Where are the best places in Spain to set up a business aimed at foreigners?

If you have dreams of starting a business in Spain aimed at other foreigners, here are the best regions do it in and your potential target markets.

nerja spain
The Málaga town of Nerja is very popular with Swedish nationals who choose to move to Spain. Photo: Martin Vonk/Unsplash

Spain is very popular relocation destination, with foreigners making up around 12 percent of the population.

Even though many of them move here to improve their quality of life, there are plenty of newcomers who decide to start their own business here rather than try to get a contract job.

If you have dreams of starting a business in Spain aimed at other foreigners, here is some inspiration. 

If you want to sell fried breakfasts to the British, move to Alicante  

Everyone knowns that Spain is popular with Brits, but which regions do most of them live in? There are believed to be over 360,000 Britons living in Spain, with that number expected to increase before the Brexit transition period is over in December 2020. According to Spain’s national statistics agency, Alicante is the region favoured most by the British with over 69,000 calling it home.

There are in fact several towns in the area where the number of British people outnumber the number of locals. So, if you want to move to Spain and open up a business selling the best full English breakfasts around, then you might want to think about one of these towns: Poble Nou de Benitachell, where half of the town are British; San Fulgencio, where a third of the 8,000 people there are from the UK; or the small village of Daya Vieja, where a whopping 60 percent are British.

Alicante: Photo: Vicente Viana/Pixabay

If you want to sell Guinness to the Irish, move to Barcelona

The Catalan capital of Barcelona is home to the biggest concentration of Irish nationals in Spain. There are many different Irish groups and clubs in the city, so you can be sure to feel at home. The city already has many Irish pubs, so you’ll be in good company setting up a business to cater to the Irish population.

Barcelona of course offers a great lifestyle, with beaches and mountains within the city, plenty of art and culture, and a lively nightlife.

Barcelona. Photo: Joaquin Aranoa/Pixabay

If you want to sell imported candy bars to Americans, move to Madrid

Madrid is the most popular area to live in for Americans. Figures from Spain’s national statistics agency show that the Community of Madrid is home to more Americans than any other autonomous region in the country. It is estimated that over 10,600 Americans live there. This is more than a quarter of all American citizens in Spain. Madrid is also one of the few places in Spain where English speakers are more likely to be American than British. Americans in the capital actually make up 40 percent of the English-speaking population.

So, if you have dreams of setting up an American supermarket, importing everything from Butterfingers and Jolly Ranchers and Kool-Aid to Pop-Tarts, then Madrid would definitely be the Spanish city to do it in.

Madrid. Photo: Surya Namasté/Pixabay 

READ ALSO: What’s it like to set up a bed and breakfast in Spain?

If you want to sell preserved fish to the Swedish, move to Nerja  

If you’re thinking of setting up a company importing and selling pickled herring, cured salmon and crisp breads, then the place to go is Nerja. Nerja is a municipality in the Costa del Sol, in the province of Malaga. The town of Nerja itself has several sandy beaches, as well as a vast cave complex.

Move to Nerja and you’ll be close to all the popular Costa de Sol resorts, as well as the cultural capital of Malaga. The Swedes make up the second-largest foreign population in Nerja and many have bought second homes there. You’ll also find many Swedish groups and associations there to sell your products to.

Nerja. Photo: Manolo Franco/Pixabay

If you want to start a stroopwafel café for the Dutch, move to the Valencia region

The Valencia region is very popular with Dutch nationals, with more of them buying homes there than in any other region of Spain. The coastal area of the Costa Blanca is where most of them choose to settle. The second most popular region for Dutch is Andalusia, where there are also a lot of Dutch companies.

You could choose to set up your café, selling homemade Dutch-style caramel waffles in popular towns such as Javea, Dénia, Villajoyosa or even Alicante.

Costa Blanca
Costa Blanca. Photo: Alex Gresbek/Pixabay

If you want to open a German beer garden, move to Torrox

The Andalusian municipality of Torrox, lies to the west of Nerja and sits approximately half way between the cultural cities of Malaga and Granada. Move to Torrox and you could be spending weekends in Malaga admiring art or weekends in Granada exploring the Alhambra or gorging on free tapas.

Torrox is the most popular place in Spain for Germans with more than 3,000 residents. It is estimated in fact that around 15 percent of Torrox residents are German. There are many German businesses in the area, so you won’t have any problem fitting in, if you want to market your products to the Germans. Torrox even has its own Oktoberfest each year, so it could be the perfect spot if you’ve ever dreamed of opening a beer garden selling steins of beer and pretzels.

