If you’re considering becoming a freelancer or starting a one-person business in Spain, that’s great! There is so much to take advantage of when working in this wonderful country. But there are a few things you should know. First, you will need a Foreign Identity Number (NIE). This number will be linked to your Social Security obligations. It’s rather easy to get set up as an autónomo in Spain, which is the Spanish term for a freelancer. Certain professionals may need to have their qualifications recognised in Spain before being able to start their activity (like doctors, lawyers, etc).
In order to become an autonomo in Spain, you will have to go through the following two most important steps:
1. Register your business with the Spanish tax authority (Agencia Tributaria).
You’ll have to choose a category that describes the type of work you do, which is related with a number/code. You’ll have to complete forms 036 or 037, which gives you a personal tax certificate.
2. Register with the Spanish Social Security System (Tesorería de la Seguridad Social).
You’ll have to register here within 30 days of registering with the Tax Authority. Bring along with you the original and copy of your passport, NIE document, the tax certificate you got from the tax authority, the 036 or 037 form, and the filled-out application form. Once registered, you will have the right to use the Spanish state healthcare system.
You can start quickly and easily and contribute only a monthly investment in social security costs.
You can stop just as easily in case you don’t have earnings all year round, so you don’t have to pay social security when you have no income. You can cancel your self-employed status up to three times a year. Nevertheless, please bear in mind that you will have to pay the full month's fee, even if you are only registered for a couple of days. Don't forget that the payment is always made on a monthly basis.
There is relatively easy invoicing and accounting. You can do it yourself or for around 50-100 euros/month, an accountant can take care of it.
By paying social security, you obtain certain coverages through the state, like:
- health insurance coverage for yourself, your husband or wife and children
- coverage in case of an accident at work
- unemployment type of coverage (Prestación por cese de actividad) when you have to stop your activity. You must apply for it at the mutual insurance company that collaborates with the social security system to which you are affiliated. Thanks to recent reforms in the self-employed regime, it is now possible to enjoy benefits for termination of activity due to economic causes, force majeure, and for other more specific reasons. In any case, when applying for this benefit, the reasons for the termination are carefully checked to avoid fraud. The system is not meant for any self-employed person who wishes to stop working to receive this benefit. You will be covered from 4 months to a maximum coverage of 2 years (24 months).
- Training
The monthly costs of social security are for most professions a minimum of 234.30, which is a lot of money to start with. During 2023, a system of payments in instalments has been implemented, so that the monthly instalment payment is proportionate to the annual income received. You can check this out here [Las nuevas cuotas que pagan los autónomos en 2023: de 234,5 a 510 euros al mes | Economía nacional e internacional | Cinco Días (elpais.com)] Even with this improvement, it should not be forgotten that Spain is one of the most expensive countries for becoming an freelancer in this aspect.
The state pension scheme for an autonomo is very little, mainly because most freelancers decide to pay the minimum coverage. Still it’s a lot less than if you worked for a normal company.
You completely depend on the income you generate, so in case of an illness you might have no income at all, unless you receive medical leave, which has to be requested by the Public Health Service. This usually happens in cases of disqualifying illness. In this case you should cease your activity and apply for Temporary Incapacity Benefit.
Because of these disadvantages, we recommend these actions for anyone thinking of becoming a freelancer in Spain:
1. Get yourself a good private health insurance. Though the medical attendance of the Social Security is rather good through the Spanish government, you can’t risk running into month or yearlong waiting lists in case you need an operation. If you don't already have good health insurance, look at Caser's Self-Employed Health Insurance. In addition to being a very comprehensive insurance with international coverage, it has another advantage: you can deduct the cost when you file your tax return. As you can see, this service doesn’t have to be expensive. If you know that you’re a very healthy person that won’t make a lot of use of doctors, but you still want ease of mind, you could opt for a policy with co-payment and less coverages. You can tailor your insurance to your needs.
2. Don’t only count on a pension scheme through the government. If, according to your income, you pay the minimum to social security, you could contract your own private pension scheme with your insurance agent. Start as young as possible, even though you might save very low amounts during the first few years. Be independant and prepare also for your older days.
3. Get yourself the correct legal advice for contracts and liability issues. Sometimes a liability insurance is useful, either professionally or as the main beneficiary, so no one can claim your private possessions.
4. Work hard, but play harder! Life is too short to only work. Don't forget that being self-employed not only fills you with responsibility, but it also gives you freedom and decision-making power. If you choose this path, don't forget to enjoy your free time as well, thus taking care of your physical and mental health.
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