Transferring a business in a rented premises can be an excellent opportunity, whether you’re an owner looking to hand it over to good management or an entrepreneur wanting to start with an already established base.

But beware: it’s not as simple as handing over the keys and signing a contract. There are legal, tax, and practical implications that you should fully understand before taking the plunge.

In this complete guide, we’ll explain everything you need to know to transfer a business in a rented premises safely, profitably, and without unpleasant surprises.

What Does It Mean to Transfer a Business, and When Is It Worth Doing?

When we talk about transferring a business, we mean handing over the operation of an ongoing commercial activity to another person. In other words, the new owner takes over the business “as is,” including its clientele, licenses, furnishings, and even staff, if agreed upon.

A transfer usually happens when:

• The current owner wants to retire or change activities.

• The business is running well, but the owner can no longer manage it.

• Someone wants to acquire an operating business and avoid the costs of starting from scratch.

In short, transferring a business can be a win-win: one party receives financial compensation, and the other starts with a solid foundation and existing customers from day one.

Differences Between Transfer, Assignment, and Sale of a Business

Although these terms are sometimes used interchangeably, transferring, assigning, and selling a business are not the same thing.

• Transfer: the tenant passes on their position in the lease contract to a third party along with the business.

• Assignment: only the lease contract is transferred, without the business itself.

• Sale: involves selling all the assets (furniture, equipment, stock, etc.) but not necessarily the right to use the premises.

Understanding these differences is crucial to avoid legal or tax confusion later on.

Key Legal Aspects When Transferring a Rented Premises

Rights and Obligations of the Tenant and the Landlord

In a business transfer involving a rental property, the tenant (the one transferring) retains acquired rights under the lease but must also respect its obligations.

For example, they must ensure that there are no clauses prohibiting the transfer and that the landlord is properly informed.

The landlord, on the other hand, may have the right to receive a portion of the transfer amount if stipulated in the contract, or to object if there are legally justified reasons.

Landlord Authorization: When Is It Required?

In many cases, the landlord’s consent is not required for a transfer, as long as the business continues to operate and the new tenant assumes the existing lease terms.

However, some contracts include specific clauses requiring prior authorization or granting the landlord a financial share in the transaction.

Duration of the Lease and the Effects of the Transfer

When a business is transferred, the new tenant assumes the rights and obligations of the previous one.

That means the lease duration, rent, and conditions remain the same unless otherwise agreed.

Even so, it’s advisable to renegotiate certain terms to prevent future disputes.

How to Calculate the Value of a Business Transfer

Factors That Influence the Price (Licenses, Clients, Location, etc.)

Valuing a business transfer is one of the trickiest parts. It’s not just about looking at sales or furniture, it’s about understanding the true overall value.

Key factors include:

• Location: high-traffic or tourist areas are worth more.

• Business age and reputation.

• Licenses and permits (especially in hospitality).

• Customer and supplier portfolio.

• Equipment and condition of the premises.

A good tip: think of the transfer as the sale of a “continuity package,” not a collection of isolated assets.

Common Mistakes in Business Valuation

Many people overestimate the value of the clientele or ignore existing debts. Others set the price without considering the remaining lease duration, which can heavily impact the value.

Our recommendation: rely on a specialized consultant or professional appraiser to determine a fair and appealing price.

Steps to Properly Transfer a Business in a Rented Premises

Review the Lease Contract

Before anything else, examine your current lease carefully. Look for clauses about transfers, assignments, or subleases.

If in doubt, have a lawyer review it with you. Better safe than renegotiating under pressure.

Negotiate Conditions with the Landlord

Even if their consent isn’t always required, talking with the landlord is key. Maintaining a good relationship makes the process smoother and prevents future issues.

Also, if the contract is old, this may be a good time to update the rent or other terms.

Draft and Formalize the Transfer Agreement

This document should clearly state:

• What exactly is being transferred (business, license, furnishings, etc.).

• The agreed price.

• Tax and labor responsibilities.

• The handover date and the condition of the premises.

And of course, signing before a notary or with witnesses is always recommended.

Notify Suppliers and Authorities of the Change

Once the transfer is complete, don’t forget to notify:

• The Tax Agency and Social Security.

• The City Council (licenses).

• Main suppliers and key clients.

A simple oversight here can cause unnecessary paperwork later.

Taxes and Costs Associated with the Transfer

Taxes You May Have to Pay (VAT, Income Tax, Transfer Tax, etc.)

Generally, the transfer of a business is not subject to VAT if it includes a set of elements that allow the business to continue operating (i.e., an economic unit).

However, it may be subject to Transfer Tax (ITP) or Income Tax (IRPF) if the transferor makes a profit. It’s best to consult a tax advisor for each specific case.

How to Correctly Report the Transaction

The transferor must declare the profit as capital income or capital gain, while the new owner may deduct part of the amount if recorded as a depreciable expense.

In both cases, the documentation must be accurate and consistent with the transaction.

Tips for Negotiating a Profitable and Risk-Free Transfer

If You Are the Transferor

• Don’t hide relevant information, transparency prevents conflicts.

• Calculate your taxes before closing the deal.

• Make sure the new owner meets all legal requirements to continue the business activity.

If You Are the New Tenant or Buyer

• Check all licenses and permits.

• Inspect the premises and facilities.

• Negotiate a transition period with the previous owner to learn how the business operates.

A good transfer isn’t an escape, it’s a carefully managed transition.

Real-Life Examples of Transfers of Rented Premises

Success Stories in Hospitality, Retail, and Services

In the hospitality sector, for example, the transfer of bars or cafés in tourist areas has allowed many entrepreneurs to start successfully.

We also see examples in hair salons, neighborhood shops, and beauty centers, where keeping the previous owner’s clientele has been key.

Lessons from Failed Transfers

On the other hand, failed cases often result from incorrect valuations or poor communication between the landlord and new tenant.

Others underestimate startup costs or tax obligations, and of course, initial enthusiasm doesn’t make up for poor planning.

Conclusion: How to Ensure the Transfer Is a Good Deal

Transferring a business in a rented premises can be a great opportunity if done wisely, transparently, and with professional advice.

The key is to know your rights and obligations, negotiate clearly, and properly assess both the business and the lease agreement.

If you’re considering taking this step, whether as the transferor or the buyer, we recommend visiting Business in Spain. There you’ll find professional advice, real opportunities, and personalized support to make your transfer a complete success.

Because in the end, that’s what it’s all about: the business may change hands, yes, but both parties should come out winning.