Business & Autónomo FAQs

Two registrations on the same day:

1. Hacienda: Modelo 036/037 (tax registration). Declares your activity, address, IVA regime.
2. Social Security (TGSS): RETA registration. Triggers monthly cuota.

Required:

• NIE (foreign ID)
• Spanish bank account
• Business activity code (CNAE / IAE)
• Address (can be home address)

Done online with digital certificate or in person. See autónomo pillar.

Since 2023, based on declared net income. First-year flat rate (tarifa plana) of €87/month for 12 months for new autónomos. After that: progressive scale by income bracket.

Approximate ranges:

• Low income (€0–€8,200/year net): €230/month
• Mid income (€20,000–€40,000): €290–€350/month
• High income (€60,000+): €470–€590/month
• Top bracket (€200,000+): €590/month (capped)

Forecast your income at registration and update every 2 months if it changes. See cuota guide.

A flat-rate cuota of €87/month for the first 12 months (called tarifa plana or tarifa reducida).

Eligibility: you have NOT been registered as autónomo in the previous 2 years.

The flat rate is a major incentive: vs. ~€300 standard cuota, you save ~€2,500 in the first year. Subsequent 12 months may have reduced cuotas in some regions (50% or 30% reduction).

Total first 2-year savings: typically €3,000–€5,000.

Yes — anything directly necessary for your business:

• Software, subscriptions, online services
• Equipment (laptop, phone, professional tools)
• Professional fees (legal, accounting, marketing)
• Internet and mobile (proportionate if mixed personal/business use)
• Travel and accommodation for client work
• Training, courses, professional development
• Home office: 30% of utilities (if declared to Hacienda)
• Cars: limited deductibility (rules vary by use category)
• Meals: meals with clients deductible up to €26.67/day per person, max €11/day for self

We help structure deductions to maximise legal savings within Hacienda guidelines.

Spain's autónomo is broadly equivalent to:

• UK sole trader — but with mandatory monthly social security (no contributions optional in Spain)
• US sole proprietor — but Spain has its own social security regime separate from US Social Security
• Irish PAYE+PRSI Class S — similar concept but separate quotas

Key differences: Spanish autónomos pay much higher mandatory social security (€87 minimum → €590+ for high earners) and have stricter quarterly filing requirements.

Yes. The cuota is mandatory once you're registered, regardless of income. Two options if income drops:

1. Reduce your declared income: every 2 months you can adjust to match actual income, reducing the cuota
2. Baja temporal: deregister temporarily. Cuota stops, but you lose business activity rights and may face issues re-registering

For low-income months, lowering to the minimum bracket (€230) is usually enough. For extended downturn, baja temporal may be better.

Yes — known as pluriactividad. Common arrangement:

• You work for an employer (PAYE-style)
• You also run a side business as autónomo

Tax: total income is aggregated for IRPF. Social security: you pay both employee contributions (through employer) and reduced autónomo cuota.

Special reduced cuota for pluriactividad: ~50% off the standard cuota for first 18 months. Apply at registration.

Annual tax on commercial activity, paid to your local municipality. Most autónomos and small businesses are EXEMPT (turnover under €1M).

For autónomos and SLs with turnover under €1M:

• No IAE payment required
• You still register your activity code (Modelo 036)

For larger businesses (€1M+ turnover): IAE applies, rates vary by activity and municipality. Typically €500–€10,000+/year.

Yes. Many autónomos register their home as the domicilio fiscal. No special permit needed for most service-based activities.

Implications:

• Your home becomes the "fiscal address" for Hacienda correspondence
• Some activities require commercial premises (restaurants, retail, manufacturing)
• You can deduct 30% of home expenses (utilities, IBI, mortgage interest) if you declare specific space use

For digital services and consulting: home address is standard and unproblematic.

Most autónomos do. IVA registration is part of Modelo 036 registration. Standard IVA rate: 21%.

