Freelance in Spain: How to become autónomo

If you’re considering freelancing in Spain, you’ll be joining 3 million freelancers who make up 17% of the working population.

A freelancer or self-employed person's popularly referred to as autònomo in Spain. Officially it’s called permiso de trabajo por cuenta propia

Here’s what you need to know about becoming a freelancer in Spain:

1. Identify if you're considered an autónomo
2. The different types of freelancers
3. How to become a freelancer in Spain: Registration as an autónomo
4. Administrative and financial responsibilities as autónomo
5. The pros and cons of being autónomo in Spain
6. How to de-register as an autónomo
7. Popular freelance jobs in Spain

In Spain, even those who offer online tutoring or sell on Etsy or eBay are considered autónomo and need to register as autónomo. In the Spanish government’s eyes,

Any person who invoices customers and earns any amount of money by providing services or selling products needs to register as an autónomo.

Exemptions for registering as autónomo

Are you freelancing sporadically and earning less than Spain’s minimum wage? The Supreme court says that you’re exempt from registering as an autónomo, barring a few exceptions.

These exceptions are rather confusing to interpret. For example, if you have an (online) store and earn every few months or less than the minimum wage, you’ll need to register as autónomo as the Social Security office sees this as regular economic activity.

Due to the confusing exemptions, we recommend that you hire a gestor, a sort of consultant who'll help you with taxes and other bureaucratic affairs.

Spain classifies self-employed individuals into 6 types.

It’s important to know the different types as this determines how much tax you pay.

The 2 main types include:

1. Autónomo Profesional (self-employed professional)- These are freelancers who can set their schedules, work from anywhere, and work for multiple clients. You can be a registered freelancer (profesionales colegiados) such as doctors or engineers or unregistered freelancers (no colegiados) such as translators and designers.

2. Trabajador Autónomo (Self-employed worker)- people who’re their bosses and can hire others, such as singers, athletes, taxi drivers.

The other types include:

3. Autónomo Societario (Corporate self-employed)- when you own and run a sociedad limitada (similar to an LTD company).
4. Autónomo Colaborador (self-employed collaborator)- you work for your spouse or a direct family member as a freelancer.
5. Trabajador Autónomo Económicamente Dependientes (Dependent self-employed worker or TRADE)- when you get at least 75% of your income from 1 employer.
6. Autónomo Agrarios (self-employed agricultural worker)

We’ve outlined 6 steps that show how to become an autónomo in Spain:

1. Get a Spain freelance visa (if applicable)
2. Get your NIE number
3. Register with the tax authority
4. Open a bank account in Spain
5. Register with social security
6. Get required licences (if any)

Only non-EU/EEA citizens need to apply for a Spanish freelance work visa from their home country to legally live and work in Spain. This's valid for 1 year and each renewal grants a 2-year visa.

You’ll need to meet the following conditions and submit the following documents:

• Be at least 18 years old.
• Show certificate of no criminal record, obtained from the country you spent your last 5 years in.
• Show a medical certificate proving you pose no threat to the public.
• Have documents proving you’ve got the appropriate educational or professional experience.
• Show proof of private health insurance.
• Show proof of funds.
• A filled-in Modelo EX-07.
• Passport and copy.

Ensure that all your documents have been translated into Spanish and have an apostille stamp.

If you’re starting your own business, you also need:

• Submit a pre-approved business plan by one or all of Spain’s relevant organisations (UPTA, CIAE, OPA, UATAE, ATA).
• Proof of initial investment.

Once you arrive in Spain, you need to collect your residence permit within 30 days to legally live and freelance in Spain.

Applying for a freelance visa from within Spain

As a non-EU/EEA citizen already living in Spain for at least 3 consecutive years, you can modify your current residence permit to a self-employed residence permit from within Spain. You’ll need to:

• Submit a pre-approved business plan by one or all of Spain’s relevant organisations (UPTA, CIAE, OPA, UATAE, ATA).
• Show you’ve sufficient funds.
• Submit a CV showing your relevant qualifications and experience.
• Fill in Modelo EX-07.

Your Número de Identificación de Extranjero (NIE number) is your unique tax identification number. It’s one of the most important documents you need for registering as an autónomo in Spain, among other things.

