Essential Information - an Online Fact Sheet
This page forms part of our initial information pack. The main aim is to provide you with a clearer
insight in to what is involved in running a business here on Mallorca. Like you, everyone working here at Jaime and Sheldon has
sat looking at information sent to them by companies offering businesses for sale abroad.
Its not till you get
here that you realise who you can and who you cant trust. Unfortunately for some they
realise far too late. So please take your time to read through this information, we hope you
find it both interesting and informative.
We have tried to cover as many topics as we can in order to give you a sound insight into what is involved in buying a business
here in Mallorca (Majorca). Don’t leave your future to chance; feel free to speak to our competitors and then
speak business with us. We are the only Business Agent who provides client testimonies.
Jaime and Sheldon
British owned and proud to be the most
Recommended Business Agent on Mallorca (Majorca)
Choose your agent carefully
Buying a business in Mallorca is completely different to buying a business in the UK. On Mallorca it is normal practice when selling
a business to have it placed with many different agents, as this without question gives the seller the biggest exposure. As a
result, very few businesses are for sale exclusively by one agent.
We are sure that you would agree that it is unimportant which agent sells your business, but as a buyer your choice of
agent is critical. The would-be buyer should choose an Estate Agent who is legally registered, fully insured and
efficient, whilst also being able to provide a full aftersales service.
Should you see a business advertised elswhere,
on the internet, or in the newspapers, that you wish to view please contact us. In the unlikely event that we haven’t
got the business listed on our books, we will arrange to include it on our list in time for your visit.
We would recommend that all buyers insist on visiting the offices and checking the company’s registration thereby satisfying
themselves that the company is indeed in a position to fulfil its promises of aftercare. All too often we hear stories about
the man or woman who operates from a brief case using only a mobile phone and a car, or a socalled Estate Agent who operates from a
“smoke-filled, seedy, side-street office.” These people are then nowhere to be found when you really need them the most!
Your decision to use Jaime & Sheldon S.L.
is just as important as the business you buy
The Jamie & Sheldon SL aftercare service is available to you free of charge provided that you have not seen your chosen business
previously with another agent on Mallorca. We undertake to show you businesses that are available for purchase, and we have a
strict company policy of no “hard sell”. We will never place you in an uncomfortable position or make you feel in any way to buy,
any decision to be made will be entirely yours.
In the event that you view a business with another agent, then that asent is entitled to complete the transaction, therefore denying
you the completely free of charge Jamie & Sheldon SL aftercare service. Over 30% of our business is generated by referrals and personal
recommendations.
The Buying Process
There may be many reasons why you are considering a new beginning with a life and business in Mallorca. You have already begun the
process by contacting Jamie & Sheldon SL and we will now try to make the buying process as clear as possible, so that
you can make a reasoned and objective decision about your future.
It may be that you will need to make more than one visit to the island before you find your perfect business, but during your time
here we will make every effort to show you the whole island, so helping you to visualize any business that you are considering
within the island setting.
Please! Help us to help you. We welcome visitors to our office at any time, but in order for us to provide you with a truly
efficient service we would respectfully request that would-be purchasers notify us and give us as much notice as possible
of an intended visit.
Why? Because our services are in demand, it is essential that we know of your journey so that we can give you our individual attention.
Even those who make an immediate decision to visit, please inform us before you board the flight.
Flights to and from Mallorca
Palma International Airport is a large, modern airport situated just a few kilometres
from Mallorca’s capital city of Palma. All the main resorts are within one hours driving
time from the airport. There are frequent flights to Britain throughout the year by
either budget airlines or package holiday carriers.
You may wish to:
a) Book a Package Deal and incorporate a holiday with your visit.
b) Book with one of the budget airlines by phone or the Internet.
We are always willing to check if we can improve on the price that you have been quoted.
At the airport you can be met at the arrivals gate by one of our team. You will know
in advance who will be meeting you and you will be advised of his/her mobile phone number.
Remember that you will need a minimum of 2 Euros credit to use a pay phone in order to be
connected to a mobile phone in Mallorca.
Accomodation on the island
Unless you have booked a package holiday deal, we will be able to find comfortable
accommodation on the island within your price range for the duration of your stay. Our
representative will take you directly to your accommodation from the airport. Only
when you have had a chance to settle in will we discuss your business needs and put
together a workable itinerary, which will cover your specific requirements.
Property Listing
A brief look at our listings will show you that we represent a large selection of businesses
throughout Mallorca. At Jamie & Sheldon SL we take seriously the responsibility
of listing only viable businesses which present value for money to our potential customers.