Common rates:

• Standard 21%: most goods and services
• Reduced 10%: hospitality, transport, residential property
• Super-reduced 4%: essentials

EXEMPT activities (no IVA charging, but no IVA recovery on inputs):

• Medical and healthcare services
• Financial services
• Education
• Insurance

For very small autónomos in specific sectors (taxi, agriculture, small retail). Fixed IVA payments based on activity modules.

Pros: simpler quarterly filings, fixed predictable amounts. Cons: limited deduction of input IVA, only available for specific CNAE codes.

Most expat autónomos (consultants, IT, creatives) use the standard IVA regime — better deduction options.

Immediate consequences:

• Surcharge: 10–20% on the unpaid amount
• Account locked (no access to services like health card, family allowance)
• Bank account can be embargoed if persistent

The TGSS sends automated demand letters. Pay or apply for aplazamiento (deferred payment plan) within 30 days.

Long-term non-payment: criminal proceedings for tax evasion (rare but possible). Always communicate with TGSS before missing payments.

Autónomo is suitable for:

• Solo businesses earning under €60–80k/year
• Service-based with low expenses
• Early-stage testing of a business idea

SL Company makes sense when:

• Earning over €60k/year profit (where dividend tax savings exceed company overheads)
• Liability protection matters (consulting, professional services)
• Multiple co-owners
• Investing capital in the business
• Planning to grow and hire employees

See full autónomo vs SL comparison.

Total typically €4,500–€6,000:

• Minimum share capital: €3,000 (or €1 from 2022 with creditor protection rules)
• Notary + Registro Mercantil: €700–€1,200
• Solicitor/gestor: €600–€1,500
• Initial NIE/document fees: €200–€400

Ongoing annual costs:

• Accounting + tax filings: €1,500–€3,000
• Annual accounts deposit: €100–€200
• Civil liability insurance: €300–€800

See SL formation guide.

Yes — 100% foreign ownership is permitted. Requirements:

• Spanish bank account in the SL's name (for share capital deposit)
• All shareholders with NIE
• At least one director (can be foreign, can be remote)
• Registered office in Spain (your address or a virtual office)

Companies in EU/EEA face no restrictions. Non-EU may face Investment Screening for sensitive sectors (defense, telecoms, etc.). For most business types: no restrictions.

4–8 weeks typically:

• Week 1: NIE applications for all shareholders
• Week 2: company name reservation, draft constitution
• Week 3–4: bank account opening, share capital deposit
• Week 5: notary signing (formal constitution)
• Week 6–8: Registro Mercantil registration, Hacienda registration

Express formation (using a "shelf company" structure): 1–2 weeks but higher legal fees.

Two main Spanish company types:

• SL (Sociedad de Responsabilidad Limitada): minimum capital €3,000. Up to ~50 shareholders typically. Best for SME and most private businesses. Equivalent of UK Ltd.
• SA (Sociedad Anónima): minimum capital €60,000 (25% paid at formation). Designed for larger businesses, IPO candidates, regulated activities. Equivalent of UK PLC.

99% of expat-owned Spanish companies are SLs.

Yes. A single shareholder/director structure is allowed — known as Sociedad Unipersonal Limitada (SLU).

You must:

• Declare the SLU status when forming
• Note "Sociedad Unipersonal" on all corporate communications
• Hold meetings even with just yourself (and minute them)

Common structure for solo expat entrepreneurs.

Yes — Spanish company formation requires notarial signing. The notary:

• Verifies share capital deposit
• Reads and signs the constitutional deed (escritura de constitución)
• Lodges the deed with the Registro Mercantil

The shareholder(s) and initial director(s) must attend (or send POA holders). Costs: ~€500–€800 in notary fees.

Yes. SLs can operate nationally regardless of where they're registered. The registered office determines:

• Which Land Registry holds your records
• Tax jurisdiction for corporate tax (always national for IS)
• Wealth tax exposure for the shareholders (regional)

Companies typically register in the autonomous community where they actually operate. But for tax reasons (Madrid bonifications), some clients register HQ in Madrid even if main operations are elsewhere.

Authorized capital = the maximum capital the company can issue. Paid-up capital = what's actually been contributed by shareholders.

For SLs: minimum €3,000 must be fully PAID at formation (no partial payment). For SAs: 25% paid at formation, 75% callable later.

