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Updated: 05-10-2010

Do you need a Business License in Tenerife?

It is quite natural to expect that a business you might be considering buying has all the licenses it requires to trade legally granted. However in many areas of Spain and Tenerife in particular, this is often not the case. If a Tenerife business license has not been officially issued, it does not mean that the business is trading illegally.


Most buyers of Tenerife businesses come from other countries and the Spanish bureaucratic system can come as something of a surprise. In countries such as the UK or Ireland, Germany or Switzerland the local authorities will tend to be efficient in the granting of licenses. Although buyers may expect this to be the same in Tenerife, clearly it is not. However, this does not mean that the buyer should worry; it is still possible to buy a business without a license with complete peace of mind.


To understand this, we need to look behind the scenes and understand what is legal and what is not regarding business licenses. In Spain, you are operating legally as long as you have correctly submitted an application for a license, you have paid the application fee, and your premises match the description in the license application. Licenses must be filed correctly with all the associated proof such as a diagram from an official ‘arquitecto tecnico’. The actual business and its premises must comply with the relevant bylaws, and this will be included in the license application.


The application is submitted to the local town hall, which is called the ayuntamiento in Spanish. It is up to the town hall to approve the application or turn it down. If they are to turn it down, then they must do so within a limited timeframe.


Town halls vary in their efficiency. For example, in the South of Tenerife the ayuntamiento of Adeje is very efficient by local standards. Municipalities such as San Miguel de Abona or Santiago del Teide are also fairly efficient. Arona is one of the most inefficient councils in Spain when it comes to the granting of business licenses. Within this municipality is the busy tourist area of Los Cristianos, and there are innumerable bars and restaurant that have been trading for many years and still have yet to receive their official license from the town hall.


If you are considering buying a business without an approved license then there are certain steps you must take. You should ask for copies of the license application. Get your lawyer to check these license applications to ensure that everything is in place. Check that the description of the premises is accurate. It is important to ensure that the business complies with everything stated within the license application.


If you are buying a business and want to change the license then check with you lawyer about the cost of changing the license. For example, if you want to change the hours when the business is open so that you can trade in the early hours of the morning, this will be more costly than a license for a business that is only open during the day. Check the requirements of the license and the cost of making any changes to your premises that might be needed to comply with the new type of license. For example, if you want to play live music and host entertainers, then soundproofing may be required. Get your lawyer/gestor to fill in and submit the application, to ensure that it is completely correct. So long as the above is done correctly (and the fees paid) you will be able to trade under the new license terms.

By Irina Saltmarsh

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