The asking price of the business is in pounds and is therefore dependent on the daily exchange rate
against the Euro. Remember that all prices are negotiable and we will endeavour to gain the best possible price
on your behalf.
The rental prices are the current amount paid by the present owner, but this charge may be increased on the
transfer of the business by between 10% and 15%, as allowed by Spanish law. The rents are subject to the IVA tax
but this is reclaimable.
We make every effort to describe each business as accurately as possible so that you will be able to shortlist those that
best fit your requirements. A map is included so you are able to place the business within the island.
As part of our service, Jamie & Sheldon SL will work from your shortlist of businesses to create a workable itinerary
incorporating all the properties that you wish to view. We will take you to the individual properties and you will then have the
opportunity to meet the present owners to discuss how the business trades at present.
Remember:
1. Different properties come on the market throughout the year. You might not find the property most
suited to you in your first visit.
2. Take time to find a business that you will enjoy. It is in all our interests that you succeed.
Our fees and Commissions:
The vendor pays our fees and commissions so that there are no extra charges, over and above the
agreed purchase price, to you the buyer for our services.
Your choice of business should be based on:
1. Location. Location. Location.
Remember a business on the sea front is not
necessarily the best place to be. A good location could be determined by how many people pass the
door.
2. The cost of the business. Remember that you must allow for a certain amount of working capital
for stock, decoration and other incidental expenses.
3. Choose a business where you can use your previous expertise and experience to help you in your
new venture.
4. Do the homework again.
Remember, "foot traffic" = potential customers passing the door.
Location, location, location
Your choice of properties in Mallorca
From looking at our listings you will already have realised that there are many different types
of businesses available at different prices and in different locations, around the island. Very
few businesses have accommodation so it will also be necessary for you to rent accommodation nearby.
You may find that prices vary between agents advertising the same businesses. This is
usually caused by a vendor not managing to contact all of the agents to advise them of
any change. If you see a business advertised at a lower price, rest assured that Jamie
& Sheldon SL will be able to obtain the business at that price, or better, providing it
is a "genuine" sale price.
You will be able to choose from three types of property when buying your business:
1) A Leasehold (trespaso) Business
This is by far the most common means of buying a business on the island. A landlord owns the shell of the building and your
contract will enable you to rent the premises from him for the monthly rent shown on our listings. The lease is negotiated
for a given period of time, usually 5 –10 years, and during this time the landlord is only allowed to raise the rent
in line with current inflation levels published by the Spanish Government currently running at approximately 3% per annum.
If at the end of the lease period you wish to continue using the property the landlord must offer you a subsequent term at no extra
cost but he is allowed to raise the rent by up to 15%. You own the fixtures and fittings within the property and are able to change
the décor as you wish. However, if you want to make changes to the structure of the building then you do have to gain the Landlord’s
permission.
It may be that you will want to move on before the full term of the lease has expired. When you then sell the business the landlord
will be entitled to retain approximately 15% of the price “declared”. It is important to understand that the landlord cannot
terminate the lease for any reason other than non-payment of the rent, and this termination can only take place through the legal
system. Invariably this takes a considerable amount of time.
2) A Rental Business
Occasionally rental businesses come onto the market, and this has the advantage that
it gives you the opportunity to operate a business in your chosen field. This means that
you will be able to gain a very clear picture of what it takes to run the business
successfully.
You will be expected to put down a deposit, which will be repayable when
the property is returned in a satisfactory condition. The rent is either paid annually
or monthly, and there is sometimes the added bonus of being able to buy the freehold
of the property at a later date.
3) A Freehold Business
Freehold businesses come on to the market infrequently, as the Spanish consider the rent from the property to be their pension and
part of their children’s inheritance. These properties are obviously more expensive as you are buying not only the fixtures and
fittings, but also the shell of the building.
However, as this is a complete property you can borrow between 50–60% through the Spanish banks. You will also be liable to pay
between 8-10% for taxes on the transfer price and other legal costs.
REMEMBER... It is essential that you use a bonafide company for buying your new business, and
provided that you follow the advice given to you on the purchase of a property, there is very little that should go wrong.
Your ideal Business
Please remember:
Do not be tempted to buy any business on your
own without the scrutiny and advice of competent individuals who are there to look after your interests, and who will make sure
that your business will run smoothly from the start.
As part of our service, Jamie & Sheldon SL are able to introduce you to competent English-speaking solicitors (Abogado) or
accountants (Gestor) who will work efficiently on your behalf.
WHEN you have found your ideal business having considered all of the options available and possibly after several visits to the
island, you are now ready to proceed with the buying process!