Since 2022, SLs can form with €1 paid capital under the "Sociedad Limitada Express" regime, but with creditor protection rules (e.g., 20% of annual profits go to reserve until €3,000 reached).

Yes, via Power of Attorney. Process:

1. Apply for NIE (consular or remote routes)
2. Sign POA in your country at a Spanish consulate or local notary (with apostille + translation)
3. POA holder (your solicitor in Spain) handles bank account, signing, registration

Total time: 6–10 weeks vs. 4–8 weeks if you visit Spain. Higher solicitor fees (~€1,500–€2,500 vs. €700–€1,200).

The legal description of activities your SL can perform. Listed in the constitutional deed.

Modern approach: broad objeto social listing many CNAE codes (e.g., "consulting, marketing, software development, education, e-commerce..."). Allows flexibility.

Don't over-restrict: changing objeto social later requires shareholder resolution + notary + Registro Mercantil amendment (~€500–€1,000).

Yes. Common structure:

• 2–3 foreign co-founders (each with NIE)
• Each contributes share capital pro rata
• Director(s) appointed from among shareholders or external

Recommended: shareholders' agreement (pacto de socios) covering decision rights, exit terms, vesting if relevant. Drafted alongside the constitution. We draft these regularly for international founder teams.

Standard: 25% on net profit.

Reduced rates:

• 15%: New SLs for first 2 profitable years (Impuesto sobre Sociedades reduced rate for newly formed entities)
• 20–23%: Cooperatives and specific business types

Quarterly payments via Modelo 202 (April, October, December) based on prior-year profit or installment estimate. Annual return Modelo 200 due 6 months + 25 days after fiscal year end. See corporate tax guide.

Generally yes for most activities. Standard IVA rate: 21%.

Reduced rates:

• 10%: hospitality, transport, residential property
• 4%: super-reduced (essentials, books, medicines)

EU B2B sales: 0% (reverse charge, your customer self-accounts for IVA in their country).

Quarterly IVA returns via Modelo 303. Annual summary Modelo 390. See IVA registration.

Originally only employees. Since 2023, Spain extended Beckham Law to certain entrepreneurial activities:

• New SaaS founders and tech entrepreneurs
• Qualified researchers (R&D) at universities/research centers
• Some highly qualified professional roles

Standard autónomos are NOT eligible. Most expat consultants form an SL (or operate as a foreign company) and structure salary + dividend mix instead. See Beckham for business owners.

Two-step taxation:

1. At company level: 25% Impuesto sobre Sociedades on company profit
2. At shareholder level: 19–28% (savings income scale) on dividend received

Effective rate: roughly 40% combined (vs. ~47% top marginal IRPF if same income earned as employee).

For high earners, SL + dividend distribution can save significant tax. But comes with company overheads.

When a Spanish autónomo or SL invoices an EU business in another EU country, IVA is REVERSE CHARGED:

• Spanish invoice shows €0 IVA
• Customer self-accounts for IVA in their country
• Both sides need each other's EU VAT number (Spain's NIF-IVA)

For services to EU consumers (B2C): standard Spanish IVA applies. For services to non-EU (UK post-Brexit, US): no Spanish IVA (export of services).

Yes if you sell or buy from other EU businesses. Apply at Modelo 036/037 or update existing registration.

Once registered:

• You appear in the EU VAT Information Exchange System (VIES)
• Customers in other EU states can verify your VAT number
• You can issue zero-rated B2B invoices to EU customers
• You file Modelo 349 quarterly (recapitulative declaration of EU transactions)

Mandatory for B2B EU trade. Optional but recommended for service exporters.

The Canary Islands have a separate tax system:

• VAT replaced by IGIC (Impuesto General Indirecto Canario) at 7% (vs. 21% IVA)
• ZEC (Zona Especial Canaria): special reduced corporate tax of 4% for qualifying companies
• Reduced personal income tax in some categories

The ZEC regime is attractive for SaaS, e-commerce, R&D companies. Conditions apply: minimum local investment + employment + activity. See SaaS company guide.