Autónomo’s in Spain need to pay 2 types of taxes– Income tax (IRPF- Impuesto sobre la Renta de Personas Físicas) and VAT (IVA). To pay these, you need to register with the tax agency, also known as Agència Tributària, AEAT or Hacienda in Spain.

As an autónomo, you’re also required to register the type of economic activity you’ll perform so that you can pay the appropriate economic activity tax or IAE (Impuesto sobre las Actividades Economicas). To register this, fill in the code(s) that corresponds to your economic activity in Modelo 036 or Modelo 037.

Although IAE registration is essential, it’s good to know that most freelancers don’t need to pay this tax unless their net turnover's more than €1,000,000.

You need the following documents to register with the tax agency in Spain and receive your personal tax certificate (IRPF):

• Modelo 030 to register as a resident taxpayer, if not already done.
• Passport and copy (residence permit, if applicable)
• NIE number
• Town hall address registration (certificado de empadronamiento)
• Modelo 036 or Modelo 037 (find out which one’s for you) which confirms your name, location and type of economic activity.

Although not mandatory, it’s definitely convenient to have a Spanish bank account. Not only can you get paid easily as a freelancer but also have the mandatory social security contributions deducted automatically every month.

You’ll have 30 days after registering with the tax authority to register with the social security (tesorería de la seguridad social).

Specifically, you need to register under the special regime for self-employed workers called RETA (régimen especial para trabajadores autónomos). This's mandatory – even if you receive no income.

Make sure you already have your social security number before the registration with RETA.

Bring the following documents to register with RETA:

• Passport and copy (residence permit, if applicable)
• NIE number
• Town hall address registration (certificado de empadronamiento)
• Filled out form TA.0521 to declare economic activity and appropriate social security contributions
• Tax certificate (IRPF)
• Bank details to set up a direct debit (optional)

You might need to get appropriate licences before starting your business if your place of business employs others or has an impact on others.

For instance, you need a licencia de apertura or an opening licence from the town hall if you’re open to the public.

Even if you operate from a home, you need to have a licence if other employees are working or customers are visiting. E.g a creche owner or home accountant. In this case, it’s in your interest to get the license too as you can table the cost for electricity, water, etc. as business expenses.

Any autónomo's responsible for registering themselves with the tax and social security agency, keeping track of their finances, paying VAT and personal income tax (IRPF), and being personally liable for any debts.

Every autónomo's responsible for invoicing their customers correctly and maintaining accounting records that meets the legal Spanish standards.

This means maintaining a simple report of all business expenses and income from providing services. In addition, all your invoices must contain:

• Date of issue/transaction
• Order number
• VAT ID/number
• Address: yours and the customer’s
• Detail of service/goods provided, including quantity and unit prices
• Total amount invoices (and discounts, if any)
• VAT rate applied

Personal income taxes (IRPF) are charged at a progressive rate (19% - 47%) and vary per autonomous region in Spain.

Autónomos need to file income tax in advance, every quarter, at 20% and annually between April-June. That means, every January, April, July and October, you need to make an advance payment of:

(Business income - business expense) x 20%

You also need to declare your VAT (IVA) taxes quarterly. The VAT is charged at 21% on the selling price/service cost (must be on all invoices). This is how you calculate it:

VAT paid on business expenses - VAT charged to customers

Do note that when dealing with customers outside the EU, you don’t have to charge VAT to your customers.

Autónomos need to file a VAT and income tax return (declaración de la renta) timely to avoid penalties and to keep their (freelancer) work permit.

Here’s a summary of when you need to file taxes as an autónomo:

• January 15- Form 111 and 115 by direct debit
• January 25- Form 130 and 303 by direct debit
• April 15- Form 130 and 303 by direct debit
• June 27- Form 100
• July 15- Form 130 and 303 by direct debit
• October 15- Form 130 and 303 by direct debit

How to pay autónomo taxes in Spain?

These're the main tax forms you need to fill in as an autónomo:

• Form 303 - quarterly VAT
• Form 390 - annual VAT
• Form 101 - quarterly income tax returns
• Form 100 - annual income statement

Other forms you may need in specific circumstances include form 720, 347, 190, 180, 349, 115, and 111.

If you need help, consider hiring a gestor who can take care of the bureaucratic affairs. You can table their fees as a business expense and make it tax deductible!

