Buying a Business in Spain

Buying an existing business in Spain can be an attractive alternative to starting a company from scratch. An established business may already have customers, employees, equipment and well-organised operations.

However, along with these advantages, buyers may face outstanding debts, problems with licences, lease agreements or obligations towards employees.

Before buying a business in Spain, it is essential to carry out thorough legal and financial due diligence.

Buying a Company or an Existing Business: What Is the Difference?

There are several ways to acquire an existing business in Spain. Two common options are:

1. Buying company shares (compraventa de participaciones)

The buyer acquires shares in a Spanish company, such as a Sociedad Limitada (SL), and becomes one of its shareholders or its sole owner.

The company itself continues to operate with its existing contracts, assets and liabilities.

This means that outstanding debts and legal problems do not disappear when the ownership changes.

2. Buying an existing business or its assets (traspaso de negocio)

The buyer purchases certain business assets, such as equipment, stock, customer relationships and other agreed assets. Depending on the transaction, the rights to lease commercial premises may also be transferred.

This type of transaction is common when purchasing restaurants, cafés, shops and other commercial businesses.

However, purchasing business assets does not always protect the buyer from previous liabilities. In certain circumstances, Spanish law provides for the transfer of employment obligations and liability for outstanding taxes.

For this reason, the most suitable transaction structure should be determined before signing any agreement.

What Should You Check Before Buying a Business in Spain?

A comprehensive investigation of a business is known as due diligence. Its purpose is to identify legal and financial risks before the buyer commits to the purchase.

Several areas require particular attention.

1. Financial Situation and Outstanding Debts

It is important to review financial statements, outstanding bank loans, debts to suppliers and public authorities, as well as the company’s actual income and expenses.

Information about registered companies and their filed financial statements can be obtained through the Spanish Commercial Registry (Registro Mercantil).

2. Tax Obligations

Buyers should check whether the company has submitted its tax returns and paid its taxes on time.

When acquiring an operating business, the buyer may, in certain circumstances, become liable for the seller’s outstanding tax obligations.

It is therefore important to consider obtaining the relevant certificate from the Spanish Tax Agency before completing the transaction.

3. Employees and Employment Contracts

If the transaction involves the transfer of an operating business that continues its activities, employment obligations may transfer to the new employer.

It is essential to examine employment contracts, outstanding salaries, social security contributions and any ongoing employment disputes.

4. Commercial Leases and Business Licences

For restaurants, retail shops and beauty salons, the premises and operating licences are often essential to the value of the business.

Before purchasing, buyers should establish:

• Can the business continue operating from the premises after the transaction?
• What conditions and restrictions apply under the lease agreement?
• Are all necessary licences and permits valid?
• Will any documents need to be transferred, renewed or updated with the relevant authorities?

The fact that the seller holds a valid business licence does not necessarily mean that the buyer can automatically operate under the same conditions.

What Are the Most Common Risks When Buying a Business?

One common mistake is relying exclusively on the profits declared by the seller.

For example, a buyer may be offered a successful café in a popular location with an established customer base.

However, a legal review may reveal that the lease is about to expire, some equipment is subject to a leasing agreement, and the business has outstanding financial obligations.

These issues can significantly affect the value of the business or make the investment financially unattractive.

Buyers should also be cautious if the seller refuses to provide documents, insists on an immediate deposit or cannot substantiate the claimed revenue.

How Does the Process of Buying a Business in Spain Work?

The purchase process generally involves several stages:

1. Initial negotiations. Agreeing on the scope of the transaction, the proposed price and the main commercial terms.
2. Legal and financial due diligence. Reviewing documents, liabilities and potential risks.
3. Negotiating the purchase terms. Establishing the final price, payment arrangements and seller warranties.
4. Preparing and signing the agreement. Completing the legal documentation according to the transaction structure. Transfers of shares in an SL must be formalised in a public document.
5. Completing the necessary formalities. Transferring the agreed assets, registering changes where required and obtaining any necessary approvals or permits.

The purchase agreement should include appropriate protection against inaccurate information and undisclosed liabilities. Depending on the transaction, additional safeguards may also be necessary.

Can Foreigners Buy a Business in Spain?

Yes. Foreign nationals can purchase companies and existing businesses in Spain.

However, specific requirements may depend on the buyer’s nationality, the nature of the investment and the transaction structure.

It is also important to understand that buying a business does not automatically grant the right to live or work in Spain.

If you are considering starting a new company instead, you can learn more about our company formation services in Spain.

Legal Assistance with Buying a Business in Spain

Purchasing an existing business is a significant investment decision. Professional legal due diligence helps buyers identify potential risks, negotiate appropriate contractual protections and avoid unexpected expenses.

Lusa Legal is a Barcelona-based law firm with over 20 years of experience providing legal assistance to international clients.

Our team supports foreign entrepreneurs and investors with document reviews, contract preparation and legal assistance throughout business acquisition transactions.

If you are planning to acquire an existing company or business, explore our business purchase services in Spain or contact Lusa Legal for an individual consultation.