Basing a business in overseas property
People planning on relocating to overseas property may face the dual problem of deciding where to live and also where to work.
However, in both rural and urban areas, there are ways of solving both problems at the same time.
Turning overseas property itself into a business is the ideal way to immerse yourself in foreign culture, while making the money necessary to survive.
For people buying overseas property in urban areas, starting a bed and breakfast or guest house could be the perfect way to entertain visitors from all over the world – including some Britons taking a holiday abroad.
Rural property abroad can also double as a business, particularly in wine-growing regions where vineyards offer a dual income from tourism and from the products of the vines themselves.
Running a Bed and Breakfast
A Bed and Breakfast typically offers fewer services than a fully fledged hotel, meaning it can be easier to run or possible to operate with fewer staff.
Without a lunchtime or evening menu, the kitchen can be much smaller and fewer different kinds of food need to be stored.
Meanwhile, the income is derived from the property itself, meaning the more rooms there are, the more money can be made.
Newcomers to the tourism industry might want to consider buying a property abroad that has the potential to be expanded, or that has rooms not yet converted to the necessary standard to accept guests.
That way, it should be possible to start small, allowing some paying guests to stay in the available rooms and provide the necessary funds to convert the remainder of the property.
However, the scale of a Bed and Breakfast is limited only by the size of overseas property that is available – with some magnificent castles among the holiday homes that are run on the continent.
As owners become more familiar with their surroundings, they may find the option of expanding by building or converting more rooms allows them to increase their income and become more involved in their local community at the same time.
Running a vineyard
Buying a vineyard abroad is one option for people who don’t want to face the hassle of establishing a business while also trying to establish themselves in a foreign country.
Existing vineyards bring the peace of mind of knowing that the land is suitable for the purpose, that local water supplies are sufficient to irrigate the crop – and, if the previous owner was making money, the confidence that the business should succeed.
However, it might prove more affordable to build up a new business from scratch, rather than to buy one with a reputation or brand already developed.
When starting a vineyard overseas, it is important to consider how the grapes themselves are likely to fare on a particular patch of land.
Soil conditions, water supply and weather all play a part in this – so a hillside facing the sun could present a different prospect than one in the shade.
Wine buffs are also likely to check which region a grape was grown in, so focusing on property in Bordeaux or Alsace might be wise when looking in France as, of course, could the Champagne region for anyone planning to produce sparkling wines.
Meanwhile, vineyard property in Italy’s Abruzzo or Lombardy regions could ensure a label with the desired heritage.
Is there a catch?
Just like any time that an individual chooses to go into business, there are issues to be aware of and expenses that could vary depending on the country chosen.
In May 2008, before the international economic turbulence began, Deloitte’s head of entrepreneurial business Tony Cohen told the Financial Mail that anyone setting up a business abroad should check local tax rates – including any indirect costs that they could face due to their activities.
"A restrictive capital allowance regime can negate the advantages of a lower corporate tax rate," he explained.
Jose Morillo, director of investment at the Spanish Embassy, told the publication that his own country had seen a steady increase in enquiries about setting up a business there, reaching 1,500 queries per year from overseas entrepreneurs.
Since that time, a number of economies in Western Europe have faced significant turbulence, leading to some governments facing sizeable budget deficits.
At such times, employment taxes often become an area of focus, meaning the regime in some countries may be changing rapidly in the aftermath of the global recession.
Mazars tax partner David Sayers said in 2008 that the social security burden for Western European employers can reach as high as half of their salary costs, with staff difficult to dismiss once employed – issues which may warrant further attention in the current economic climate.
Other businesses based in overseas property
Any kind of residential business can be based in overseas property, including professions outside of the tourist accommodation market.
Budding artists may want to head to the more cosmopolitan areas of the continent, for instance, for the chance to sell their wares directly from their homes.
A live-in gallery or boutique might seem like the ideal way to buy into a simpler life abroad, while more energetic entertainers could consider running a bar, pub or restaurant with its own attached living accommodation.