| Both independent contractors and hiring companies face complex cross border rules if they are located in different countries. Whilst there is a lot of information on the web about companies and their services, there aren’t many places to see the actual questions asked by contractors and remote employers. So we created our ‘Contractor Solutions’ series where Campbell Curtis, the CT Solutions Expert uses his vast experience with international umbrella companies to answer questions. – We’re always happy to jump on a call if that works best for you. – To safeguard our client’s privacy we have removed information like phone numbers, names of people or companies. – We also don’t publish salary rates, net earnings calculations or umbrella company fees. We have experimented with this in the past – it is arguably the most important piece of information when choosing an umbrella company. Unfortunately the calculations are often highly contextual (e.g. they can be influenced by factors like nationality, duration of assignment, region, marital status, industry, etc). So putting figures online could be misleading. Instead we’d rather you get a financial quote tailored to your specific circumstances. – Some of the question and answers might appear repetitive or basic. They are all enquiries we’ve received. We get asked some things a lot – that’s one of the reasons we are putting the questions and answers online. We also deal with a really broad range of contracting experience, from people thinking about their first contract all the way to industry veterans. And on that note if you came to this page because you want a company in Spain that sells Umbrellas (paraguas)… sorry we can’t help you! – Lastly if you don’t what you’re looking for on this page, we’d still love to help – just get in touch. |
Scenarios we cover
- How a UK company can hire and pay an Independent Contractor in Spain
- How a UK citizen can set up as an independent contractor in Spain whilst working remotely for a UK company
- UK tax resident contracting in Spain
- Independent Contractors and Autonomo (Self Employed) Spain: Taxes and Residency for a Polish freelancer moving to Spain
- Remote Work: Working as a contractor in Spain for a client in Italy
- Repatriation: Spanish contractor returning home whilst continuing working for a client in Ireland
- Remote freelancer: Foreign citizen in Spain with Right to Work (RTW) working as a freelancer for Irish company
- Moving from Limited Company to Umbrella Company: Remote contractor needs Umbrella Company to service Irish clients from Spain
- Pros and Cons of Umbrella Contract vs. Global Employment Vendor
- Staying in Spain long term: How to move from a UK Umbrella Company to a permanent solution with a Spanish Umbrella Company
- Foreign company with no Spanish presence hiring EU employee to work remotely in Spain
- Other resources for Contracting in Spain
How a UK company can hire and pay an Independent Contractor in Spain
The first set of questions are from a UK company that has an employee that wants to convert to a contractor in Spain.
| “I have a permanent remote member of staff with a dual UK/Spanish passport. She has been UK based, but is now aiming to return to Spain full time to move back in with her parents. She is requesting that after 182 days of working with her new remote contract, she will be given a new contract and be registered to work legally in the country that she resides in, whether that’s Spain or elsewhere. We don’t want to open an overseas office, or be held liable for overseas tax for one remote employee so would like to know what this would cost to do as an umbrella company worker please.“ |
Campbell: Thank you for reaching out, and I can break this down for you into a simple hiring solution. It is fairly common these days for employees to look for a remote role in a different country, so we face this situation frequently.
Because of her dual nationality, she won’t need to worry about immigration or work permits in Spain, so that removes one typical challenge. She can proceed just like any other Spanish resident once she arrives home.
Now, this is where the value of an umbrella company comes in, so you can hire her as a contractor in Spain. We can do this for you right away. An umbrella company adds an intermediary to your relationship, so you don’t have any compliance worries.
Since she is the one requesting the change, it is possible for you to split the nominal fees charged by the umbrella company.
| “How can a UK employer can support a remote employee in Spain without having to open an overseas office or be liable for overseas tax?“ |
Campbell: I assume that the first 182 days she still wants to be under a remote employment contract, but I don’t recommend that at all. That time period tells me that she may be trying to finesse her tax residency in the UK or Spain (tax residency kicks in after 183 days in Spain).
She might be hoping to avoid Spanish resident tax rates the first six months if the payment comes directly to her from the UK (non-resident rates are lower). But her family/home ties may make her a tax resident already. Either way, that’s not your concern and the umbrella company will advise her on tax residency and rates.
