Are you thinking of relocating to Spain and starting work as a freelancer? In this guide, we lay out all the benefits of being self-employed in Spain compared to other countries—what the self-employed quota is, what taxes you are liable for, and lots of other information to consider before embarking on your adventure. Read on to find out how you can become self-employed in Spain as a foreigner.
The pros of being self-employed in Spain
Like just about anything, there are pros and cons to freelancing. But being self-employed in Spain comes with its own special set of benefits. When you start paying social security in Spain, you'll qualify for the following:
- Health care through the National Health System
- Insurance coverage in case you’re injured on the job
- Unemployment benefits for up to 2 years (24 months) if you have to stop working because of a drop in revenue of at least 10%, greater losses, insolvency, or various other reasons
- Parental leave, sick leave, or leave due to a work accident
- Sick leave for common illnesses that aren’t work related
- If your income stream temporarily runs dry, you can freeze your self-employed status to avoid having to pay social security charges
- The invoicing and accounting process is fairly straightforward. You can do it yourself or outsource the service and let someone else do it for you. The price of these services varies depending on your turnover, but you can expect to pay between €50 and €100 per month.
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Self-employed quota in Spain
First of all, what’s the self-employed quota? It’s a monthly contribution that self-employed workers have to pay into the social security system. It's called a quota because it's a fixed amount that you pay each month. With this contribution, you can enjoy the benefits mentioned above, such as public health insurance, unemployment cover, sick leave, and more. Everyone who registers under the Special Regime for Self-Employed Workers (RETA) is required to pay this quota.
How much is the self-employed quota?
The self-employed quota isn’t defined by how much money you’re earning. Instead, you’re free to decide yourself whether you’d rather pay the minimum or the maximum amount. However, this choice is only available to freelancers age 47 and under. If you're 48 or older, you’ll have to pay the higher contribution.
- Minimum quota for self-employed workers in Spain (47 or under): €286.15 per month
- Maximum quota for self-employed workers in Spain (47 or over): €1,221.03 per month
Fixed rate for self-employed workers
The first year of being self-employed, freelancers only have to pay €60 per month instead of €286.15. This was initially put into place for freelancers under 30, but was eventually extended to all beginner freelancers, regardless of age. You can take advantage of this benefit for a maximum of 2 to 3 years.
The quota is divided into four tranches and works as follows:
- Tranche 1 (months 1 to 12): €60/month
- Tranche 2: (months 13 to 18): €143.10/month
- Tranche 3 (months 19 to 24): €200.30/month
- Tranche 4 (months 25 to 36): €200.30/month
To qualify for this benefit for a maximum of 2 to 3 years, specific requirements apply in each case. For more information, you should consult a tax advisor for a detailed explanation of your specific circumstances.
Requirements for being self-employed in Spain
For citizens of the European Union/European Economic Area (EU/EEA) or Switzerland, registering as a self-employed worker is very straightforward. You don't need a work permit from your country of origin or a visa. All you have to do is register as a self-employed individual in Spain—it’s essentially the exact same process as for a Spanish citizen.
The main difference to remember is you’ll have to apply for a Foreigner Identity Number (NIE). This is a code for the tax identification of foreign nationals in Spain. It's a personal document required to process applications with the Spanish Tax Agency (Hacienda), and to open a bank account or sign an employment contract, among other formalities.
Registering as a foreign self-employed worker from a non-European country
As a non-European, there are a few more things to consider. They are:
- Depending on your country of origin, you might need a visa to get into Spain. The best thing to do is apply for the visa from your nearest Spanish consulate before leaving your country of origin.
- If necessary, you'll have to apply for a residence permit allowing you to live in Spain for a prolonged period of time.
- You also need a Foreigner Identity Number (NIE), just like EU citizens do. You can apply for the NIE by making an appointment at the local Immigration Office, together with your passport and the EX-15 form.
- You'll need a Spanish bank account. If you don't have one yet, check out the options N26 has for you. You can open a self-employed worker account straight from your smartphone in minutes.
Requirements for foreigners who register as self-employed workers
Before starting freelance work, it's crucial to register as a freelancer in Spain. After completing the requirements listed above, you'll need to continue with the following steps.
Register with the Tax Agency (Hacienda)
You have to register with the Tax Agency to pay the Tax on Economic Activities (Impuesto sobre las Actividades Económicas - IAE). Simply book an appointment via the Agency's website at the office closest to you—just click here to find it.
- At the Tax Agency, you have to choose the category that corresponds to the business activity you are going to carry out as a freelancer. You can browse the list of categories to find your own, although the staff at the tax office will be able to advise you.
- Then, you'll need to complete form 036 or 037—whichever is the most appropriate for your specific case.
- Don't forget to bring your NIE, original passport, a photocopy of your passport, and the details for your Spanish bank account.
- In addition, depending on the business area you’re going to work in, you may need a certificate validating your studies (for health professionals, teachers, lawyers, etc.).
Got everything? Great! Now you can start invoicing your customers. But there's still one more important step—registering with the social security authorities.
Register with Social Security
Within 30 days of registering with the Tax Agency, you need to go to your local social security office to sign up for the Special Regime for Self-Employed Workers (RETA). Once your appointment is booked, be sure to bring these documents with you:
- Original passport and one photocopy
- Form 036 or 037 (whichever one the Tax Agency gave you)
- IRPF personal income tax form (given to you by the Tax Agency)
- Municipal registration certificate (padrón)
How much tax do self-employed workers pay in Spain?
In addition to the self-employed quota mentioned above, freelancers in Spain have to pay:
- Personal Income Tax (IRPF)—This is paid quarterly, once you have declared your income from your professional activity and deducted your expenses. From that amount, you'll pay 20% personal income tax. In addition, you'll have to file an annual tax return ("declaración de la renta"). If you have any worries about this process, consult our article on how to file this tax return.
- Value Added Tax (VAT)—This is the tax that you have to add to each invoice for your services, and it’s generally 21% of the price. You declare it quarterly, and should deduct the VAT you pay on your expenses as a self-employed worker from the VAT you charge to your customers. The difference between the two is what you have to pay the Tax Agency (Hacienda) every three months.
N26 for foreign freelancers and self-employed workers
If you’re traveling from abroad and hoping to start working as a freelancer in Spain, N26 is here to help. We are the first neobank becoming a collaborating entity with the Social Security system in Spain! This means you can collect your benefits in your N26 account and also pay your freelancer tax and make other payments to the administration through us.
Also we’ve created multiple accounts specifically designed for the self-employed. Earn while you spend with the free N26 Business Standard account, which comes with 0.1% cashback on every purchase you make with your N26 debit Mastercard. Or choose from one of our premium plans, packed with more perks like savings and budgeting tools, extensive insurance, and even more cashback. Don’t speak Spanish yet? No problem. All our services are available in 5 languages: English, Spanish, German, French, or Italian. Visit our compare page to find the plan that’s right for you.