How to become a contractor when you relocate to Spain ?

Freelancing in Spain is part of a larger, global freelance market experiencing significant growth and transformation. Recent statistics illuminate the expansive nature of freelancing worldwide and hint at its dynamics within Spain. Globally, platforms like Upwork facilitate millions of jobs annually, indicating a solid demand for freelance skills across a wide array of professions​​. In Spain specifically, the country has seen a major increase in freelance activity, positioning it among the top 10 fastest-growing countries for freelance work​​. Remarkably, there are 3.2 million freelancers in Spain, evidencing the dynamic and burgeoning nature of its freelance landscape.

The transition towards freelancing in IT and tech not only illustrates the flexibility and autonomy cherished by professionals but also heralds a key evolution in the workforce, with Spain’s tech-savvy freelancers playing a critical role in the economy. As newcomers look to enter the Spanish freelance market, particularly within IT and tech, understanding the dynamics characterized by opportunities for growth and the challenges of securing consistent work becomes essential.

Choosing the right Freelancing path in Spain

In Spain, professionals looking to embark on a freelancing journey have several paths to consider, each with its own set of advantages, regulations, and implications for tax and legal status. Understanding these options is important for making an informed decision that aligns with your career goals, lifestyle preferences, and the duration of your stay in Spain.

Autónomo Status

In Spain, contractors often pursue the autónomo status, which is equivalent to being self-employed or a sole trader. This designation allows for the freedom to serve multiple clients and independently manage one’s workload. Alongside the benefits of flexibility, being an autónomo entails certain obligations, such as registering with the Spanish tax authorities, contributing to social security, and submitting monthly or quarterly VAT and income tax returns. It’s important to note, however, that autónomos are ineligible for benefits under the Beckham Law, a point we will delve into further in the article.

Using a Foreign Company for periods shorter than six months

Contractors planning to stay in Spain for periods shorter than six months, or those who already own a company registered abroad, might prefer to operate through their foreign entity while working in Spain. This approach could smooth out tax-related processes, however, it is important to consult a tax advisor who is proficient in both Spanish and the relevant foreign tax laws. This ensures full compliance with local taxation requirements and maximizes tax efficiency.

It’s important to note that contractors choosing this route are not considered local residents for tax purposes if their stay is under six months. Consequently, they may face challenges in accessing local services typically available to residents, such as social security benefits. Moreover, these contractors might encounter difficulties in opening bank accounts, renting apartments, and integrating into the local community due to their non-resident status. Such limitations underscore the importance of thorough planning and professional advice before undertaking contractual work in Spain.

Hightekers simplifies this by guiding the selection and setup process, handling legal and tax formalities, and providing ongoing compliance support, making the transition smoother and allowing freelancers to focus on their business growth.

Being a Contractor in Spain with a managing company

Operating as a contractor in Spain involves understanding the complex legal and tax regulations, a task that can be daunting, especially for those from abroad. Hightekers, a managing company, specializes in providing concise solutions for contractors, ensuring compliance with local laws and tax obligations. 

By acting as an intermediary, Hightekers helps IT contractors manage administrative tasks, from tax filings to legal paperwork, thus allowing them to focus on their professional projects. This service is particularly beneficial for contractors looking to optimize their tax efficiency and ensure compliance without the hassle of dealing with bureaucratic processes directly. Moreover, Hightekers offers guidance on local practices and can assist in overcoming common obstacles such as opening bank accounts or securing accommodation, making the transition to working in Spain smoother and more manageable.

Facilitating your transition: How Hightekers simplifies the Beckham Law process

The Beckham Law, named after the famous footballer David Beckham who was among the first to benefit from it, is a Spanish tax regulation designed for employees working in Spain. It offers a significant tax advantage for foreign workers who relocate to Spain for employment purposes. Here’s a concise overview of its benefits:

Fixed Income Tax Rate: Eligible individuals can opt to be taxed at a flat rate of 24% on their income up to €600,000, rather than the progressive tax rates that can go up to 47% for residents. This is considerably lower for high earners compared to the standard income tax rates for Spanish residents.