As you point out, you would have to use some type of formal employment entity in Spain for it to be legal. It is better to have her working as a contractor from day one with the umbrella company. This also gives you more oversight than if she is just freelancing in Spain on her own.
There is no reason for your company to start with an employment relationship in Spain, and then convert her to a contractor.
| “After 183 days does my remote employee have to register to work legally in the country that they reside in?“ |
Campbell: If you use our contractor solutions in Spain, we won’t be using the separate 182 day employment contract she requested. She will be working legally right away with the umbrella company.
All she has to do is register for tax withholding and social contributions in Spain, and she may already have a tax id number.
As a Spanish resident, she can do any work she wishes at home. But it would be another story in other countries if she wants to move around. Let’s deal with that later if it comes up.
| “How to have remote workers in Spain without registering an office?“ |
Campbell: Your worker will now be essentially ‘employed’ by our umbrella company, so your company has no duty to register an entity or an office. We handle everything related to payment, administration, compliance and taxation.
To be clear, your company still manages the worker’s remote role, time and production. We have no say in any of that.
| “How can umbrella companies help you have remote employees in Spain without worrying about an overseas office or tax?“ |
Campbell: The worker is no longer your employee while in Spain, and they will have a new contract with you as self-employed. The umbrella company administers payment under that contract.
So, you don’t have to worry about setting up an office or tax withholding. That is now the role of the umbrella company, and your sole obligation is to remit monthly payment. I hope this answers your questions, and we can get started as soon as you are ready!
This scenario is a common one for UK companies hiring remotely in Spain. e.g. we also had this request by phone and email
| “Hi Campbell, Thanks for your time on the phone earlier today. As discussed, details below of the general agreement we are looking to setup. Contractors details: Salary: €25,000 per year Current time spent per week: 37 hours Expected length of engagement/contract: Open ended Would like to engage in the simplest structure to allow the individual to work for our organisation from Spain. The individual is a Spanish Citizen and I expect tax resident so we thought a contractor type arrangement might work best so they can invoice for the time they have spent, we pay the invoice and they are responsible for all of their own tax, social security, pension, expenses etc. Let me know if any further information would be helpful. Kind regards, Head of Operations“ |
Campbell: In this situation because the contractor is already a Spanish resident finding a solution can be quite simple. The contractor can be engaged through a third party platform to minimise liability. These platforms are technologically advanced so that the whole monthly invoicing and payment cycle can be managed online, even from an app on your phone. The engagement terms and contract wording should evaluated to safeguard against misclassification, whilst also providing your organisation with the necessary protections for intellectual property and compliance. This solution allows the contractor to choose how they will structure their own finances (e.g. employed, self employed, autonomo, etc). From the point of view of the UK company, the responsibility for the contractors tax and compliance has passed to the third party platform. It is generally safer and more reliable to pass responsibility to a corporate entity instead of an individual contractor.
How a UK citizen can set up as an independent contractor in Spain whilst working remotely for a UK company
The second set of questions are from a UK citizen who is looking to contract from Spain with a UK company.
| “I am a British citizen and moved to Spain in February 2022. I am hoping to start a contract for a UK company but will be working remotely from Spain. When I moved to Spain I applied for a non-lucrative visa and got my TIE on arrival. I recently reapplied for an extension to the TIE and am waiting for the new card to arrive which allows me to stay for another year until February 2024. In order to be able to take on this contracting role I need some advice and guidance on if I need a work permit/visa & if I need to set up my own company etc. I want the least admin intensive approach for myself in terms of how the job will operate from Spain.“ |
Campbell: Hello and thanks for your questions! I think we can help you with this so you don’t run into any compliance problems. Taking on this contracting role can be done easily by using one of our umbrella companies in Spain, that specialises in supporting foreign contractors.
Your TIE residence card may not be valid if you were not working before. You might have to reapply listing your new work activity. Once we start setting up your service, the Spanish umbrella company can help sort that out.
