We work with business agencies and local estate agencies and we would recommend that you contact one of them to advertise your business for sale.

If you would like us to make a recommendation of which agency to use please email us at info@targetmallorca.com stating your contact details, area and type of business for sale and we will get back to you.

Alternatively you may use the form on our Contact Us page.

Freehold businesses for sale, are seldom seen in the open market as many Mallorcans keep the freehold business as an investment for their families. As if they rent this or Traspas it then the money is a source of income.
For this reason they are few and far between, so if this is what you are looking for and you find a suitable one make sure you close the deal as soon as possible.

Remember that if you then become the freehold owner you can then rent out the business property and receive an income yourself.

With a freehold sale there will usually be an additional 8% to 10% cost on top of the freehold price for notary fees, legal charges and transfer taxes and expenses.

Freehold businesses can usually be financed up to about 60% of the building valuation.

Leasehold Business – Traspaso

Here in Mallorca this is known as Traspaso, The majority of bars, restaurants, cafés etc over here are Leasehold Businesses.

The building shell being owned by the landlord, the buyer owns everything else that forms a part of this business.

The lease term for leasehold business can be for any fixed period with five years being the minimum normal tenure. It is quite normal for this five year period to be automatically renewed for additional periods of five years.
During the contract period you agree to pay a rent to the landlord or freehold owner “Propetario” sometimes this rent is paid annually in advance, sometimes twice yearly and sometimes even monthly is allowed. As long as you pay your rent then everything will be fine with your landlord. Most of them are just looking for a quite life!

During the contract period, the rent either remains fixed or it can be increased only on the basis of the annual ‘cost of living index’ published by the Spanish Government. Currently this is between 2 to 3 per cent.

All this will be checked with us and by your Gestoria before you sign any contract.

These Traspaso agreements are by far the most common forms of business transfer in the whole of Spain and give you an option to be able to sell on the Traspaso at a later date. So if after a few years, if you take a decision to sell or Traspas the property, the landlord would usually agree to a new lease term as per the original contract for the new buyer.
However they do have the option of asking for a rent increase at this time.
So this would be a new lease period and not the remaining years in the old contract. The landlord has the power to terminate the lease only in case of non-payment of rent but this has to be done legally through the court system which is quiet slow in Mallorca.

So in summary, a Traspaso is the most common form of business contract, you buy the Traspaso from the current owner and you pay a rent to the Propetario. You can sell this Traspaso on, if and when you decide to.

Rental Business – Alquiler

Rental businesses or as they are known over here Alquiler are basically what it says. Its a rental of the business premises, they are not very common in the Mallorca bar and restaurant market.

They are more usually for either empty shop or office units. However we do sometimes have bars and restaurants that we can negotiate on a rental contract or some that the owners only want to rent out.

This may have two benefits. If the business is also available with a Traspaso or Freehold option then it may give you a chance to “try before you buy”.
If the business for rent is just a rental contract only, then it could give you an insight into life and work in Mallorca before you make a long term financial commitment.

These contracts can be renewed every year or for a longer fixed period. You don’t make a payment for a Traspaso but would normally be asked for a deposit to cover any equipment and initial bills such as electricity and water.

Any deposit paid would be refundable as long as the business was returned in its original condition and all bills have been paid.

Normally you would be required to pay the first year rental in advance along with the deposit and ingoing legal and administrative fees, then the second year would be just the rental cost only.

Occasionaly you may be able to get agreement from a landlord to turn a Rental into a Traspaso. This would mean you could take an empty unit or a business that is not working well or fitted out properly, invest some time and money into it, turn it into a working business and have the right to sell the Traspaso at a later date.

Although on a freehold property, the banks in Spain may lend up to 60% of the amount, they will probably not be interested in financing the leasehold or rental business.

It may be possible to try to negotiate the terms directly with the business seller for the business, however; you have to understand that the seller would deal cautiously at this point of time as he hardly has anything in terms of security once he signs it over and there will probably be someone else interested in the business who has the money already available.

We can make introductions to banks that have their documentation in English and where with some additional security you may be able to obtain a “Credit Policy” which is similar to a UK overdraft. This may be available to help with refurbishment, but do not rely on getting this as part of your financial plan when buying a business.

If you have UK property then you may be able to secure a loan using that as security to buy a Traspaso based business.

Banking

We believe that the banking service in Mallorca is very simple and easy to understand. However it is different from the UK and you need to be aware of those differences.
There is no cheque clearing system here. If you write a cheque then it will appear in the recipients account as soon as he presents it, likewise it will be gone from your account at the same time.
To be honest cheques are not that common over here, most people still preferring and trusting the cash!
Credit cards, until very recently, were hardly ever seen over here, but they are now becoming more common.
Debit cards are usually provided by the bank when you open a current account but be warned. They normally have a daily spending limit on them This will catch you out and could be embarrassing. Even though you have the money in your account it will still stop you getting it via debit card if you go over your daily limit.
When using a debit card at a supermarket you will probably be asked for your passport as identification so carry it with you.

We would assist in opening a suitable bank account for you. All that is needed is your NIE number and Passport.

It will take 2 – 3 days to get the Sterling transferred from your UK account to your Mallorca account and the same will be converted into Euros at the exchange rate on that particular day.

Many banks here have agreements with UK banks to give preferential UK to Mallorca transfers.

Taxation

You will be pleased to know that the taxes in Mallorca are normally lower than in UK.
There are also two different methods of business Taxation to consider.  A standard system where you pay taxation on your profit and a modular system where various aspects of your business are assessed and then you pay a fixed amount per quarter regardless of your turnover and profit. It is important you choose the best method for your particular business.

There are varying rates of IVA (VAT) here in Mallorca, from 16% which is the standard rate for the usual things you would sell in your bar such as beer and spirits. There are other rates of IVA but your Gestoria will make sure you are charging and book keeping at the correct rates.

It is usual here and more or less expected, that you do not declare all your takings from your business, this is known as black money and the part you do declare is white money. This is why when you ask to view someones books over here you may not get the full picture of the true takings. Best if we don’t go into too much detail, suffice to say we can discuss this with you for any business that you decide to view!

Once again your Gestoria will advise on all the above.