Your Option To Buy Agreement
You make an offer for the business, which we will negotiate with the vendor on your behalf. This negotiation will include the price
and the terms and conditions of sale. Further investigations will then take place to verify the existing licences, to check
that the fixtures and fittings are in good working order, and that the business is debt free. In the event of any anomalies, money
will be deducted from the purchase price of the business.
The Option to Buy Agreement will state the particulars of both the buyer and the seller, terms of payment, and the date that the sale
should be completed. At this point you will be required to pay a 10% deposit, which will be held in our customer account at Banca March,
awaiting the completion of the purchase.
Once this agreement is signed, the vendor undertakes to remove them business from the market. It is also important to understand that
during the period of the option agreement, should any problems arise, regarding the legality of the business, your deposit would be
returned to you.
LEGAL REQUIREMENTS FOR OWNING A BUSINESS
Spain is a member of the European Community, (EC) so providing you hold a European passport, you have the right to live and work here
and to be treated as a national of this country. In the event that one or more of you do not hold a European Passport, then it may
still be possible for you to buy a business here. Jamie & Sheldon SL would be pleased to advise you on individual circumstances.
The list that follows appears to be rather long and complicated, but as part of our service we undertake to help you acquire all the
necessary licences and registrations. This way the burden of extra paper work and applications is removed, leaving you free
to spend more time organising your new business.
N.I.E. NUMBER
All residents in Spain must have their own personal identification number. We will
apply for this number for you. Without it you cannot trade legally.
FISCAL LICENCE and SOCIAL SECURITY REGISTRATION
* The Fiscal Licence is to show the taxable activity of your business.
* The Social Security Registration is to enable you to reap the benefits of the Spanish equivalent
to the British social security system, which includes health care and, after 15 years, pension rights.
OPENING LICENCE
When you buy your new business the current licence to trade will be transferred with the business.
All businesses must have a licence, which clearly states its current use.
FOOD HANDLERS CERTIFICATE
If you are involved in handling food you have to attend a seminar in Palma and pass a simple exam.
The seminar is given in Spanish and as part of our service we undertake to provide an interpreter
in order that you easily understand the proceedings.
I.A.E. TAX OFFICE REGISTRATION
Each trade, business or profession is in
a category of yearly fees payable to the
government as income tax. This tax is
paid on account quarterly.
I.V.A. REGISTRATION
This is the Spanish VAT rating. It is important to appreciate that there is no
threshold of turnover, and all businesses are required to submit quarterly returns,
which will be submitted by your Gestor (accountant).
APPLICATION FOR RESIDENCY
You can, and should, apply for residency in Spain, and this might take considerable time
to process, it is only denied in very extreme cases.
THE SALE CONTRACT
On your return to the island to complete the transaction on your new business, a
member of our team will again meet you at the airport and take you to your accommodation.
This accommodation may well be an apartment near to your business, which has
been arranged for you on a short-term lease. This will enable you to look around, when
you are more settled, for long term accommodation which best suits the individual
needs of you and your family.
THE CONTRACT
In your absence, Jamie & Sheldon SL, in conjunction with your Abogado or Gestor will
have continued to check that the business is debtfree, and that all the necessary
licences are in place. Even at this stage, if any irregularities are found, you are still
entitled to withdraw from the sale and have your deposit returned in full.
If possible the final contract will be written in English, but if it has been written in
Spanish our translators will go through it with you carefully so that your obligations
are clearly understood. The contract will be signed in the presence of the vendor and
the Abogado, and it is then that the balance of the sale price will be paid.
* Do not be tempted to pass over any cash, or transfer money to an offshore account
to the vendor outside this meeting, as it will be very hard to trace and return.
It is sometimes possible that an arrangement can be made with the vendor to stay and
help you make a smooth transfer to your new business. They can introduce you to
regular customers, discuss suppliers, delivery days and generally make you welcome on
the island.
COMPLETED !!!!!
The business process is now complete, but you are not on your own, as our after sales
service is now available to use, as often or as little as you like.
Our aftersales service promises that:
* Our office staff will be on hand to help as much as possible. All you have to do is ask.
* Our Aftersales pack gives you valuable information by naming reputable
professionals, contact addresses for various groups on the island, a comprehensive
list of phone numbers and any other information we think you may find useful.
* Remember. Jamie & Sheldon SL will do all we can to help you to settle in to your new
life and become successful... all you have to do is ask.
The Mallorquin Lifestyle
In this section we will endeavour to answer some of your questions about life in Mallorca, in order
to help you make a more considered decision on your move to a new country.
This is a huge decision... we know... the majority of our team made the decision to begin
a new life in Mallorca with our families,
and we are delighted that we made the
move.
