Is it worth being self-employed in Spain?

Many expats and digital professionals wonder whether it is worth being self-employed in Spain.

When expats, digital nomads and freelancers from other countries arrive in Spain and start talking with locals about their plans to register as autónomo, it is very common to hear negative comments.

Many Spaniards will say things like “being autónomo is not worth it” or even that it is a financial mistake. Hearing these opinions can easily create doubts for someone who is just arriving in the country and trying to understand how things work.

Because of this, many expats start comparing different opinions and asking other foreigners living in Spain about their experiences.

However, the vast majority of expats living in Spain are determined to comply with the law and regularise their activity properly. Even if they initially feel some uncertainty, most eventually realise that in many situations they simply need to register as self-employed from day one.

This is especially true when someone moves to Spain with the intention of establishing themselves here and therefore transfers their centre of economic interest to the country.

Why do many expats choose the autónomo system in Spain?

Although the registration process still involves some administrative steps and technical knowledge, becoming self-employed in Spain has become easier over time.

One important tool that has simplified many procedures is the digital certificate, which allows individuals to interact with Spanish public institutions online. Once installed on your computer, it provides access to a wide range of government services and administrative procedures.

In many cases, once our clients obtain their digital certificate and grant us access, we can complete the autónomo registration within two or three days, depending on our workload.

The autónomo system is the legal framework used by freelancers in Spain and independent professionals to carry out their economic activity.

It is also the simplest legal structure to start an economic activity in Spain. Compared with other legal structures, it is relatively inexpensive and easy to manage.

In many cases, including our own service model, the registration process is included as part of the monthly advisory service and is not charged separately.

The main costs directly associated with being self-employed are taxes and Social Security contributions. Very broadly speaking, new freelancers benefit from a reduced Social Security contribution of around €80 per month during the first year, together with quarterly income tax advance payments of at least 20% of net income.

Another typical cost is the fee paid to a tax advisor. In our case, this is around €70 per month.

Overall, compared with other legal structures, the autónomo system is relatively affordable and offers a high degree of flexibility. For example, it is possible to register or deregister depending on the needs of the activity.

Advantages of being self-employed in Spain

Flexibility to register or deregister when needed

One advantage of the autónomo system is its flexibility.

Some of our clients work only during certain periods of the year. For example, one of our clients mainly stays at home taking care of his children but works as a camera operator during busy film production seasons. During those periods he registers as self-employed and deregisters again when the work ends.

This flexibility can be useful for professionals whose activity is seasonal.

Access to the Spanish public healthcare system

By obtaining a Social Security number and paying monthly contributions, self-employed professionals gain access to the Spanish public healthcare system.

Spain’s healthcare system is widely regarded as one of the best in Europe.

When we manage the registration process for our clients, we also assist them in obtaining their Social Security number as part of the process.

Possibility to invoice international clients

Registering as self-employed in Spain allows professionals to legally invoice clients located abroad.

Most of our clients are expats, digital nomads or freelancers who work remotely with companies based in their home countries, most commonly in other European countries or the United States.

Access to housing rentals and bank financing

In many situations, expats need to demonstrate their income when renting a property or applying for a mortgage.

In Spain this proof of income usually comes from either employment or self-employment through the annual income tax return.

Being registered as autónomo allows professionals to document their activity and income in a way that banks and landlords can recognise.

Disadvantages and challenges

Personal liability

Unlike companies, self-employed professionals are personally responsible for their economic activity.

This means that in case of litigation or claims, they may be liable with their personal assets. For certain activities with higher levels of risk, it may therefore be advisable to consider operating through a company structure instead.

Progressive income tax rates

Income tax for self-employed professionals in Spain is progressive. As income increases, the applicable tax rate also increases.

At higher levels of income, some professionals consider alternative legal structures such as forming a company. However, this must be carefully analysed, because many freelancers and digital professionals may not meet the requirements to operate through a company structure.

