How to do business in the Canary Islands

What are the first actions necessary to start your own business in the Canary Islands?

Small and medium-sized companies are the backbone that supports theItalian productive economic system.

Spain is no different.

Indeed in the Iberian world, and in particular at Canary Islands, there is a real cult of "self employed”, inserting in this definition the circa 3,2 millions of small businesses on which Spain's GDP is based, mostly employed in the service sector.

Agriculture: 11,5%.
Industry: 4,4%.
Construction: 10,9%.
Services: 73,2%.

In this national system, is foundmicro Canary World, where the offer of services through the form of is even more widespread self employed.

A significant and constantly growing number, beyond 50.000 companies, almost double the 2016.

It is an increase due not only to the characteristics of the economic fabric of the islands but also tothe incentive policy from each individual Region (Council) island and every municipal administration (City hall).

An Italian who approaches this world of work as a self-employed worker will suffer an emotional shock upon discovering that in this nation there is a constant commitment to equating the employee with the self-employed. (sickness benefit, of unemployment, minimum social security contribution of 15 years, etc.), even more so by discovering that they can unify their Italian contribution period with the Spanish one.

The Canary Islands base their economy on tourism with a turnover of approx 16 billion euros in 2019 and with beyond 15 millions of visitors.

The Canary Islands can be defined as a true paradise on earth, and not only for the natural beauty and climate, but also for the social system, economic wealth and fiscal organization, and not least for its friendly and helpful people.

However, establishing a new company in these places responds, more than ever, allmarketing rules that governs every business in the Western world.

If it is true that, in recent years, excellent work has been done in the Archipelagoderegulation burocratica, the set of rules in force are few but very rigorous.

Rules that one can approach with a calm mind when faced with public offices, always available and on the user's side.

Often in Italy, the lengthy bureaucracy overshadows all the effort that must be made, prima, to start your own business and then to get it off the ground.

However the market and the competition, here as everywhere, they don't give discounts.

Each of the 7 islands that make up the Canary Archipelago, (The Palm, Tenerife, La Gomera, Grand Canaria, Fuerteventura and Lanzarote), until the last one arrived, the smallest, the eighth, (the Gracious), presents its own characteristics in reference to the quantity and origin of tourists each year.

What are the first actions necessary to start your business?

Who is not in his first company, he knows well thatIt is not enough to have capital to start your business if you do not first develop a real strategic plan..

The risk of underestimating the characteristics of the place, where you choose to operate, it can be the first cause of failure of your business.

Choosing the legal and fiscal form of your company, may prove harmful to its survival, affecting profits, due to incorrect organizational options, after just a few months of work.

In this short article, I want to encourage every new entrepreneur in the Canary Islands to proceed with caution but decisively in planning the birth of their business and its launch.

I 4 fundamental steps:

• Market Analysis
• Company Constitution
• Communication Plan
• Training

Market Analysis

“Well, I decided to come and be my own entrepreneur in the Canary Islands".

“I have some capital, that albeit modest, it will be enough, given the lower costs of this new world".

“I have a fair amount of experience gained in my country of origin”.

These are the three basic statements to address thetransfer of your business from Italy to the Canary Islands or even to implant a new one, starting from scratch.

The first necessary step is to evaluate which of the Islands best suits your expectations, both for the availability of capital (each island will have a different cost, not just for rent, for the works that will be necessary for your commercial premises, but also for the general cost of living).

You will need to evaluate your propensity tolearn a new language, if you don't already know another one besides Italian (the Italian community is present in all the islands but the maximum concentration is in the north of Fuerteventura, where it is now the most widespread).

It will be mandatory to evaluate how compatible it can be with the uses and characteristics of the location where we intend to plant the idea we have about our business (each part, even within a single island, presents various economic characteristics, for greater or lesser tourist presence).

If I will operate onLanzarote, I will mainly have to deal with a massive presence (sedentary and tourist) of English, with profound tastes and needs different from those we are used to in Italy.

But if I choose Corralejo (the north of Fuerteventura) I will have to deal with a majority (circa 10000) Italians, coming from all regions, and I will be able to continue to think and act almost like in Italy.

Unlike the south of the same island where the prevailing ethnic group is that from Germany.

If I choose Las Palmas, the capital of the Canary Islands, I will have to be ready to deal with a large Spanish city with over half a million inhabitants, with a profoundly international scope.

There are manyMultinational companies that are moving their legal and tax management to Gran Canaria from all over the world.

So I will have to stay for a period where I have chosen to come to live and work to get to know the characteristics of the area as much as possible, make a cost assessment, search for the best location for my business, verify the level of marketability of my idea with respect to the characteristics of the place.

