Many Brits move to Spain thinking they'll easily start up a new business
there and live happily ever after. Unfortunately a large percentage of these
Expats face financial ruin due to lack of knowledge, poor financial planning
and unrealistic expectations. As a result many expats return home poorer
and disillusioned having found it impossible to establish an income in Spain
and using all of their savings to survive.
If you're considering a new life in Spain then these handy tips from Yolanda
Solo, author of "Spain: The Expat Survival Guide" will help you avoid the
financial traps that leave you broke.
1. Build a Safety Net
Before coming out to Spain you should work out the minimum you are going to
need to survive for at least 12 months and make sure you have it stashed
safely away in case you get in trouble. If you find yourself eating into this
safety fund then this gives you a good early indicator that you're not
self-sufficient in Spain.
Wherever possible you should consider renting out your home in your own
country rather than selling it so that you at least have an asset that's worth
something should your Spain plans fail.
2. Consider Testing Your "Good Idea" At Home First
If you've never run a successful business before then it's not going to be any
easier in Spain. If anything, as an expat who may have limited Spanish
language skills, you'll be at a massive disadvantage. Of course, tourism
businesses that rely on local attractions will only work in Spain but other
businesses should be setup and stable in your home country before you opt to
"export" them to Spain.
3. Beware The Setup and Ongoing Costs
Starting a business in Spain costs more than you might expect and as soon as
you're up and running the government will expect a hefty national insurance
contribution every month whether you're making money or not. The alternative
is to do it the "dodgy" way but sooner or later expats going down this route
will get caught, fined, kicked out of the country or locked up. If you don't
think you'll be able to cover your day-to-day costs (like mortgage payments,
food,living expenses and running costs) plus at least 250 Euros for
essential taxes each month on top then seriously reconsider how
you expect to survive.
4. Don't Assume You'll Make Money Out of "Wealthy" Expats
Think about it - if you've scraped together your life savings to leave your
old life behind and you're struggling to make ends meet then you're probably
not alone. From my own experience, many expats are just about surviving
financially in Spain. So if you're hoping they'll have plenty left over for
your pampering, coaching or personal shopping services you'd do well to make
Businesses that can become part of the stable local community or that cater to
tourists who expect to pay for recreational businesses are a safer bet than
relying on other expats for your income.