What is a 'traspaso' in Spain? How business transfers work when taking over a commercial property

Many international expats dream of running a café, bar, or boutique in Spain. If you are looking to invest in the Spanish commercial sector, you will quickly encounter the term traspaso.

A traspaso is the transfer of a leasehold business. You do not purchase the commercial property (the physical bricks and mortar, known as the freehold); instead, you buy the right to take over the existing business operations, its assets, and the premises' lease contract.

Understanding the legal aspects and financial mechanics of a traspaso is critical to ensure you are buying profitable operations rather than inheriting someone else's hidden debts. Buying a business in Spain requires a different approach compared to the UK or North America, as it is heavily reliant on local municipal compliance.

What is a 'traspaso' and how is it different from starting from scratch?

When you buy a business as a traspaso, you acquire an operational entity, but you do not own the real estate. If you were to purchase the freehold, you would own the property outright. Conversely, starting from scratch would mean renting or buying an empty property, applying for every municipal license from zero, and building a brand without a safety net.

What is typically included in a traspaso?

When you negotiate the price for a traspaso, you are paying a premium for speed and existing infrastructure. A standard transfer typically includes:

• Fixed assets: Commercial machinery, furniture, fixtures, fittings, and existing stock.
• Intangible assets: The business name, brand reputation, online presence, and established customer base.
• Operational rights: Existing licences (such as the licencia de apertura or opening licence) and permits required to trade.
• The lease: The right to occupy the premises under an existing or newly negotiated agreement.

Starting from scratch vs. traspaso: which is better?

Deciding whether to open an empty commercial property or take over an existing business depends on your budget, timeline, and risk tolerance.

Advantages of a traspaso

The primary advantage is operational speed. Dealing with the Spanish government and local administrative areas to secure a new opening licence can take months or even years, especially for hospitality venues requiring soundproofing, fume extraction, and terrace permits. A traspaso allows you to invest efficiently, bypassing this bureaucratic bottleneck and generating revenue from day one.

How a traspaso works in practice: The lease negotiation

Under Spanish letting law (specifically the Ley de Arrendamientos Urbanos or LAU), a tenant running a commercial business has the right to transfer their lease to a third party without needing the landlord's explicit consent, provided they notify the landlord within one month.

However, in practice, bypassing the landlord is highly ill-advised. The law entitles the landlord to increase the rent by 20% upon a business transfer. Furthermore, the remaining duration of the lease might be too short to recoup your money. Most buyers will sit down with the outgoing tenant and the landlord to negotiate a brand-new lease contract or secure a lease option that guarantees a minimum 5 to 10-year term. Securing the property for a long enough period is vital for the long-term viability of the business.

Required documentation and due diligence

Before you transfer any funds, rigorous due diligence is essential. Never sign a traspaso agreement or buy without independent legal representation. Your lawyer or gestor (a Spanish administrative specialist) should review:

• Proof of ownership: Verifying the seller actually owns the equipment and has the legal right to execute the purchase.
• Licences and compliance: Checking with the local town hall (ayuntamiento) that the opening licence is valid, unrevoked, and matches the business activity exactly.
• Registration certificate: You must check the municipal registration certificate to ensure all safety, health, and fire compliance metrics are up to date. An outdated registration certificate can result in immediate closure by inspectors.
• Corporate standing: Checking the commercial register (Registro Mercantil) if the business is operated by a Spanish limited company (SL) to confirm there are no embargoes or outstanding legal disputes.

Staff transfers and subrogation

If you purchase an ongoing business, Spanish employment law (Article 44 of the Workers' Statute) mandates that existing employment contracts automatically transfer to the new owner. You inherit their seniority, salaries, and severance rights. You cannot simply fire inherited staff without paying standard Spanish redundancy terms (finiquito). Always factor potential redundancy liabilities into the final purchase price.

Taxes applicable to a business transfer in Spain

The tax treatment of a transfer is highly specific and often misunderstood by foreign buyers.

VAT (IVA) and Transfer Tax (ITP)

If you are acquiring the business in its entirety—meaning it is transferred as a functional economic unit capable of operating independently—the purchase price is exempt from both VAT and Transfer Tax.

However, exceptions apply:

• If you are only buying the physical assets (e.g., just the kitchen equipment) and not taking over the business itself, standard VAT (21%) applies.
• Vehicles included in the transfer are usually subject to Transfer Tax (ITP) at the regional rate.
• If the landlord receives a percentage of the traspaso fee (which is common in older lease agreements), that specific portion is subject to VAT.

Protecting against inherited debt

In Spain, debts follow the business. If the previous owner owes money, the authorities can pursue the new owner and even place a lien on the property operations. It is critical that your legal team obtains certificates of zero debt from:

• The tax office (Hacienda).
• The social security office (Seguridad Social), particularly if you are taking on existing employees.
• Suppliers and utility companies.

By conducting thorough checks and understanding the mechanics of a leasehold business transfer, a traspaso can provide a highly efficient, low-friction entry into the Spanish commercial market. Ready to start your search? Browse thousands of commercial properties and established businesses for transfer across the country on thinkSPAIN.com, and take the first step toward your new venture today.