Torrox. Photo: Ernesto Perez/Flickr


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La Renta: What items can you deduct on your Spanish tax return?

Find out what costs you can and can't claim back on your annual Spanish tax return or 'declaración de la renta'.

La Renta: What items can you deduct on your Spanish tax return?

Spain’s annual tax return is known as the declaración de la renta and completing it or knowing what you can claim back as an expense can be quite tricky, particularly because there are many regional differences too. 

Anyone residing in Spain for more than 183 days and earning over €22,000 a year, who is self-employed (autónomo), or moved here in the last year, must complete it. 

Your Spanish income tax return has to be filed by June 30th for the preceding year, in this case for 2021.

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

There are many different allowances or deductions that can be made on your tax return such as deductions for couples, children, single parents, elderly parents, disabilities and large families, may of which we have covered in previous articles such as this one here

This article, however focuses specifically on costs that you can claim back on your tax return. For example, can you deduct rental or mortgage expenses, property tax or private health expenses? Read on to find out. 

READ ALSO: How to complete Spain’s Declaración de la Renta tax return

Spanish pension contributions

Up to €2,000 can be deducted for contributions to pension plans or up to 30 percent of the tax base (total income).

Property tax

Those who own a property in Spain will pay the yearly Impuesto Sobre Bienes Inmuebles, better known as IBI. This is similar to council tax in the UK and one of the expenses you can claim back on your annual declaration.

The costs of renovating your main home

Keep in mind, that you can’t just deduct the cost of any renovations on your home, particularly if they’re just cosmetic, but you can deduct for any renovations which reduce the demand for heating and cooling by at least seven percent. In this case, you can apply a 20 percent deduction, with a maximum of €5,000. 

Buying or rental costs of your main home

This expense can only be deducted by those who bought their property and signed the mortgage before January 1st, 2013 and must have included it in previous declarations. In the case of those who are renting, the signing of the contract must have been made before January 1st, 2015.

The tax benefit is up to 15 percent with a maximum limit of €9,040, while the maximum deduction will be €1,356.  

Some regions will also allow you to deduct further expenses if you buy a house in a rural area or habitually live in an area at risk of depopulation, such as in Andalusia, Cantabria, Castilla La-Mancha, Extremadura, Galicia, La Rioja and Valencia.  You can also deduct expenses for the cost of buying a residence for a particular group of people, be it young people in need, victims of domestic violence, disabled people or large families.


Donations of many kinds can be deducted on your annual tax declaration, whether they’re charitable donations, donations to cultural institutions, donations for scientific advancement, innovative technologies or the environment.

Generally, you can deduct 80 percent of the first €150 and 35 percent of any donations after that. If you have any doubts as to whether the donations you made last year can be included, it’s best to check with your accountant or gestor.

For educational studies and textbooks

Many times, you can deduct the cost of education and the textbooks associated with them. In general, you can deduct 15 percent of school fees; 10 percent of language courses and; five percent of the cost of purchasing clothing for exclusively school use.

However, this does not include claiming back for all courses, unless you are autónomo (self-employed) and they are designed to help improve your business. If you’ve taken a course, it’s best to check with your gestor or accountant to see if the fees can be included on your declaration as there are slight variations between regions too.

Investments in environmental installations (some regions only)

Many regions in Spain allow you to deduct costs of investing in environmental installations such as solar panels, thermal installations, and water-saving devices. This category also includes improvements made to your habitual residence due to disability or adaptation because of technical or structural issues. Some of the main regions you can deduct these expenses include Valencia, Balearic Islands, Canary Islands, Murcia and Galicia. Unfortunately, these are not included for Madrid or Catalonia.

Domestic help (some regions only)

In some regions in Spain, you can even deduct expenses for domestic help, such as cleaners, nannies or au-pairs. This is true in Madrid, Andalusia, La Rioja and Castilla y León.

Electric cars (some regions only)

Those who make an investment in buying an electric car may also be able to deduct the cost of this, depending on where they live. This is true if you live in Valencia, La Rioja and Castilla y León.

Standout regional differences

  • The Canary Islands and Cantabria are the only two regions that allow you to deduct private health insurance and other health-related expenses, but make sure you contact your gestor to find out exactly which health costs can be claimed for.
  • Andalusia is the only region where you can deduct legal expenses.
  • Public transport costs can be deducted in Aragón and Asturias.

Please note, we at The Local are not financial experts. What we’ve learned, we’ve learned the hard way — by getting on the phone and listening to all those frustrating automated messages. 

The information above is designed to help, but if you are in doubt or unsure of exactly what you can claim back, seek professional advice.