Administrative obligations

Self-employed professionals in Spain still face a number of administrative obligations.

For example, many freelancers in Spain — particularly consultants working with international clients — must submit their quarterly tax filings themselves, because no Spanish entity is withholding taxes on their behalf.

Even when services are VAT-exempt because clients are located abroad, freelancers still need to submit informative quarterly VAT returns.

Social Security contributions

Although the first year benefits from a reduced contribution of around €80 per month, from the second year onwards contributions generally increase and can start at around €200 per month depending on income.

For freelancers with modest income levels, this can represent a significant fixed cost.

Quarterly income tax advance payments

Freelancers working with foreign clients must also make quarterly income tax advance payments of at least 20% of their net profit.

For professionals with lower income levels these payments can sometimes create short-term cash flow pressure, even though the final tax burden may be lower once the annual tax return is filed.

Taxes and Social Security contributions in Spain

The two main financial obligations for self-employed professionals in Spain are income tax and Social Security contributions.

Typically, freelancers make quarterly advance payments of at least 20% of their net profit. At the end of the year, the final tax liability is calculated based on total income and progressive tax rates that range approximately from 19% to 47%.

Regarding Social Security, new freelancers benefit from the reduced tarifa plana, paying around €80 per month during the first year.

Real example: freelancer earning €40,000 in Spain

To better understand whether becoming self-employed in Spain makes sense, it helps to look at a real example.

One of our clients is a technology consultant earning around €40,000 per year while working remotely for two or three companies based in Germany.

After deducting common business expenses such as software subscriptions, accounting fees, travel expenses and Social Security contributions, his net profit was approximately €31,000.

During the year he made quarterly income tax advance payments based on this net income. At the end of the year the final tax liability was calculated through the annual tax return.

In many cases similar to this one, the effective tax burden ends up being around 18–20% of the net profit.

When does working as an autónomo make sense?

Registering as self-employed generally makes sense when someone provides services independently to companies or individuals.

The concept of independence is important here because otherwise there may be a risk of being classified as a false self-employed worker.

The autónomo structure is also a good option for professionals who want to start a business with relatively low initial costs and a flexible structure.

Many professionals begin as autónomos and later decide to create a limited company once their activity grows.

If you are considering registering as self-employed and want to understand your tax obligations in more detail, you can also learn more about our self-employed tax and accounting services in Spain.

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FAQs

Do freelancers need to register as autónomo in Spain?

In most cases, professionals who regularly provide services independently must register as self-employed.

How much tax do freelancers pay in Spain?

Taxes depend on income and deductible expenses, but quarterly advance payments of around 20% of net profit are common.

Do freelancers have to pay Social Security as autónomos in Spain?

In most cases, freelancers working from Spain need to register in the RETA (Régimen Especial de Trabajadores Autónomos) and pay monthly Social Security contributions.

By paying these contributions, freelancers gain access to the Spanish public healthcare system (sanidad pública) and other social benefits. This applies equally to foreign professionals who live and work from Spain.

How much is the autónomo monthly fee in Spain?

During the first year, new autónomos benefit from a significant discount known as the tarifa plana. Instead of paying contributions based on income, freelancers usually pay around €80 per month during this initial period.

From the second year onwards, Social Security contributions are calculated based on income levels. In most cases, monthly contributions range from approximately €200 to €600, depending on the freelancer’s declared income.

Can foreigners become autónomos in Spain?

Yes. Foreign professionals who are legally authorised to work in Spain can register as autónomos.

In most cases, the basic requirements include:

• Having a valid NIE or residence permit that allows you to work in Spain

• Having a registered address in Spain

• Registering your activity with the Spanish Tax Agency (Agencia Tributaria)

• Obtaining a Social Security number

• Getting a digital certificate, which allows you to complete most procedures online

When we assist our clients with the registration process, we usually take care of obtaining both the Social Security number and the digital certificate, making the process much easier.