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December 22, 2020

Q: How do I Register as Self-Employed (Autónomo) in Spain?

Learn how to register as self-employed (autónomo) in Spain and the different types of self-employment registration options.

Ask Liquid: How do I Register as Self Employed (Autonomo) in Spain?

Compliance Ask Liquid Finance and Accounting Freelancer Tips International Payments

Moving to Spain, working for yourself, setting your own hours…sounds like a dream, doesn’t it? Thankfully, it’s not that hard to make that a reality. Becoming a self-employed freelancer (autónomo) in Spain is a fairly easy process that we’ll break down for you here. Just follow these steps and keep our advice in mind, and you’ll be ready to take the plunge. However, the information here should not be used in place of legal or financial counsel.

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Self-Employment in Spain

If you want to be self-employed, you need to register. However, usually, if you make less than minimum wage per year, you don’t need to register as self-employed (but this is not a cut and dry rule, so check what you qualify for).  

There are a few types of independent work classifications in Spain:

  • Autónomo Profesional: if you want to freelance
  • Autónomo Empresarial: if you want to do sole trading or commercial business trading 
  • Sociedad Limitada: if you want a limited company with separate personal and business assets

Here, we will focus on the autonomo class. If you are from the EU/EEA or Switzerland, you can set up as an autónomo with no restrictions, but if not, you may need a visa, residence permit, and work permit. Applying for work permits should be done in your home country via your Spanish consulate. You should contact them before making your decisions, and remember that it can take up to three months to receive a reply.

Registering as Autónomo

Before registering your self-employment with the Registro Mercantile Central RMC you will have to register with the Spanish tax authority (Agencia Tributaria, aka Hacienda) and the Spanish social security system (Tesoreria General de la Seguridad Social). 

It is critical to register with the tax authorities before you begin any business activities. Once you begin business operations, you must notify the tax office on your first day of activity, or else you may have to pay fines.

When you register with the Spanish Tax Authority, you will need a few things:

For tax purposes, you must be one of two things: a sole trader (empresario individual) or an independent professional (profesional autonomo). The Spanish authorities will want you to categorize yourself depending on the type of work you want to do, with the different categories having their own distinct code number. They will ask you to complete Modelo 036 or 037 (declaración censal), and you will be given a personal tax certificate (IRPF).

The Next Steps: Social Security and Healthcare

You have 30 days after registering with the tax authorities to inform the Spanish social security office that you have become self-employed autónomo. It is mandatory for all autónomos to register with the Spanish social security system under the Special Regime for Autonomous Workers (Régimen Especial de Trabajadores Autónomos or RETA).

As a self-employed autónomo worker, the way to get free healthcare is to join a health insurance fund (mutua) that is organized through RETA. This way, you are granted a health card during the month of joining. Coverage can include you as well as dependent family members residing at your address. 

Tax and VAT Obligations for Autónomos

All forms of autónomos need to pay personal income tax known as Impuesto sobre la Renta de Personas Físicas (IRPF).  If the autónomo is liable for VAT (IVA in Spanish), it is important to file either quarterly or yearly VAT returns. In Spain, the standard VAT rate is 20%.

If your autónomo business is dealing with customers that are outside of Spain but still within the EU, you can be free from paying VAT on goods and services. If you are dealing with customers residing outside of the EU, it is standard not to charge VAT. Spain complies with the EU VAT directives, meaning that it is standard for VAT to be added on to the prices of goods/services on your invoice. Your specific VAT ID number must be put on all invoices that go to customers, in addition to the amount of VAT charged and all standard items. See here for details on Spanish invoice requirements.

Records, Accounting, and Advice for Autónomo

Since you are categorized as an individual when registered as autónomo, you will not be required to keep records that include a balance sheet for your business (although you still can if it is efficient). Your obligations just include keeping records of all sales and business expenses in the way that meets the Spanish standards. 

In certain cases, your corporate clients might be required to withhold some of your fees, which will subsequently be paid as income tax to the tax office for you. The standard rate for withholding tax for sole traders is 15%, but during the first two years of business, you can opt for 7% retention if you like. This is good to know if, for example, you are running a start-up and have a lot of initial costs – this option can then increase the available flow of cash and help you launch.  

If you are self-employed and want to hire another self-employed person, you will have to fill out an extra form every trimester. The form is “Modelo 111” and can be filled out online. You should also provide a contract to make sure that both self-employed persons comply with Spanish work laws. 

¡Vámonos! Become an Autónomo Today

Those are the basics of becoming self-employed (autónomo) in Spain! Whether you want to be a freelance software developer or a self-employed food critic, the information here will help you succeed. As a self-employed worker in Spain, you will fit right into Spanish daily life – making your own hours and enjoying your siestas. You won’t be a fish out of water!

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Category: Compliance Ask Liquid Finance and Accounting Freelancer Tips International Payments

Updated: December 22, 2020

Quick note: This is not to be taken as tax advice or legal advice or payroll advice. Since tax rules and laws change over time and can vary by location and industry, consult a CPA / tax advisor and/or attorney for specific guidance.

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