Residencias, Work Permits & Business

Your statutory obligations for living or working in Tenerife as a foreigner are, whether you are a EEC subject or not, simple, specific and very fair.

• Tenerife is not Spain. Remember this. Although the Canary Islands are Spanish Sovereignty, they are fairly autonomous, with their own government and political system. Though many of the rules are common to Spain, there are many exceptions and differences. You may have to follow particular procedure in Tenerife that might not be required in Spain.
  
  
• Residencias & Work Permits. You cannot Live or Work in Tenerife without a Residencia/Work Permit. Many people are given the impression that an NIE Number or Contract of Work is sufficient to make them ‘legal’. This is absolutely incorrect. Obtaining a 'Residencia' or 'Permit to Work' takes a little time, but is perfectly straightforward.
  
  
• There are 3 basic type of Residential/Working Status - Choose sensibly.
  
  
  
  • Residencia Only
    The Canarian Authorities allow you apply for a Residencia to live here. Your application must include evidence of (i) Income or Pension from abroad on a regular basis, by means of a letter from your Tenerife Bankers, and (ii) Documents for Private Medical Insurance or your other arrangements for health cover. Initially, Residencias are usually issued for a validity of between 3 and 5 years.
    
    
  • Residencia/Work Permit as an EMPLOYEE (Cuenta Ajena)
    Your application must include a copy of your contract of work from your employer. Normally, the residencia will be valid for the same period specified in the Contract, up to a maximum of five years. When your residencia expires, there is no provision to ‘extend’ the residencia. You must re-apply in full for a new residencia, repeating the whole procedure. A long term Contract will help in avoiding this.
    
    
  • Residencia & Work Permit SELF-EMPLOYED (Cuenta Propia)
    This is the status you require to run your own business. Your Social Security payments will be about 30,000 ptas per month and this will entitle you to full National Health Medical Cover. ). Note that most activities will require you to have a proper business address at a commercial unit (called a local). Some activities can be operated from your home address, but not many. You must also buy the appropriate annual licence that covers your particular activity (i.e., Bar, Mechanic, Shopkeeper). Your accountant will then submit your accounts every 3 months, with a further annual submission. Your principal monthly operating costs will be - Social Security + Accountants Monthly fees + Local/Unit Rent (about 40,000 ptas + Local rent)
  
  
  
• Limited Companies. Think very carefully before forming a limited company unless you expect your turnover to easily exceed 20 million pesetas in it’s first year. Unless you particularly need a company, most business and tax requirements are better met on a Sole Proprietor or Partnership basis. Partnerships can be simply and reliably arranged by a Notorised private agreement
  

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