The information that Jamie &
Sheldon SL have added here is the sort
of information that would have helped us
to make more informed decisions on our
future. It is also based on the questions
that we are most regularly asked by our
clients.
However, if you should have any
further questions do not hesitate to ask
a member of the team... if we do not know
the answer then we are happy to find
someone who does.
Language
Various different Spanish dialects are spoken on the island but the most prevalent is
Catalan Spanish, which is taught in schools. Although many of the Spanish can speak
and understand English they appreciate people being prepared to converse in their own
tongue. It is advisable that you learn basic Spanish. This can take the form of private
lessons, individually or in groups, or as evening classes in the winter.
Finance and Banking
As part of the EC, the official Spanish currency is the Euro.
Nearly all the major Spanish banks have
branches in the resort towns, and most
have a member of staff who can speak
English. Many of the banks have arrangements
with the High Street banks in
the UK, so that transferring funds is a
relatively easy process, usually taking
5 days.
Our own bank, the Banca March
has a branch in East Cheap, London. It is
advisable to keep a UK bank account
available to use, so that cash withdrawal
is easy when you visit the UK. You may
use most credit or debit cards to
withdraw money from a UK bank
account using a Spanish cash point.
All you need to open a bank account in Mallorca is a copy of your passport and a Spanish
address. It will take approximately seven days for you to receive a Euro chequebook.
A cash card has to be ordered separately and can take up to two weeks to arrive. It
is advisable to choose a branch near your business so that banking does not become a
chore.
There is no equivalent to the British Building Society so finance for property and
business purchases is obtained through the banks. It is not possible to raise finance
for a business until you have produced accounts for several years’ trading.
Health Care
Before all the relevant paperwork is completed it is advisable to gain the form
E1 11 from a UK post office, which entitles you to free National Health Service
facilities. As a “self employed” business owner you have to contribute approximately
£140 per person per month to the Social Security System. You will then be able to
sign on with a doctor at your local health centre and use the hospitals without
further charge.
There are also many private health service plans available at approximately £30 per
month, which would enable you to use one of the many private clinics.
Dental treatment is generally private, with charges roughly equivalent to those
in the UK.
Education
As in England there are two types of education available to you on the island.
State Schools
The state schools are free but you are expected to buy the necessary exercise books,
and infant children are required to make a contribution towards stationery.
The school day is shorter. The high summer temperatures mean that the long summer
vacation is approximately 3 months, but there are fewer long holidays throughout the
year.
Overall the standard of education
is high. There is homework and continuous
assessment, so that parents become
an integral part of the learning process.
All the lessons are taught in Spanish and
a basic knowledge of the language before
you arrive would be useful.
In some
schools foreign children are given extra
Spanish lessons so that they understand
more quickly and make new friends.
Wherever you go it does take time for
children to adjust to a new school ... be
patient... they will settle eventually.
The Private Schools
You can also choose to send your children to one of the four free-paying British and
American International Schools on the island. Here they can follow the GCSE and A
level syllabus as in Britain. The classes tend to be small so this encourages the
percentage pass rate to be high. The children can move on to UK Universities
generally having achieved a standard higher than the national average.
Pets
There are many good vets with practices on the island so that you know your pet will
be well looked after. Indeed, there is an English qualified vet located in the south of
the island whom we can thoroughly recommend. Nick Murgatroyd BVSc MRCVS can be
contacted direct on 0034 971 404 459 and has a very informative website: www.palmavet.com. Nick has many years' experience and
originally worked in the Southwest of England.
You are able to import pets into Spain without the need for a quarantine period.
However you will need to have a valid export licence, which will entail each of your pets
being inoculated against rabies and other infectious diseases. They will also need to be
microchipped. Your English vet will have to verify that these procedures have been
carried out, and an export licence is then granted by DEFRA.
Should you wish to return to the UK with your pet in the future, you will have to
acquire a Pet Passport or be prepared to put your pet into quarantine kennels for six
months. It is best that you ask your vet to explain the up-to-date regulations so that
all the paperwork is accurate and your
pet can travel smoothly to Mallorca.
You can transport your pets by road
using the ferries or the Channel Tunnel.
It is also possible to fly your animal airfreight,
or have them transported on
the same flight as yourself.
Only specific
airlines such as British Midland,
Britannia and British Airways have aircraft
with heated pressurised holds,
which can accommodate live animals. By
contacting the airlines you will be given
the necessary details for transporting
your pet.
Accommodation:
Rental
When you arrive in Mallorca it is advisable to rent a property near your business for a
short while, so that you get to know the island before you decide on the area where
you wish to live.
