So, you’re thinking of moving to Spain? As well as finding somewhere to live, unless you’re already retired, most expats will also need to find a way to earn a living. It’s important think about this before you take the plunge and move, rather than after! In this you have two options: finding employment within an established business or registering as self-employed.
There are many pros and cons of self-employment in Spain, but the good news is that setting up as a freelancer (also known as an Autonomos) in Spain is much easier than you might think.
Here’s everything you need to know about becoming self-employed in Spain:
The Pros and Cons of Self Employment
Before you put in the time and expense of establishing yourself as an Autonomos in Spain, you need to think carefully about whether or not it’s the right decision for you. More than three million people are currently registered as self-employed in Spain, meaning that it is a very popular choice. And for good reason: being self-employed allows you to be your own boss, set your own working hours and your own schedule, and you can often take on as much or as little work as you want or need.
On the flip side, the cons of self-employment are that contracts can be unreliable, you might not be able to get as much work as you would like, and your monthly income is never guaranteed. You will also need to keep good records for tax purposes, and will need to allow time for chasing new invoices and doing the admin for the contracts you already have.
How to Become Self-Employed in Spain
Once you’ve decided that becoming self-employed is the right option for you, you’ll need to allow time to complete the process. Whilst this is relatively straight-forward, it is also time consuming.
If you have a Spanish residency permit or are a resident of an EU country then the process for establishing yourself as an Autonomos will be the same as if you were a Spanish national: if you are from a non-EU country then you may need to apply for a residency permit and a freelance visa to enter and work in the country. Regardless of your current residency status, anyone who wishes to become self employed in Spain will need a Foreigners Identity Number (NIE): You can apply for this by visiting the local police station and making an application with the foreigners department. You’ll need to complete the application form, show your passport, and pay the associated fee.
Setting Up Your Business
There are two different ways to establish yourself as a self-employed freelancer when you move to Spain, and the right option for you will depend on the size of your business and the kind of work you plan to undertake. You can establish yourself as either:
- a sole proprietor or self-employed person (autonomo). If you choose this option then you would have to accept personal liability for your business. The cons are that if a client or customer chose to take legal action against your company it would impact you directly. The pros are that it’s quick and easy to set up as an autonomo in Spain, your social security contributions would be covered, and paying your taxes is easy through the personal tax system.
- a limited company. There are different options for this but the most common form of which is the sociedad limitada or SL. The main pro of opting for a limited company is that there is no personal liability with an SL but you would have additional tax, accounting and other responsibilities.
Registering as Self Employed
Finally, but most importantly, you have to register your business and ensure that you are registered to pay your taxes. To do so, you will need to file the Impuesto sobre actividades económicas (tax for economic activities) with one of the tax authority’s offices. You will need to take your passport and your NIE number in order to complete this application.
For tax purposes, in order to complete this application, you must be either a sole trader (empresario individual) or independent professional (profesional autonomo). You will then be asked to complete another form: the Modelo 036 or 037, which is known as the declaración censal and it is at this point that you will be given a personal tax certificate (Impuesto sobre la Renta de las Personas Físicas or IRPF) which you will need to correctly pay your taxes.