How to register as self-employed in Spain

Spain offers an excellent environment for entrepreneurs to start a business and become self-employed. Whether you're a European Union citizen (EU Citizen)or a non-European Union citizen (non-EU Citizen), there are some essential steps to follow to become self-employed in the country. When you decide to venture on this pathway you will undoubtedly hear the term autónomo. In Spanish, autónomo refers to a self-employed individual. A person registered as an autónomo is essentially an independent worker, managing their own business and operating without dependency on an employer. The term is also used in Spain to describe the legal and tax status of self-employed workers.

In this article, we will cover the steps, documents needed, costs, tax implications, and advice for first-time autónomos in Spain.

1. Becoming Self-Employed

For EU citizens the process of becoming self-employed in Spain is relatively straightforward and fast. For a non-EU citizen, the process is a little more demanding as there is an additional step to go through as you will need a work visa. Here are the necessary steps to follow in order to register as an 'autónomo' in Spain:

Step 1: Obtain a Visa if you are a non-EU citizen (If you are an EU citizen go to step 2)

The first step for non-EU citizens is to apply for a visa. To work as a self-employed person in Spain you specifically need to apply for a self-employment visa at the Spanish embassy or consulate in your home country before arriving. In order to get this you will need to provide:

1. A completed visa application form EX-07
2. A valid passport
3. A detailed business plan
4. Proof of sufficient financial means or investment funds
5. A clean criminal record
6. Proof of health insurance
7. Payment of the required visa fee

Step 2: Obtain your NIE (Número de Identificación de Extranjero)

The NIE is a foreigner's identification number and is a requirement for all residents of Spain, including EU citizens. Once you have been given this number it will never change. It will become your official ID number for all practical purposes in Spain. To get your NIE, you will need to:

1. Fill out the application form (EX-15)
2. Provide a copy of your passport or national ID card
3. Provide a document that justifies your reason for applying for an NIE (economic, professional, or social reasons)
4. Visit a local police station or immigration office to submit your application
5. Pay the required fee

If you would like more detailed information, please read our article on how to get your NIE.

Step 3: Register with the Spanish Social Security System (Tesorería General de la Seguridad Social)

Now that you have your NIE, you must register with the Spanish Social Security System. This is necessary in order to pay your Social Security contributions for self-employment:

1. Visit your local Seguridad Social office with your NIE and a completed TA_0521 form.
2. Provide proof of your identity and address.
3. Pay the required fee.

Step 4: Register as a Self-Employed Person (Autónomo) at the Tax Office (Hacienda)

Once you're registered with the Social Security System, you will need to register as an autónomo with the Spanish Tax Office in order to present your income declarations:

1. Fill out form 037 (in person) or 036 (online)
2. Along with the form, provide a copy of your NIE, your Social Security registration, and proof of identity
3. Visit the local Tax Office to submit your application

2. When do I need to register as self-employed?

If you think that certain forms of income, such as selling goods on platforms like Etsy or Amazon exempt you from having to register as self-employed, you would be wrong. In fact, even if you are generating very little income from your sideline business, you still need to register. Regardless of the services you offer - be it online work, English tuition or part-time services, you are obliged to register as an autónomo. In Spain, this leads to an obligation to pay self-employed social security fees each month whether you generate income or not. While it might seem imposing, unfortunately, it is how the system operates in Spain.

3. Cost of Being Self-Employed

Now that know you need to pay each month, just how much do you need to pay and what exactly?

1. Social Security contributions: As a self-employed individual, you'll pay monthly contributions to the Social Security system based on your income. This new system was introduced in 2023 which ties your fee to your real income. The fee for social security, or monthly cuota as they refer to it in Spain, ranges from €230 per month to €500 per month. However, there are significant discounts available for new autónomos, particularly during their first year of operation. You are eligible for a flat rate (tarifa plana) of €80 per month for the first 12 months. In the following 12 months, you will be able to continue paying the €80 monthly fee as long as your net income is below the Minimum Interprofessional Wage (SMI). Once the €80 flat-rate period has elapsed, you will join the new tiered contribution system based on your actual income.
2. Taxes: You'll be required to file quarterly tax returns and make payments on your net income. This will include paying Value Added Tax (VAT), if applicable.
3. Professional fees: Depending on your sector, you may incur fees for joining professional associations or obtaining permits.

4. Tax Implications and Declarations

Naturally, as a self-employed person in Spain, you're responsible for declaring your income and paying taxes. No matter how little income you generate everyone is automatically VAT registered, unlike countries such as the UK which offer a VAT threshold. Value Added Tax in Spain is referred to as IVA. These are the three main obligations:

1. Income tax (IRPF): You will pay income tax on your net earnings, with progressive rates ranging from 19% to 45%.
2. VAT (IVA): You may be required to charge VAT on goods or services sold, with standard rates set at 21%. You will need to file quarterly VAT returns. You will also be able to claim back VAT on business-related expenses.
3. Quarterly tax returns: Self-employed individuals must submit quarterly tax returns to report their income and expenses. This involves paying income tax and VAT as required.

For more information please read our article on taxation for self-employed workers in Spain.

5. Hiring a Gestor in Spain

A Gestor Administrativo or simply a Gestor in Spain refers to a highly-trained and certified professional who specialises in handling bureaucratic matters. If you're not fluent in Spanish or not familiar with Spain's administrative procedures, hiring a Gestor can be much more practical. While hiring a Gestor involves an added cost, the potentially costly mistakes they can save you often make their services a wise investment.

Benefits of Hiring a Gestor

When you're self-employed, dealing with the administrative tasks of your business can be complex and time-consuming. Here are several reasons why you might want to consider hiring a Gestor:

1. Navigating Bureaucracy: A Gestor is knowledgeable about the Spanish administrative system, helping you navigate complex bureaucratic procedures. They can assist with tax returns, social security payments, obtaining permits, and more.
2. Language and Cultural Understanding: If you're not a native Spanish speaker, having a professional who understands the language and culture can greatly ease communication with government offices and other entities.
3. Saves Time and Effort: Hiring a Gestor allows you to focus on your business, leaving bureaucratic procedures in their capable hands. This can be especially useful during your set-up phase.

Finding a Gestor

Finding a reputable Gestor requires some research and due diligence. Here are a few points to consider:

1. Personal Recommendations: Personal recommendations from other self-employed individuals or expats in Spain can be the best way to find a reliable Gestor.
2. Online Research: Look at reviews and ratings online. There are also many online services which can be significantly cheaper, starting from about €20 per month. Type Gestoria Autonomos Online in a Google search for multiple options.

6. Advice for First-Time Self-Employed in Spain

1. Plan ahead: Research industry-specific requirements and prepare a thorough business plan to facilitate visa applications and other procedures.
2. Seek professional advice: Consulting a local adviser or accountant can provide valuable guidance on tax laws and business management.
3. Stay organised: Keep detailed records of all financial transactions and deadlines to stay on top of your taxes and avoid fines.
4. Network: Join local professional associations, co-working spaces, and online forums to connect with other entrepreneurs and potential clients.
5. Be patient: The process of becoming self-employed in Spain may be time-consuming, so be prepared for potential obstacles and delays.

By following this guide, you will be on your way to becoming self-employed in Spain, whether you're an EU or a non-EU citizen. Now that you're on your journey towards self-employment in Spain, it's time to find the perfect place to live. Spain is home to numerous popular cities for digital nomads, offering a blend of fascinating cultures, vibrant workspaces, and fantastic lifestyle options. Explore popular cities such as Barcelona, Valencia, Madrid, Malaga, and Alicante and immerse yourself in the culture of Spain as you kickstart your entrepreneurial journey.