Evaluate whether to set up my company from scratch or take over a pre-existing one (TRANSFER). This last choice may appear the simplest, quick and least risky. Instead, from experience, this choice often turns out to be the most dangerous if you are not assisted by a trusted professional.

In another article, we will face, in great detail, the theme of this commercial institute, the transpaso, which has now become a feature of the commercial takeover but which is full of risks, because we have to deal with a tax system different from the Italian one and with a law on rentals that still does not fully protect commercial activity.

In short, you will have to prepare your own personal “Market research”, unless you decide to entrust a professional with the preparation of an appropriate and personalized study.

Company Constitution

The second step to take isthe legal birth of your company.

Every island, whilst in compliance with Spanish national law, presents diversified procedures even just in the first and indispensable step which is that of obtain the NIE, or the alien's identification number, fundamental even if you decide to do a period likeemployee, oeven if you are retired.

If I choose to set up a joint-stock company, I will have to deal with legislation that is profoundly different from that of my country of origin.

Times, constitution systems (online or by notarial means), obligations during the establishment phase and then management, they will have to be carefully evaluated with the help of professionals who know how to interpret future programs.

If I opt for an individual company, or a family business, it will be best to choose the most appropriate time of year and the relevant procedure for accessing thenon-repayable contributions who recognize each other atstart up “coming from situations of unemployment”.

The good news is that in Spain there are no Chambers of Commerce or Professional Registers, but only public registers which can be accessed with universal right and not through examinations, competition or stringent and limiting requirements.

The second step will be the choice oftype of fiscal management: flat rate, simplified or ordinary.

A choice that could affect my future life for at least three years.

Finally the location was identified, stipulate a rental contract that responds well to investment needs over time.

Although the regulations are evolving, aIn the Canary Islands there is no legal provision for a minimum time 6 years plus others 6, or in the case of hotels 9 years more 9, as happens in our country of origin.

Once again good advice will be to make use of a good professional, avoiding limiting yourself to the advice of real estate companies who often risk finding themselves in a conflict of interest.

So we will be ready to face the municipal bureaucracy whether it concerns Traspaso or whether we want to start a new company.Here too a sort of SCIA will be necessary, (communication of commencement of activity), presented which and paid the initial fee will give us the right to start the work.

The necessary works inside and outside the shop, bar, be it a restaurant or office, they do not require a laborious and unnerving practice that we know well.

We won't have to deal with exhausting meetings with the offices of the Municipality and the social health company and the indications to follow are precise and unambiguous, Usually, solved brilliantly by expert surveyors or engineers, the cost of which is usually low.

The choice of the type of contract to stipulate with the employees is the last of the choices to be made with extreme care.

Finally, if everything is the result of a well-planned strategic plan, within two or three months you can celebrate with the inauguration of your business.

Communication Plan

In a place like the Canary Islands, where everything is based on seasonal tourism, which however lasts all year round (sea ​​from January to December); where there is a very frequent turnover in commercial management; dovethe settled population is constantly changing, advertising communication is particularly complex.

Classic flyer printing can prove difficult, expensive and inappropriate; just consider that a tourist spends his holidays on 10 ai 15 days on average.

Periodic billboards are not a custom except with fixed systems and for a long time with considerable costs.

In the digital age, develop an effectiveeditorial plan, managing their ownpresence on social media turns out to be the most dynamic choice, effective and above all less expensive.

But be careful with "do it yourself", using a good professional will make the difference in our business.

If we can also coordinate with agood program of events that make our new commercial presence or new management known, the results can be verified quickly.

Training

This option turns out to be the most overlooked, preferring to rely on one's own experience, sometimes only from consumers or based on the CV of the person you decide to hire.

Nothing could be more wrong.

Although, before moving to the Canary Islands, we used to have breakfast at the bar every morning, it doesn't mean, in itself, know how to manage a bar-diner.

Often excellent commercial activities, well positioned, with targeted arrangements, with a choice of quality products, they see a reduction in their revenues and the number of customers, precisely for having neglected this fundamental element in the management of any activity aimed at the public.

Every nation has its typical relational habits, but in a cosmopolitan tourist area like the Canary Islands, knowledge of the preferences of different ethnic groups cannot be ignored.

It is not possible to neglect the training of your staff also based on the knowledge of those few but severe rules that public administration requires.

Refresher internship on knowledge of new products, of new equipment and rules governing commercial activities, they are the basis of any successful business.

The genius of an entrepreneur has always and everywhere made the success of his business, but precise and punctual planningit will make your business grow more quickly and achieve greater satisfaction.

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