At that point, the umbrella company can step in as a sponsor for a new work permit. All the rest of our support measures would begin right away as soon as you and the company agree to using our contractor solutions in Spain.
| “How to start a contract for a UK company while working remotely from Spain?” |
Campbell: You would have to have permission to work (visa) and a contract set up with the UK company.
| “How can umbrella companies help British citizens working remotely from Spain?” |
Campbell: Since 2020, British citizens require a work permit in EU countries, and an umbrella company can sponsor that for you in Spain. We also administer all payments and tax withholding for you.
| “Why are umbrella companies the least admin intensive approach for contractors working remotely from Spain?” |
Campbell: Because they have legal entities in Spain that are already set up to administer your contract and payments. All we need is the confirmation from the UK company that they are willing to work through an umbrella company.
| “Can I contract remotely from Spain for a UK company while I am on a non-lucrative visa?” |
Campbell: This would be a question for the legal experts at the umbrella company who can guide you in the right direction under Spanish law.
| “Do I need a TIE to work remotely from Spain?” |
Campbell: The TIE gives you the right to live in Spain, and must also list any work activity you have. You may also need a separate work permit.
| “Do I need to wait for my TIE card to arrive before I can start working remotely in Spain?” |
Campbell: Because you might need a new TIE with your remote work listed, it will depend on the advice of the umbrella company.
| “Do I need to set up my own company to work remotely from Spain?” |
Campbell: No you don’t, and it could add more complexity and delays in starting work. You can always set up a company later and transition if you wish.
| “Where to get advice on doing contract work remotely from Spain?” |
Campbell: Our Spanish umbrella company will be the best source of how to set up your remote work contracts and payments. After all, they do this everyday for thousands of foreign workers in Spain, so their system is in full compliance.
We’ve had a lot of variations on this request for example
| “UK contractor looking to move to Spain, will ultimately become a tax resident in Spain but wish to retain my contract in the UK as the role is 100% remote.” |
Campbell: the answers are very similar to above. As a UK citizen you first need to make sure you’ve got the right visa to be in Spain for the time you want to be there. And when you become a Spanish tax resident you’ll need to register for TIE. A good Umbrella Company can help with all these steps.
UK tax resident contracting in Spain
| “Hi, I’m a UK citizen resident (and tax resident) in Spain. I have been offered a 6 month contract by a UK company but they do not engage with individuals and need to deal with a company. Are you aware of any Spanish umbrella companies who provide a service to enable this type of contract delivery? Many thanks.“ |
Campbell: Congratulations on your contract offer. We can definitely assist you with finding a solution that allows you to work with the UK company from Spain.
Given your situation you can’t take the Autónomo (Self-Employed) route.
Luckily partnering with a Spanish umbrella company can be a seamless way to handle this. They act as an intermediary, allowing you to work for the UK company while they handle all the administrative tasks, including invoicing, payroll, and tax compliance. This setup ensures you can focus on your work without worrying about the legalities. I am happy to recommend 3 reputable Spanish umbrella companies that provide these services to facilitate your contract. Looking forward to assisting you further!
Independent Contractors and Autonomo (Self Employed) Spain: Taxes and Residency for a Polish freelancer moving to Spain
| “I am looking for an umbrella company in Spain. I am a freelancer, I have a residence in Poland, and currently I am employed in Poland with a Polish umbrella company. My purpose is to move my tax residence to Spain. Thanks in advance for any help or advice.“ |
Campbell: Thanks for making contact! We do have umbrella companies in Spain that can help you with this transition. The tax rates are different for non-residents in Spain, but that would only apply to your first six months. Then you would be a tax resident with those applicable rates.
The umbrella company will calculate and withhold all of this for you. Although you are a contractor and self-employed (autonomo) in Spain, you are technically an employee of the umbrella company. Your tax rates will reflect that, as you are used to in Poland.
| “How can I move my tax residence by using an umbrella company in Spain?“ |
Campbell: Tax residency is applied automatically after you meet the criteria, and the umbrella company will let you know of any change in rates and withholding. They specialise in contractors tax solutions in Spain.
| “How can EU freelancers benefit from an umbrella company in Spain?“ |
Campbell: If you are an EU citizen you wont need a work permit in Spain, but there are many other benefits of using an umbrella company. Here are a few:
- Manages all client payments, contractor tax withholding and any social contributions
- Issues the contractor a payslip each month, to a local or foreign account
- Sponsors work permits (if needed)
- Helps set up the contract with the company and contractor
- Moderates any disputes between the company and contractor
- Advises on access to totalization and double taxation treaties
Remote Work: Working as a contractor in Spain for a client in Italy
This enquiry about contracting in Spain comes from a resident wanting to work for a remote client located in Italy.
| “I currently live in Spain but have a remote contract with a company based in Italy. I am looking for an umbrella company in Spain.” |
Campbell: You came to the right place! We have fully vetted Spanish umbrella companies that handle every part of your remote work contract and payments.
