9 Reasons why many foreign-owned businesses fail in Mallorca

During the 18 years of running abcMallorca I’ve seen a lot of new businesses come and go. I’ve observed many newcomers arriving in spring full of excitement and dreams to start a new business venture on the island only to see that many are history by autumn.

As a foreigner in Mallorca, running a business is not for the faint-hearted. Entrepreneurship is risky regardless of the location but let’s think about it, without local knowledge, local contacts, and speaking the local language it’s very clear that the odds are greatly stacked against you succeeding.

Of course, there are many reasons why small businesses fail – inexperience in business and management, insufficient capital, lack of knowledge of the market, ineffective business and marketing planning, etc., these are common factors the world over. However, there are specific factors why businesses fail on Mallorca that you as a business entrepreneur moving to the island need to be aware of, so you can avoid getting tripped-up.

Here, I’ve put together the most common mistakes new foreign business owners to Mallorca make, so that perhaps you can save yourself from being another statistic.

Please hear me when I say, Mallorca is a difficult market to crack, so don’t underestimate what is required to be successful here. Take all the help and advice you can get to be successful!

Find out below my top 9 reasons why so many foreign-owned businesses in Mallorca don’t last a year.


If you are new to Mallorca you’ll need to invest the time into researching how business works on the island. It is really important that you understand the market segments, the level of market activity, seasonal impact, infrastructure, resources available, cultural influences, labour laws, taxes and, more specifically, how things are run for your particular business sector. If you don’t invest the right amount of time in researching, you are at a disadvantage before you’ve even started your business in Mallorca. I can’t stress enough how important it is to speak to the local market and make connections with other business owners – only by doing so, will you really get a clear insight into what starting a business here entails.


When new business people first step foot in Mallorca they often become intoxicated with the beautiful environment, the sunny weather, the carefree lifestyle and the easy-going business culture. What tends to happen is that their dream life in a sunnier climate carries them off into the clouds, which in turn affects how they run their business. The Spanish culture is infamous for being relaxed but there is a big difference between running a business in Mallorca and kicking your feet up on holiday. Unfortunately, the line here tends to get blurred, so the focus shifts. It’s very easy to get distracted by the beautiful lifestyle in Mallorca, so all rationality about running a business goes out the window. When this happens, the business is unfortunately doomed before it even begins.


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