View Full Version : What are the costs of running a business in Tenerife?
Hi I am slowly planning my move to Tenerife and would like to know some experience based answers to some questions.
I have a coaching & writing business which is largely done with skype/telephone/internet. Thus it does not matter where I am based and I have pretty much (90%) decided to move to Tenerife.
I would like to set-up a personal budget as well as a business plan and need to figure out the costs and it would be great if you guys could help me with some Tenerife specific infos.
I will work from home and I am planning to buy without a mortgage. Thus, no rent or mortgage payments. But what are house taxes, fees, garbage collecting etc that I need to budget for?
I heard that there is some sort of data protection certificate that one needs to get when having client files? And that there are companies that one hires for this? Do you have any experience with this?
Also, I heard that if one employs people there is some sort of safety inspection / fee that one has to pay?
Of course I will need internet and phone - preferably one that is powerful enough to do decent skype calls. International phone flat would be nice.
I will also need some part time help and pet/house sitter on occasion as I will likely be travelling. Now I was thinking of perhaps renting out a room in exchange for X hours of work per week. Is this realistic?
In this forum in several threads a monthly charge for setting up a business was mentioned (250€). What is this? What is it for and what is it called?
I find a ton of different and conflicting information regarding health/ social insurance costs. I am currently in the process of getting Spanish citizenship, due to having a Spanish parent. Thus, I'd be coming to Tenerife as a local. Does this make a difference for the insurance? WHat does it cost per moenth? Is it sufficient or does one need to get private insurance as well?
Thank you!
Take a look at this site, loads of infomation http://www.diana-mcglone.com/
She is a much respected forum member.
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Also....... Welcome to the forum :welcome:
In this forum in several threads a monthly charge for setting up a business was mentioned (250). What is this? What is it for and what is it called?
I pay 280 per month, that's your social security going to health care, "state pension" and if you are out of work due to an illness etc
garlicbread
27-08-2013, 10:55
Please take the time to read through this thread, there is tons of info and answers to most f your questions
http://www.tenerifeforum.org/tenerife-forum/showthread.php?334-My-Tenerife-survival-guide-for-new-and-wannabe-expats
9PLUS Thank you. :-) And that 280€ is the charge that people kept referring to? I was not sure whether it was the social security PLUS another approx 250€. So if I understand you right, it is one and the same?
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honda Thank you for your reply. I had found and read through Diana's site before I posted. I have also read for hours here on the forum, but am getting confused as to what applies, what not, etc.
Once I am in the implementation stage I will hire someone to help with all the official stuff plus accountant plus lawyer, but right now, I am just in the information gathering & planning stage. :spin:
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garlicbread thank you. I have been reading for hours on this forum and across the internet for many weeks now. I cannot recall, if I read the thread you posted or not. But I will certainly read it thoroughly. I have done a lot of "homework". The questions I have relate to where I got conflicting info or am not sure what / if it applies.
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ummmm ... I just read the whole thread. It does not have the answers to the questions I posted. So maybe there is a misunderstanding?
garlicbread
27-08-2013, 13:42
You don't say where you are living/working at the moment or why you have chosen Tenerife as a place to relocate to.
In VERY general terms if you can produce a steady income of say 2500 euros a month you can live VERY comfortably in Tenerife.
9PLUS Thank you. :-) And that 280€ is the charge that people kept referring to? I was not sure whether it was the social security PLUS another approx 250€. So if I understand you right, it is one and the same?
You're welcome, €280 is the charge people keep referring to. One social charge that's correct, then there's all the other payments you have to make, like in most counties, some things are less and some are astronomical ie the social charge.
KirstyJay
27-08-2013, 15:51
I will work from home and I am planning to buy without a mortgage. Thus, no rent or mortgage payments. But what are house taxes, fees, garbage collecting etc that I need to budget for?I believe it will depend on the area you live, the Ayuntamiento you are under and the price of your house. You will have I.B.I. tax and basura (bins) to pay. Basura is about 45 a year (I think) for me. You will obviously have water and electric too, which will vary depending on the house and your usage.
I heard that there is some sort of data protection certificate that one needs to get when having client files? And that there are companies that one hires for this? Do you have any experience with this?I have no idea about this one.
Also, I heard that if one employs people there is some sort of safety inspection / fee that one has to pay? Not sure about safety inspection fees, but you 'should' give them a contract, which will mean monthly fees for their social security and the cost of a gestor laboral to sort out the contracts for you. Budget about 100 to 150 a month. Social security will depend on the length of the contract.
Of course I will need internet and phone - preferably one that is powerful enough to do decent skype calls. International phone flat would be nice.
If you want powerful internet, then you will need to research the location you want to live in carefully. It will also probably mean that you live in a more expensive area, as the villages (where houses are cheaper and you have more space) do not get good connections. Internet will probably cost you about 50-70 a month and depending on the package can include your TV and Mobile too. See www.movistar.es.