Even if you don’t need a Spanish work permit, the umbrella company is a true third party to the remote contract with your client. This solves many of the challenges with working as self-employed in Spain.
| “How do I begin using an umbrella company in Spain for a remote contract with a company based in Italy?” |
Campbell: All you have to do is forward the details of your contract and Italian client, and we will take care of the rest. There is a fee for the umbrella company contractor solutions in Spain, but you can suggest to your client to share the cost. There are huge benefits for both of you! We look forward to working together.
Repatriation: Spanish contractor returning home whilst continuing working for a client in Ireland
| ” Spanish resident is currently using an Irish Umbrella Company but is planning to move back to Spain.” |
Campbell: This is normally a simple process. We can help you pick an Umbrella Company in Spain, you work out when you will move back and then give notice to your Irish Umbrella Company that you’re changing providers. The recruitment agency or client can reissue your contract with the new company details and you start billing through your Spanish Umbrella Company once you’ve moved. Often folks time this move with their contract extension to keep it simple.
Remote freelancer: Foreign citizen in Spain with Right to Work (RTW) working as a freelancer for Irish company
| ” Hello, I’m writing you because I have a job offer for a company in Ireland as a freelancer, but I need an Umbrella Company where they can make the payments, I’m currently located in Spain.“ |
Campbell:
ongratulations on the job offer with the Irish company. We can definitely help you with setting up an umbrella company to handle your payments.
Here’s how partnering with an umbrella company can benefit you:
- Simplified Payments: The umbrella company will manage all your payments from the Irish company, ensuring you get paid on time and in compliance with Spanish regulations.
- Tax and Compliance: They will take care of all the necessary tax filings and compliance requirements, so you don’t have to worry about navigating the complexities of the Spanish and Irish tax systems.
- Administrative Support: From invoicing to payroll management, the umbrella company will handle the administrative tasks, allowing you to focus on your freelance work.
Let’s discuss your specific needs and how we can get everything set up for you. Please let me know a convenient time for a call, and we’ll make sure to connect.
Looking forward to helping you get started!
Moving from Limited Company to Umbrella Company: Remote contractor needs Umbrella Company to service Irish clients from Spain
| “Hello, I would like more information about working abroad, I have been working for my Irish clients from Spain for the past few years via my own limited company and am now looking for umbrella options. Could you give me a call please?” |
Campbell:
Working remotely for your Irish clients from Spain using an umbrella company has some awesome perks like simplified admin and staying compliant with local regulations.
Here are some key benefits of going the umbrella company route:
- Simplified Administration: They handle all the paperwork, tax stuff, and compliance, so you can focus on your work.
- Tax Efficiency: They ensure you’re compliant with both Spanish and Irish tax laws, which can optimize your tax situation.
- Local Support: You’ll have local support for any questions or issues related to your contracting work in Spain.
Looking forward to our next conversation!
Pros and Cons of Umbrella Contract vs. Global Employment Vendor
| “Hi, I am relocating to Spain at the end of this month. I have a full-time job with a company here in Ireland I intend to continue working for this company when I get to Spain. As far as I see it I have two main options work for that company as a contractor through an umbrella contract management company or request that my company employ me as an employee through a Global Employment Vendor. Would you be able to talk me through some of the pros and cons of each of these and how I could use either of these to maximise my earnings. One key question that I have is – Are there laws around only working for a single contract for an extended period of time (Which would be my case) Thanks a lot, IT contractor” |
Campbell:
Thanks for your inquiry! I get that you’re trying to decide between working through an umbrella contract management company or being employed by your company through a Global Employer of Record (EOR). Both have their ups and downs, and I’d be happy to help you figure out which is best for you.