Yes. Spain offers significant R&D tax credits (deducción I+D):

• 25% credit on R&D expenses (or 42% in some sectors)
• Additional 17% credit if employee researchers are dedicated R&D
• Patent box: 60% reduction on patent/technology income (Patent Box regime)

Documentation requirements are strict: technical reports, project documentation, sworn auditor certification of R&D status. We coordinate with specialist R&D consultants for clients with eligible activities.

Entidades de Tenencia de Valores Extranjeros (ETVE) — Spanish holding companies with favourable taxation on foreign dividends and capital gains.

Benefits:

• Dividends from qualifying foreign subsidiaries: 95% exempt
• Capital gains on sale of qualifying foreign subsidiaries: 95% exempt

Conditions: 5%+ ownership of foreign subsidiary, held for 1+ years, foreign subsidiary subject to nominal tax of 10%+.

Used by international groups for European holding structures. Less relevant for solo expat businesses.

Net operating losses can be carried forward INDEFINITELY (no time limit).

Annual limit on use: 70% of taxable profit, up to €1M loss carryforward per year offset.

For SLs with €1M+ losses and profitable subsidiaries: useful for tax planning. For most expat SLs: small carryforwards used in subsequent profitable years.

Mandatory accounting records:

• Libro Diario: daily journal of all transactions
• Libro Mayor: general ledger by account
• Libro de Inventarios y Cuentas Anuales: annual inventory + accounts
• Customer/supplier invoices (received and issued)
• Bank statements (all accounts)
• Asset acquisition documentation

Annual accounts (Cuentas Anuales) must be deposited with the Registro Mercantil within 7 months of fiscal year end. Penalty for late deposit: €1,200–€60,000.

Yes. Non-resident shareholders receive Spanish dividends with:

• Spanish withholding tax: 19% (for EU/EEA), 24% (non-EU)
• Treaty rates often reduce this further (e.g., UK 10–15%, US 15%)

The shareholder claims foreign tax credit in their home country. Net effective tax: typically 15–25% on dividends, varying by treaty.

For non-residents, dividend distribution can be tax-efficient vs. salary distribution.

Step by step:

1. Register the employee with Seguridad Social BEFORE they start work
2. Draft a contract using one of the official templates (indefinido, temporal, formación, fijo-discontinuo)
3. Submit contract to SEPE (employment agency) within 10 days
4. Set up payroll system for monthly Modelo 111 (IRPF withholding) and quarterly Modelo 303 (IVA, if relevant)

Total employer cost: salary + ~30% social security + paid holidays + extra pay months (June + December). Total ~32–35% above gross salary. See hiring guide.

Statutory minimums:

• SMI (Salario Mínimo Interprofesional) 2025: €1,323/month × 14 payments = €18,522/year
• 30 calendar days paid holiday minimum (varies by collective agreement)
• 14 paid public holidays
• 16 weeks paid maternity/paternity leave
• Maximum 40 hours/week, overtime limited (typically 80 hours/year max)
• Right to disconnect outside working hours (since 2018)
• Annual contract review
• Sick leave: 60% of salary days 4–20, 75% from day 21

Many sectors have collective agreements (convenios colectivos) that improve on the minimums.

Spain requires CAUSE. Three categories:

1. Disciplinary dismissal (despido disciplinario): gross misconduct, repeated absences, dishonesty. If justified: no severance. If unjustified: severance applies.
2. Objective dismissal (despido objetivo): economic, technical, organisational reasons. 20 days' pay per year of service, max 12 months.
3. Collective dismissal (ERE): redundancy affecting multiple employees. Requires worker consultation period.

Unfair dismissal (despido improcedente): 33 days' pay per year of service, max 24 months. Never dismiss without solicitor input — wrongful dismissal lawsuits are common and expensive. See unfair dismissal guide.

Two main contract types:

• Indefinido (permanent): no fixed end date. The Spanish default. Dismissal requires cause + severance.
• Temporal (fixed-term): specific end date or task. Limited circumstances post-2022 reform: covering substitution, specific production peaks, certain training contracts.