I will also need some part time help and pet/house sitter on occasion as I will likely be travelling. Now I was thinking of perhaps renting out a room in exchange for X hours of work per week. Is this realistic?
Possibly, it depends on your offer and whether anyone's interested ;)
In this forum in several threads a monthly charge for setting up a business was mentioned (250). What is this? What is it for and what is it called?
It's called your 'autonomo' RETA payments. Mine is 254 a month and it's basically what I pay to be registered self employed. It really depends whether you are setting up as a business in Spain, or you will be fiscally resident elsewhere as to whether you need this. The cost is the same every month, regardless of your profits.
I find a ton of different and conflicting information regarding health/ social insurance costs. I am currently in the process of getting Spanish citizenship, due to having a Spanish parent. Thus, I'd be coming to Tenerife as a local. Does this make a difference for the insurance? WHat does it cost per month? Is it sufficient or does one need to get private insurance as well?
If you are autonomo your social security payments are included so there is no more to pay. You don't need private insurance, but as in any other country, you can get it if you want. Personally I'm very happy with my treatment on the social security health system.
You don't say where you are living/working at the moment or why you have chosen Tenerife as a place to relocate to.
In VERY general terms if you can produce a steady income of say 2500 euros a month you can live VERY comfortably in Tenerife.
I know! Please forgive me my secrecy. It is not normally my style, but I am currently in severance negotiations and I am absolutely neurotic and terrified that by some stupid fluke the company might come across my posts here. I currently have a full time job. This would of course fall away. But, I have been on the side building up a self employed business which currently generates a minimum of 2500 (pre-taxes though) a month with a clear potential of more, if I have the time to take on extra business which currently I do not due to my full time job. Plus there's the severance which can tide me over rough spots.
Thank you for the info. That is very helpful.
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.., then there's all the other payments you have to make, like in most counties, some things are less and some are astronomical ie the social charge.
Yeah :-D Those are the ones that I try not to think too much about because I get so annoyed at the government. :-D I think tax rates are fairly similar though.
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I believe it will depend on the area you live, the Ayuntamiento you are under and the price of your house. You will have I.B.I. tax and basura (bins) to pay. Basura is about 45€ a year (I think) for me. You will obviously have water and electric too, which will vary depending on the house and your usage.
I have no idea about this one.
Not sure about safety inspection fees, but you 'should' give them a contract, which will mean monthly fees for their social security and the cost of a gestor laboral to sort out the contracts for you. Budget about 100 to 150€ a month. Social security will depend on the length of the contract.
If you want powerful internet, then you will need to research the location you want to live in carefully. It will also probably mean that you live in a more expensive area, as the villages (where houses are cheaper and you have more space) do not get good connections. Internet will probably cost you about 50-70€ a month and depending on the package can include your TV and Mobile too. See www.movistar.es.
Possibly, it depends on your offer and whether anyone's interested ;)
It's called your 'autonomo' RETA payments. Mine is 254€ a month and it's basically what I pay to be registered self employed. It really depends whether you are setting up as a business in Spain, or you will be fiscally resident elsewhere as to whether you need this. The cost is the same every month, regardless of your profits.
If you are autonomo your social security payments are included so there is no more to pay. You don't need private insurance, but as in any other country, you can get it if you want. Personally I'm very happy with my treatment on the social security health system.
Thank you. That was a very helpful answer and exactly what I was looking for. Apart from the social security / health care payment it seems as if the costs are very comparable to my country. I am amazed how inexpensive the health insurance/social security bit is. How do they do it?
Has anyone here tried satellite internet? I came across an ad for that it sounds too good to be true. :-) My big problem will be that I want to live isolated with some land around the house, but still would like the amenities of living in a town. It seems there are some places for sale that are off grid (with solar, own water, etc) but I wonder how much of a hassle that would be to keep everything working and if it is not a bit too "rustic" for my taste. :-D
Satellite internet is very expensive due to the location of the islands the signal comes from the African regions. We live in a very rural area up the mountain, no fixed phone line we have a TRAC phone from Movistar which is basically a mobile but on a fixed line rate, we have a good WiFi connection of 6Mb about €62 per month inc. IGIC with WiFi Canarias (http://www.wificanarias.com/index.php/es/) , it can go down but is overall good reliability. The speed available can vary depending on where you live in relation to the distance to where the signal comes from, we live about 5km from the aerial.
LosRoques
28-08-2013, 09:51
Thank you. That was a very helpful answer and exactly what I was looking for. Apart from the social security / health care payment it seems as if the costs are very comparable to my country. I am amazed how inexpensive the health insurance/social security bit is. How do they do it?
They don΄t... which is one of the (many) reasons Spain is such a fiscal mess right now....
Has anyone here tried satellite internet? I came across an ad for that it sounds too good to be true. :-) My big problem will be that I want to live isolated with some land around the house, but still would like the amenities of living in a town. It seems there are some places for sale that are off grid (with solar, own water, etc) but I wonder how much of a hassle that would be to keep everything working and if it is not a bit too "rustic" for my taste. :-D
You don't need satellite internet, plus the cheap version is download only, you still use the phone line for outbound.
