Due to the fact that Spanish economy has been through some ups-and-downs in the past decade, the country is rarely considered a top destination for career advancement. In reality though, it is one of the best contracting destinations in Europe. Many freelancers are drawn to Spain by thriving automotive, chemistry, constructions, ITC and logistics industries. Both, local and international companies provide generous opportunities in the largest cities across the country: Barcelona, Madrid, Bilbao, Valencia and Zaragoza.
What are the benefits of working in Spain?
Spain has a lot more to offer than the obvious: good weather, rich culture and delicious food. One of the main country’s USPs is low cost of living. While other European countries might offer slightly higher payment rates, they definitely loose in property, land, food and travel costs.
In addition to this, Spain’s retention rates on income are almost unbeatable. For example, at Bradford Jacobs we offer 60%-70% retention rates on our self-employed solution in Spain. In the meantime, in some European countries you lose about 40%-55% of your income.
Also, Spain is rife with interesting projects. Many businesses are on the lookout for engineers, IT professionals, project managers and financial services specialists.
Furthermore, it is considered to be a safe country with some of the lowest crime rates in the world.
Do I have the right to work in Spain?
All EU ad EEA Nationals have an unfettered right to work in Spain without the need to hold a visa or a work permit. However, if you are planning to stay more than 3 months, you must register with the Central Registry for Foreigners at a local Police station.
Other nationals need to have the relevant approval to work prior to their arrival in Spain and cannot work pending the approval being issued by the relevant authorities.
Moreover, one must bear in mind that very few locally based firms are eager to hire contractors without any local language knowledge. Basic Spanish language skills are a common requirement.
Do I need to register with NIE?
All freelancers wishing to start a business in Spain need to obtain a foreigner’s identity number (NIE). An NIE is the foreign equivalent of the national identity number that local residents have. It is a unique reference that will identify you when you are doing business and for any formal/legal procedures, from opening a bank account to purchasing property.
Do I need to register with the Social Security office?
Anyone working in Spain, whether employed or self-employed, and earning more than the annual Spanish minimum wage, is eligible to pay social security contributions INSS. You should enrol with the General Social Security Fund as soon as your employment starts. The Social Security provides cover for:
- Non-work related injuries
- Maternity/paternity leave
- Work-related injuries
- Wage guarantee fund
- Occupational training
The rate payable depends on the contract type, but typically an employee pays around 6.35% with the employer paying approximately 29.9%.
National Income tax
All individuals who spend more than 183 days in a calendar year in Spain automatically become tax residents and are entitled to pay taxes. Spain’s tax rates in 2019 are as follows:
- Up to €12,450: 19%
- €12,450–20,200: 24%
- €20,200–35,200: 30%
- €35,200–60,000: 37%
- More than €60,000: 45%
Are you planning to work in Spain? Get in touch now to find out how to stay compliant and get the most of out of your employment.