It is hard to give any accurate cost for the rental price of a property as that is
largely determined by its location, the size of the property and amenities. Those
properties on the coast are generally more expensive than those inland.
Prices for a
long-term let tend to be lower than for a short-term let, which will be much higher
during the major holiday periods. For a long-term let you will be expected to sign a
formal contract and pay for two months as a deposit and one month’s rent, in advance.
Freehold
If you choose to buy a property, you can negotiate a mortgage through the Spanish
banks, which is based on the bank’s valuation of the building. You will be able to borrow
approximately 70% of this value, the remainder taking the form of a deposit. You
will then pay approximately 8-10% of the declared purchase price as tax. The mortgage
rate is currently about 5%.
Removals
International removal companies are listed in the UK yellow pages, however we are able
to suggest various companies based on the island who might give you a more competitive
rate than those in the UK. International removal rates are based on volume, and
you will be quoted a price per cubic metre of goods to be carried.
The rate will also
depend on the level of service you require. These companies should insure your goods
and deal with Customs formalities. Remember that if there are more valuable items
you ensure that there is sufficient insurance cover.
Transport
A regular cheap bus service runs throughout the island. As a resident you are entitled
to discounts on public transport, flights and ferries throughout Spain.
Vehicles
You can use your British driving licence for 6 months, but after that time, by law, you
should exchange your UK licence for a Spanish one.
As in the rest of Europe, buying a vehicle on the island is relatively cheaper compared
to the price that you would pay in the UK. Petrol and diesel fuel are cheaper. The road
fund licence is payable annually, the cost varies dependent on the size of engine and
starts at approximately £60 per annum for a small car. MOT tests are required after
4 years and then every 2 years.
You can import your righthand drive British vehicle to Mallorca, however there are
disadvantages; on occasions your vision might be impaired e.g. on roundabouts, and
when overtaking.
When you first arrive on the island it is advisable for you to rent a car for a time,
whilst you organise your business and wait for the necessary paperwork to be
processed. As part of our service we can recommend various car hire firms who offer
economic longer-term car hire rates.
Public Services:
Water
The water standard is in line with EEC regulations and as such is drinkable although
most people prefer to buy bottled water, or to use a home waterfiltration and cooler
unit, as the water on Mallorca generally has a higher mineral content. Mains water is
generally metered and bills submitted every 2 months. The cost of water is cheaper
than in the UK and payment can be made by direct debit through your bank.
Electricity
The Mediterranean climate ensures that you will need to use less electricity on the
island than you would do in UK. Electricity is less expensive than the UK. Generally properties
on the island are 220 volts, so that you can use electrical equipment purchased
in Britain.
It is advisable however, to check the electrical voltage before you rent a property, so
that you can be sure that you can use all your appliances.
Gas
It is most likely that some of the appliances in the house you rent will be running on
bottled butane gas. This is relatively cheap to buy at less than £6 a bottle. This is
either purchased at a depot, or directly from the door-to-door deliveries that
operate in every area, several times a week.
Telephones
Before you have a permanent address on the island the best option is to use a Spanish
“Pay as you Go” mobile phone. In some circumstances, it is possible to unlock a British
mobile phone, which will then enable a Spanish sim card to be used. “Pay as you Go”
mobile phones can be switched onto a monthly-billed contract at a later date if required.
Telephones installed into domestic properties and businesses properties cost approximately
£80 to install. Domestic properties are billed every two months and business
properties are billed on a monthly basis.
Dial-up-internet, as well as ADSL, is available to both residential and business users as
in England. The standard speed is 512KB, however different speeds are available at
extra cost. The cost for a standard ADSL connection is approximately £28 pounds
per month. Dial-up connections are usually paid on a per minute basis and individual
network service providers’ costs vary.
Electrical:
White Goods
You are able to use any electrical goods you have in the UK on the island. You can
either change the electrical appliances to a two-pin plug or use an adaptor with your
existing three-pin plug.
Television and Radio
Local and National television channels are free and provide a wide choice of viewing.
You may wish to install a satellite system. It is possible to receive Sky Digital with a
140 cm or 150 cm dish, but you must retain a UK address and bank account for the
subscriber card.
Alternatively, there are two Spanish systems, either Via Digital or
Canal+. These programmes are broadcast in Spanish, however many of today’s
programmes have dual language capability and English can be selected.
There are many radio stations which play a mix of English and Spanish music.
Religion
The Catholic faith is the predominant
religion in Mallorca. Each village has
their own Saint’s days and fiestas based
on the local church.
Some of the minorities’ religious faiths
have active congregations on the island
and contact numbers for these are
available upon request. |