Although monthly contributions to social security are the highest in Spain within the EU, they provide plenty of benefits:

• Access to free public healthcare
• Maternity and paternity leave
• Pension
• Coverage for work accidents or illnesses, unemployment, and any dependent family living with you.

The amount you contribute monthly to social security's calculated by multiplying 30.6% to the base amount you want to contribute. The base amount ranges from €230 - €500, monthly (in 2023).

So, at minimum, your monthly contribution (cuota de autónomo) is €230. If you want to pay more than the minimum, multiply 30.6% to the base amount of your choosing.

Discounts for new freelancers

There’s some relief for new freelancers thanks to the new autónomo law in Spain. You’ll pay a discounted flat rate for the first 2 years and gradually move up to paying the full contribution.

• First 12 months= €80
• Second 12 months = €80 (if you don't surpass the minimum wage (SMI) of €1,116)

It’s also good to know that any social security contributions to RETA are tax-deductible.

Special social security rates

Self-employed women under 35 and men under 30 are entitled to additional social security benefits if they’ve recently registered as autónomo.

In this case, you can enjoy an additional 30% reduction in the following 12 months after the new freelancer discounted rate mentioned above. This means you’ll have 36 months of reduced social security contributions before moving up to paying €294 per month.

For more information, refer to the updates by Seguridad Social.

Changes to Spain’s social security system from 2023

From 2023, there are 15 income brackets for freelancers and each has a different social security contribution. The lowest bracket is at €670 and the highest €6,000.

The new system is thought to be phased in over 9 years, but currently only 2023-2025 social security contributions have been confirmed.

Freelancers will need to pay social security contributions ranging between €230 and €500, depending on which bracket their net income corresponds to.

While this means, greater protection for temporarily unemployed or low earning freelancers, it’s bad news for mid to high-income earners. Anyone who earns above €1,700 per month is going to be affected by a sharp rise in social security contributions – almost double or more!

Here’s what you can expect to pay for social security contributions in Spain from 2023-2025:

Some recommendations to ease your life and reduce stress:

• Read up on Spain’s work culture to understand how to successfully do business.
• Get personal insurance even though you contribute to social security and get free public healthcare. This way you don’t have to wait months for treatment and you can get back to work quickly.
• Create your pension fund and don’t just rely on the government’s pension scheme for the self-employed as this is generally not enough.
• Have liability insurance to protect yourself, in case of debt or harm.
• Hire an accountant or a lawyer, especially if you’re starting your own business or if you don’t have time to file taxes quarterly

Now that you’ve read all of it, here’s a summary of the pros and cons of becoming a freelancer in Spain.

Pros

• Spain’s best cities offer great co-working spaces. Barcelona is especially attractive to start-up founders and is often compared to the Silicon Valley in the US.
• Spain is a fantastic place to freelance as it offers a great work-life balance, high quality of life, and generally a lower cost of living.
• You don’t need any initial capital investment to start freelancing (unless you launch a business).
• Your social security contributions provide free health care for you and your dependents. It also covers you for accidents, unemployment, and pension.
• Unlike other countries, you get time off for maternal or paternal leave.
• You can bring your dependent family members on the self-employment visa.
• You can easily de-register as a freelancer and stop paying social security if you’re not earning enough.
• You don’t have to follow a very rigorous accounting system, especially if you don’t own a business.

Cons

• Quarterly filing of taxes takes time and costs money.
• Social security contributions are quite high and the new autónomo law may or may not make things easier on freelancers.
• The pension scheme for self-employed workers is not great compared to those working for a company.
• You’re liable for your debts and can lose all your possessions unless you own a company.
• There is no income if you take a holiday or fall ill.

Not earning enough or need to stop? De-registering as an autónomo is quick and simple:

• Fill in Modelo 036 or 037 for the tax authorities.
• Terminate your social security as a self-employed person.
• File your annual tax returns and VAT.

If after reading all this, you're keen on becoming a freelancer in Spain, here’re some popular freelance jobs for inspiration:

• Business, marketing, or communication consultant
• English teacher
• Bar or restaurant owner
• Translation services
• IT or engineering consultants
• Web designers
• Personal Assistants, etc.
• Construction workers