria Property? The Taxman Is Watching

Gran Canaria tax: The Spanish tax man is watching people who rent property but don't declare the income

Gran Canaria tax: The Spanish taxman is watching people who rent property but don’t declare the income

Hacienda is cracking down on undeclared rental income all over Spain. Here’s what it means for Gran Canaria property owners.

Online crackdown on undeclared income

Spain’s tax authorities have warned that they now monitor property rental websites for owners who rent out property but don’t declare the income.

The Hacienda drive also targets people offering services online. Teachers, translators and handymen can expect to get letters too.

People advertising their property or services but not declaring the income on their annual declaración will receive a written warning.

Hacienda will cross-check information from rental websites with water and electricity consumption data from the utilities to identify active rental properties.

What it won’t be able to find out is how much a property is rented out for.

Paying tax on rental income in Gran Canaria

Resident property owners who rent out property in Gran Canaria have to declare the income on their annual tax filing and pay tax on the income.

Non-resident property owners have to pay 25% income tax on any money earned in Spain, even if the money they earn from renting a Spanish property doesn’t enter Spain.

Short-term rental rules and taxes

While you don’t need a license to rent property on a residential basis (for a period longer than 90 days), you do need a license to rent to tourists.

Short-term rental is only legal in areas that are residential (it’s illegal in resort areas).

To get a short-term rental license, you have to go to the island’s tourist board, known as the Patronato de Turismo, register the property, and get a blue plaque and ID number.

Do I need to be autonomo to rent out a property?

You don’t need to be autonomo to rent a residential property unless it is your main source of income.

You don’t need to be autonomo to rent a tourist property unless you offer hotel-style services such as cleaning and laundry. It’s fine to clean between stays, but if you clean while a set of guests are renting, it changes the activity and means you’d need to be autonomo.