The 2022 labour reform DRASTICALLY restricted temporal contracts. Most new hires must be indefinido. Penalty for misusing temporal: contract converts to indefinido + back-pay + fines.

Probation periods:

• Indefinido for technicians: max 6 months
• Indefinido for other workers: max 2 months
• Small companies (<25 employees): max 3 months

During probation: either side can terminate without cause or severance. After probation: full dismissal rules apply.

Probation must be explicit in the written contract.

Pagas extras = extra salary payments in June and December, totalling 1 extra month of salary each. Standard Spanish practice.

Two structures:

• Pagada (paid): separately in June and December (€1,000 monthly salary → €2,000 in June, December)
• Prorrateada (prorated): distributed across 12 monthly payments (€1,000 monthly + €166.67 = €1,166.67/month)

Contract should specify. Total annual: 14 × monthly salary regardless of structure.

Yes, but with careful structure. Risks:

• Falso autónomo (false self-employed): if the worker is treated like an employee (fixed hours, single client, dependent), Hacienda reclassifies as employee. Massive back-tax + penalties on the company.
• Indicators of false autónomo: works exclusively for you, uses your tools/office, you direct their daily work, fixed monthly invoice

True freelancers: multiple clients, own tools/office, set their own schedule, invoice based on outputs. See false self-employment guide.

TRADE (Trabajador Autónomo Económicamente Dependiente): a special autónomo category for workers earning 75%+ of their income from ONE client.

Special rules:

• Contract terms more like employment (notice periods, minimum payment, vacation rights)
• Some employment protections (collective bargaining via TRADE associations)
• Cuota and tax obligations same as standard autónomo

Useful for genuine consultants with a single major client (avoiding false-autonomo accusations).

Both parents now entitled to 16 weeks of paid leave (since 2021 reform):

• 6 weeks immediately after birth (compulsory)
• 10 weeks flexibly distributed in the first 12 months

Paid at 100% of contribution base (subject to maximum). Social Security pays the employee directly, not the employer.

For self-employed (autónomos): same 16 weeks at 100% of declared contribution base. Application via Seguridad Social electronic office.

Sector-specific collective bargaining agreement covering most Spanish workers. Negotiated between unions and employer associations.

Convenios cover:

• Minimum salaries (often above SMI)
• Working hours and shift patterns
• Holiday provisions
• Promotion rules
• Termination procedures

Employers must apply the relevant convenio (commerce, hospitality, IT, etc.). Check which convenio applies to your business activity — significant cost differences between sectors.

Yes, with right-to-work documentation:

• EU/EEA citizens: no work permit needed, just NIE
• Non-EU citizens: require Spanish work permit BEFORE employment starts
• Already-resident non-EU: check their TIE specifies work authorization

For new hires of non-EU workers from abroad: complex permit process (3–9 months). For digital nomads with DNV: they're work-authorised but only for the specific role declared. See DNV guide.

Mandatory employee records (kept for 4 years minimum):

• Contract (signed copy)
• Monthly payslips (nóminas)
• Time records (working hours)
• Annual leave taken
• Sick leave certificates
• Performance reviews
• Disciplinary notices

For ex-employees: keep records 4 years post-termination. Failure to maintain can trigger Labour Inspectorate fines (€7,500+ per breach).

Two registrations to close:

1. Hacienda: file Modelo 036/037 with "baja" status
2. Social Security: file baja with TGSS

Then:

• Settle outstanding IVA and IRPF payments
• File final quarterly returns up to the closure date
• File annual returns the following year

Tax obligations continue for 4 years post-closure (audit window). Keep all records. See closing guide.

More complex than autónomo:

1. Board resolution to dissolve
2. Shareholder approval (>50% or higher per articles)
3. Public deed of dissolution before notary
4. Liquidation period: settle debts, collect receivables, distribute remaining assets
5. Public deed of extinction
6. Registro Mercantil deregistration
7. Hacienda deregistration (Modelo 036)
8. Final tax filings

Total: 3–6 months for streamlined cases, 12+ months if complex. Legal + notary fees: €1,500–€4,000.

