Are you wondering how to start a small business in Spain? You've come to the right place.
In Spain, there are two ways to set up an independent trade:
- Autónomo Profesional, if you want to work as a freelancer
- Autónomo Empresarial, if you want to work as a sole trader in trading or commercial business
If you want to open a limited company and separate your personal and business assets, you need to register Sociedad Limitada.
Disclaimer: This article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
General Requirements to register as an independent contractor in Spain
Can I work in Spain as a freelancer or a self-employed person?
Any national from the European Union, the European Economic Area, or Switzerland can come to Spain and set up as a freelancer or self-employed without restriction. Any national outside this framework may need a visa to come and work in Spain.
Before starting any activity in Spain, you must deliver a residence permit and work permit, which will allow you to stay and work in the country.
Spain has a designated self-employment permit that allows you to live and work as a freelancer or self-employed person.
What are the requirements for the self-employed work permit in Spain?
As we already mentioned, if you are an EU, EEA, or Swiss citizen, you don't need to obtain a working permit. If you aren't a part of the group mentioned above, you will need to apply to get a work permit.
To apply, you will need a copy of your passport, criminal records, and the application Form EX-07. You will have to prove the legitimacy of your business idea by providing a business plan, for example. Additionally, proof of professional qualifications (copy of your diplomas, for instance) and sufficient funds are needed.
Where to apply for a work permit in Spain?
Applying for a work permit happens in your home country, through a local Spanish consulate. We suggest contacting them to gather information about the process as it may differ from country to country. Keep in mind that it can take up to three months to get an answer once you apply.
How long does the Spanish work permit last?
The work permit in Spain lasts one year. However, it can be renewed if the continuity of the economic activity is proven.
Responsibilities and financial liability of autonomo
As an autonomo profesional or autonomo empresarial, you will be personally liable for your business, including your business debts. That means that in the case of debts, your personal assets can be claimed by creditors.
If you want to separate your personal and business assets, you will beed to register sociedad limitada, or a limited company.
Becoming an autónomo
Registering with the Spanish Tax Authority as autonomo
Registering with the Spanish Tax Authority (Agencia Tributaria) is the fist step of becoming an autonomo.
To register with the tax authority, you will need your NIE (Número de Identificación de Extranjero) and your passport. The NIE number is a unique tax identification number and is used for all fiscal and financial transactions. Bear in mind that the NIE is mandatory for all foreigners — non-spanish citizens working or having any financial or professional affairs on the Spanish territory.
You can apply for NIE at the Spanish embassy in your home country, or in Spain at the Spanish National Police station. To apply, you will need the NIE EX 15 application form, your passport, and two small ID photos.
In the same time, register to pay the Impuesto sobre actividades económicas (tax for economic activities) with one of the tax authority’s offices. The tax authority shall give you a tax certificate called Impuesto sobre la Renta de las Personas Físicas (IRPF).
Registering for the Spanish Social Security as autonomo
Once registered with the tax authorities, the second step is to register at the Spanish Social Security System (Tesoreria General de la Seguridad Social).
You have 30 days after registering with the tax authorities to register with the Spanish social security authority. There is a specific regime for the autonomo persons: the Regimen Especial de Trabajadores Autónomos, RETA. The contributions for the self-employed persons (RETA) has to be paid every month by the autonomo.
To register, you need a passport copy and you NIE.
Tax and VAT obligations for autonomos
Both autonomo profesionales and autonomos empresarial need to pay Impuesto sobre la Renta de Personas Físicas (IRPF), which is the personal income tax. If the autonomo is liable for VAT in Spain (IVA in Spanish), it will be necessary to file VAT returns on a quarterly and yearly basis. The standard VAT rate is 20%.
If you are dealing with business customers that are not residing in Spain but within the European Union, know that you can be exempt from paying VAT on goods and services.