Umbrella Contract Management Company:
Pros:
- Flexibility: You get to work as a contractor, keeping more control over your work and schedule.
- Simplified Administration: They handle invoicing, payroll, taxes, and compliance issues, making things easier for you.
- Local Expertise: They offer local support and ensure you comply with Spanish regulations.
Cons:
- Cost: You might have to pay fees for their services.
- Single Contract Law: In Spain, long-term contractors working for a single client might be deemed employees, affecting your benefits and protections.
Employer of Record (EOR):
Pros:
- Employment Benefits: You might get health insurance, paid leave, and retirement plans.
- Stability: Job security and a stable income come with being an employee.
- Compliance: The EOR ensures full compliance with local labor laws and tax regulations.
Cons:
- Less Flexibility: You might have less control over your schedule and work arrangements.
- Potential Lower Net Income: Employment taxes and benefits might reduce your take-home pay compared to contracting.
- Higher Cost to Employer: Employers usually cover the management fee and additional costs (Social Security and Taxes) on top of your salary.
About the single contract law: In Spain, long-term contractors working for one client might be considered employees, so we’d need to look into this to avoid any misclassification issues. This could affect your contracting status and tax obligations.
I hope this helps!
Staying in Spain long term: How to move from a UK Umbrella Company to a permanent solution with a Spanish Umbrella Company
| “I have an EU passport (Irish) and work remotely in Spain for a UK company via a UK umbrella company. I want to remain in Spain permanently. Can you help with my taxes, payroll etc?“ |
Campbell:
Thanks for reaching out! As you’ve probably realised using a non-Spanish company can only be a temporary solution. Once you become a Spanish tax resident, and especially if you plan to stay in Spain long term, you need to register for and participate in Spanish taxes and social security. As an Irish citizen working remotely in Spain for a UK company, our partner umbrella company in Spain can definitely help with your unique situation involving taxes and payroll. Luckily as an Irish (EU) passport holder, you have the right to work in Spain without a visa. This makes things a lot easier.
We can help match you with the right company to help with:
- Tax and Social Security registration: The Spanish Umbrella Company will guide you through the process of registering for Spanish tax and social security.
- Payroll Management: They will handle your contracts, invoicing, and payroll, ensuring you get paid quickly and accurately each cycle.
- Tax Compliance: Ensuring you meet your tax obligations in Spain, optimizing your tax situation to avoid double taxation. The Spanish Umbrella Company will ensure you pay all relevant taxes and social security contributions. But also that you tax advantage of any concessions which are available to you such as reimbursement of expenses.
- Tax returns: They will provide comprehensive payslips and all reporting needed for your tax returns.
- Ongoing Support: They provide continuous support for any questions or issues related to your contracting work in Spain.
Their goal is to make your life easier by managing these complex tasks so you can focus on your work.
Foreign company with no Spanish presence hiring EU employee to work remotely in Spain
| “Good Afternoon, I tried calling your office today but could not get through. I am looking to engage an umbrella company for an employee we intend to recruit soon in Spain. I need to onboard this employee quickly and would be interested in a quote and discussion. He is an Italian national. We are large construction company with operations in many European countries and the Middle East. We do not have a presence in Spain as yet hence the need for a company such as yourselves to operate payroll etc. I think a call on this would be beneficial as soon as is possible. Thanks“ |
Campbell: Good afternoon! Thanks for reaching out and sorry you had trouble getting through on the phone. We’d be happy to assist with your request.
We can certainly help you onboard your new Italian employee to work remotely in Spain. Using our umbrella company partners in Spain is a great solution for managing payroll and ensuring compliance, especially since you don’t have a presence in Spain yet.
Here’s how we can assist:
- Quick Onboarding: The umbrella company can expedite the onboarding process to get your employee/contractor up and running as soon as possible.
- Payroll Management: Our umbrella company will handle all payroll-related tasks, ensuring timely and accurate payments while complying with Spanish regulations.
- Compliance and Administration: The services cover all aspects of legal and tax compliance, so you won’t have to worry about navigating the complexities of Spanish labour laws.
Let’s schedule a call to discuss this further and provide you with a quote. Please let me know a convenient time for you, and we’ll make sure to connect.
Looking forward to speaking with you soon!