Options under Spanish insolvency law (Ley Concursal):

• Pre-pack negotiation: agree restructuring with creditors before formal proceedings
• Concurso voluntario: file for creditor protection. Court appoints administrator. Reorganisation or liquidation.
• Concurso necesario: filed by a creditor against you. More aggressive.

If filed within 2 months of insolvency (legal duty for directors): personal liability of directors is limited. Late filing: directors can be personally liable for company debts.

Get legal advice EARLY if you suspect insolvency.

For autónomos: baja temporal in Hacienda + Social Security. Stops cuota but you lose business activity rights. Can re-activate later (some restrictions on tarifa plana availability).

For SLs: cese de actividad while maintaining the entity. The SL remains registered but is dormant. Annual filings still required (zero returns). Useful if you want to preserve the company for future use.

SL annual maintenance cost while dormant: ~€500–€1,000 (filings + Registro Mercantil + accountant).

Two scenarios:

• Asset sale: SL sells specific assets/business to buyer. SL pays corporate tax on gain (25%). Then if proceeds distributed: shareholder dividend tax (19–28%).
• Share sale: shareholders sell their SL shares to buyer. Shareholders pay capital gains tax (19–28% savings rate). SL continues with new owners.

Share sale is usually more tax-efficient for sellers. For high-value sales, structuring matters significantly.

For Spanish SLs selling subsidiaries (5%+ ownership, held 1+ year): 95% of the capital gain is exempt from corporate tax.

This makes Spain attractive for holding company structures. International groups use Spanish ETVE entities to consolidate European subsidiaries.

For individual shareholders selling their SL: no participation exemption — full capital gains tax (19–28% savings scale).

Yes — aportación no dineraria (non-cash contribution).

Process:

1. Form a new SL with you as founder/shareholder
2. Contribute your autónomo business (clients, contracts, IP, equipment) as share capital
3. Deregister as autónomo
4. Continue trading under the SL

Tax: typically tax-neutral under the special regime for business restructuring (subject to conditions on continuity, 5-year holding period, etc.).

Increase share capital (ampliación de capital) with new shares for the incoming co-founder. Or transfer existing shares to them at market price.

Process:

1. Shareholder resolution to increase capital or transfer shares
2. Public deed before notary
3. Registro Mercantil amendment
4. If new capital paid in: bank deposit + new share issue

Cost: ~€600–€1,200 in legal + notary fees. Time: 2–4 weeks.

Yes. Foreign acquirers can purchase Spanish SLs. Process:

• Buyer obtains NIE (and Spanish company if structuring through corporate vehicle)
• Share purchase agreement (SPA) drafted in Spanish
• Share transfer before Spanish notary
• Registro Mercantil update
• Hacienda notification of beneficial ownership change

For foreign-to-foreign transactions: still requires Spanish notarisation. Cost: ~€2,000–€5,000 in legal + notary fees.

For SLs in liquidation:

• Identify ultimate beneficial owners (UBO) of all liquidating distributions
• Document source of distributed funds
• Report large cash distributions (>€10,000) to Hacienda
• If distributing to foreign shareholders: bank documentation of cross-border transfer

For autónomo closure: simpler — close bank accounts, file final returns, archive records.

Generally no — limited liability is the point of an SL. However, directors can be personally liable in specific circumstances:

• Failing to file for insolvency when legally required (2 months from insolvency awareness)
• Breach of fiduciary duties
• Personal guarantees signed (e.g., bank guaranteed by director personally)
• Tax debts caused by director negligence/fraud
• Social Security arrears in specific circumstances

Maintaining proper records and filing on time is your protection. Get legal advice before any major decision.

Employees have strong protections:

• 20 days' severance per year of service (objective dismissal for economic reasons)
• If unfair dismissal claimed: 33 days/year, max 24 months
• Outstanding salary + accumulated holiday pay
• FOGASA (state guarantee fund) covers if company is insolvent

Notify employees with 30 days' notice. Engage labour solicitor for closure with employees — wrongful dismissal lawsuits are common. Often the cheaper path is negotiated settlement.