We've got a nice big plot of land with our house in the middle of it, nothing but trees and hills behind us, land dropping away in front of us with views to the sea, nearest other house is several hundred meters away. We're less than 3 minutes by car from the nearest town centre which includes supermarket/bakery/post office etc. And we have a 10mb internet connection which consistently gives about 9mb (though we have a decent router - the noddy things Movistar give you rate about 7.5/8mb). Skype works perfectly.
Sounds idyllic and it is! BUT we spent a long time looking for it - about 3 years to find the right place for us at the right price. Some rural prices are unrealistic; for example, we saw a place with half as much land and a building that would have to be pulled down and re-built (though it did have permission for this) for more than the place we have now. Truthfully we didn't choose it based on internet speeds, we got lucky. When we first moved in 6 years ago it was 3mb then went to 6mb then 10mb over about a 3 year period.
As KirstyJay says, connection quality varies wildly from place to place; we have friends that live in a more densely populated area than us, the fastest connection they can get is 6mb and they typically only get 4 or 5 out of it.
My recommendation; find somewhere to rent, plan to live there for at least few months and travel around looking at the different areas, spend time going around different properties. The Movistar website will tell you what speeds you can get in which areas.
9PLUS Thank you. :-) And that 280€ is the charge that people kept referring to? I was not sure whether it was the social security PLUS another approx 250€. So if I understand you right, it is one and the same?
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honda Thank you for your reply. I had found and read through Diana's site before I posted. I have also read for hours here on the forum, but am getting confused as to what applies, what not, etc.
Once I am in the implementation stage I will hire someone to help with all the official stuff plus accountant plus lawyer, but right now, I am just in the information gathering & planning stage. :spin:
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garlicbread thank you. I have been reading for hours on this forum and across the internet for many weeks now. I cannot recall, if I read the thread you posted or not. But I will certainly read it thoroughly. I have done a lot of "homework". The questions I have relate to where I got conflicting info or am not sure what / if it applies.
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ummmm ... I just read the whole thread. It does not have the answers to the questions I posted. So maybe there is a misunderstanding?
Your not the only one confused! Most of us residents cant keep up with all the system/law changes
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Personally, I wont give any info or advice when it comes to this kind of stuff because if you try to help, the advice you give may well be outdated by the time you need to use it
We've got a nice big plot of land with our house in the middle of it, nothing but trees and hills behind us, land dropping away in front of us with views to the sea, nearest other house is several hundred meters away.
My recommendation; find somewhere to rent, plan to live there for at least few months and travel around looking at the different areas, spend time going around different properties. The Movistar website will tell you what speeds you can get in which areas.
THat sounds exactly like the place I will be looking for. I realize that renting first etc is the recommended standard option. But since I will be moving with 22 animals, for me, it is unfortunately not an option. NObody in their right mind would rent to me. :-D
As it is, I finally have gotten the severance agreement with my employer and will terminate end of this year. I am now decluttering the house and meeting with real estate brokers in the coming week to put my house here on the market. It is a rather specialised house (ok. little farm), because some of the building was done for the animals. Once I have a sales contract, I will be rushing to Tenerife to buy something. I know this is not ideal and the logistics of it all are daunting. But somehow, I will find a way to make it work. :-)
We've got a nice big plot of land with our house in the middle of it, nothing but trees and hills behind us, land dropping away in front of us with views to the sea, nearest other house is several hundred meters away.
My recommendation; find somewhere to rent, plan to live there for at least few months and travel around looking at the different areas, spend time going around different properties. The Movistar website will tell you what speeds you can get in which areas.
THat sounds exactly like the place I will be looking for. I realize that renting first etc is the recommended standard option. But since I will be moving with 22 animals, for me, it is unfortunately not an option. NObody in their right mind would rent to me. :-D
As it is, I finally have gotten the severance agreement with my employer and will terminate end of this year. I am now decluttering the house and meeting with real estate brokers in the coming week to put my house here on the market. It is a rather specialised house (ok. little farm), because some of the building was done for the animals. Once I have a sales contract, I will be rushing to Tenerife to buy something. I know this is not ideal and the logistics of it all are daunting. But somehow, I will find a way to make it work. :-)
Satellite internet is very expensive due to the location of the islands the signal comes from the African regions. We live in a very rural area up the mountain, no fixed phone line we have a TRAC phone from Movistar which is basically a mobile but on a fixed line rate, we have a good WiFi connection of 6Mb about 62 per month inc. IGIC with WiFi Canarias (http://www.wificanarias.com/index.php/es/) , it can go down but is overall good reliability. The speed available can vary depending on where you live in relation to the distance to where the signal comes from, we live about 5km from the aerial.
DO you still have a separate phoneline or are you using the internet for your phone calls as well?
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