Exemption on Worldwide Income: Under the Beckham Law, expatriates are taxed only on their Spanish-sourced income. This means income from outside of Spain is not subject to Spanish income tax, which can lead to significant tax savings for individuals with investments or business activities abroad.

Duration of the Benefit: The tax benefits under the Beckham Law can be applied for up to 6 years, including the year of relocation and the following five years.

Hightekers play a key role in simplifying the complexities of the Beckham Law for contractors relocating to Spain by offering local contracts. This approach allows contractors to attain employee status, thereby qualifying for the Beckham Law’s benefits. They offer comprehensive guidance on determining eligibility, navigating the application process, and maximizing tax advantages, while ensuring adherence to Spanish tax regulations. Consulting with Hightekers not only helps expatriates to fully capitalize on the Beckham Law’s provisions but also facilitates a more seamless transition to working in Spain.

So, if you’ve been in Spain for less than six months, you have the opportunity to work as a contractor and benefit from the Beckham Law. This advantageous tax regulation can still be accessible to you with the support of Hightekers, even if you’re already residing in Spain. Hightekers’ services can streamline the process, ensuring you’re able to take full advantage of the Beckham Law’s provisions efficiently. This setup is ideal for those seeking to optimize their tax situation while working in Spain, providing a clear pathway to benefit from reduced tax rates under this law, which is designed to attract and retain international talent by offering favorable tax conditions.

Step-by-Step Guide to Achieving Freelancer Status in Spain

Moving to Spain as a contractor and choosing the autónomo status requires independently tackling a series of administrative tasks. Initially, obtaining an NIE (Número de Identificación de Extranjero) is crucial as this identification number is essential for all financial and legal activities in the country. Following that, registration with the Spanish Social Security System is necessary to contribute to and benefit from services like healthcare and pensions. Moreover, compliance with tax obligations, including VAT and income tax, through registration with the Spanish Tax Agency (Agencia Tributaria) is indispensable. This entire process, which demands a thorough understanding of the Spanish legal and tax systems, can be complex and time-consuming.

For contractors eager to avoid the complexities of establishing themselves as an autónomo in Spain, Hightekers offers a concise alternative. With comprehensive registration support, Hightekers handles all the necessary procedures, including obtaining the NIE, enrolling clients in the Spanish Social Security system, and managing their tax registrations. 

Our service effectively removes the bureaucratic burden, allowing freelancers to focus fully on their professional activities. By taking over these administrative tasks, Hightekers not only simplifies and accelerates the transition to freelancing in Spain but also ensures that all legal and tax obligations are met efficiently and correctly, offering contractors peace of mind. This clear delineation of the two distinct paths enables contractors to make an informed decision on whether to navigate the process independently or to seek the assistance of Hightekers for a smoother transition to working as freelancers in Spain.

Streamline your freelancing business in Spain with Hightekers

To begin a career as a contractor in Spain, there are several personal and professional requirements that one must meet. From a personal standpoint, obtaining legal residency in Spain is crucial, which involves securing the NIE (Foreigner Identification Number) for financial and legal transactions. This is especially important for non-EU nationals who plan to live and work in Spain.

Spain is known for its dynamic ambience, particularly appealing for those in the IT and tech industries. With its favorable atmosphere, rich culture, and the potential for a balanced lifestyle, Spain is an attractive destination for freelancers seeking new opportunities. However, going through the bureaucratic and administrative processes can be challenging, especially for those new to the country or freelancing.

This is where Hightekers comes into play. With Hightekers’ comprehensive support, freelancers can easily overcome the administrative hurdles of setting up and managing their freelancing business in Spain. From handling legal registrations to advising on tax obligations, Hightekers ensures that freelancers can focus on what they do best, delivering exceptional services to their clients. 

Whether you’re considering moving to Spain for freelancing or looking to optimize your current freelancing setup, exploring the opportunities with Hightekers’ backing can provide a solid foundation for success. 

Discover the benefits of a managing company for freelancers