Capital
Madrid Currency
Euro (EUR, €) Languages
Spanish Payroll Frequency
N/AGDP per Capita
$1.45 trillion Employer Tax
N/A Employer Of Record In Spain
Learn how your company’s development into Spain may be revolutionised by our cutting-edge Employer Of Record (EOR) solutions. Reject the trouble of setting up a subsidiary and choose a simplified, digital strategy instead. Spain’s highly trained population, which is willing to cooperate with foreign firms, offers enormous opportunity for collaboration as its GDP continues to grow and places it among the top 15 global economies.
Working with us, a seasoned member in the Spanish market, ensures that your firm will grow successfully and smoothly south of the Mediterranean Sea. You gain a competitive edge from using our state-of-the-art platform that separates you from your competitors. Utilising our cutting-edge facilities and vast worldwide network, you have simple access to the best talent Spain has to offer.
Leave it to us to manage the challenging aspects of hiring, contracting, payroll administration, and adherence to the complicated Spanish labour rules. You may put all of your attention on starting and growing your firm while we take care of these crucial issues. Maximise your potential and take advantage of all the chances Spain has to offer.
Visit our website right now to learn more about all of our services and find the keys to success.
Overview of Spain
- Population: 47.43 million (2020)
- Currency: Euro (EUR, €)
- Capital city: Madrid
- Languages spoken: Spanish
- GDP: $1.45 trillion
Employment Landscape In Spain
Spain’s labour laws substantially safeguard the country’s labour market and offer local workers significant priority, making it infamously difficult to get employment there as it is in most other EU countries. Due to the numerous legal requirements in Spain, the compliance burden has always been high and time-consuming for companies. However, the recent economic turmoil has compelled Spain’s judiciary to adopt more flexible employment regulations and step up labour law changes.
| Title | Explanation |
|---|---|
| Statutory Working Hours | 40 hours per week |
| Mid-Day Break (Siesta) | A usual lunch break of one to two hours. Many businesses now provide employees one to one and a half hours to eat at the dining areas, restaurants, or offices. |
| Overtime Eligibility | A worker may put in a maximum of 80 hours of overtime per year. This excludes working overtime to make up for lost sleep and working to prevent or repair immediate harm. |
| Paid Public Holidays | 14 public holidays annually, out of which 2 are local. National holidays include
Any public holiday due on a Sunday is transferred to the coming Monday. |
| Holiday Pay | Employees are entitled to a minimum of 30 days of paid vacation, in addition to the 14 public holidays. |
| Medical Leave | The minimum guaranteed percentage of pay in the event of an illness or accident is determined by the government. A company may be required to pay the additional dues under the collective agreements. |
| Maternity Leave and Paternity Leave | Mothers are entitled to 16 weeks of leave, of which the first 6 must be used immediately following childbirth. The mother’s social security is provided a direct contribution from the pay during this time, but only up to a certain amount. Companies have the option of making extra payments. Fathers will be eligible to 16 weeks of paid paternity leave starting in 2021. The first six weeks of paternity leave must be taken as soon as the baby is born, just as maternity leave. |
| Disclosure and Confidentiality Of Personal Information | The Organic Law 15/1999 of December 13 on the Protection of Personal Data governs labour relations in Spain. |
| Anti-Discrimination Law | Employers are not allowed to treat workers unfairly based on their gender, race, ethnicity, religion, marital status, sexual orientation, political affiliation, union membership, socioeconomic class, or language. |
Contractors Vs. Full-Time Employees
The goal of Spain’s labour laws is to guarantee that employers and employees have solid agreements. Fixed-term contracts and indefinite contracts (permanent) are the two choices when it comes to employment contracts.
Fixed-term agreements have a defined length, usually between six months and a year. They are a useful tool for businesses wishing to evaluate the performance of new hires before committing permanently. The fact that a fixed-term contract does not require a notice period before termination is advantageous for employers.
There are restrictions on the use of subsequent fixed-term contracts for the same employment post, it’s crucial to remember that. Employers are not permitted to offer a person more than two consecutive fixed-term contracts for the same position, under rules. Within a 30-month term, each contract can last a maximum of 12 months. When this amount is reached, the worker immediately becomes full-time and must be given an indefinite contract.
These clauses make sure that workers are not forced to work for extended periods of time in temporary positions without the security of a permanent job. The rules seek a compromise between giving companies latitude in how they assess new workers and defending the rights and consistency of the workforce.
Employers may confidently negotiate the Spanish labour market and promote a pleasant and long-lasting working environment by being aware of and abiding by these labour rules.
Recruiting In Spain
Spain’s government carefully regulates the employment process to guarantee the preservation of workers’ rights. The system can be complicated since it bases job classifications on a set of rules known as collective agreements. Employers and workers can use these agreements as a platform to discuss and set the terms and circumstances of employment, addressing issues including job legality, working conditions, and obligation fulfilment. Normally, they are extended annually.
Online employment boards like InfoJobs and LinkedIn are often used by employers to find suitable applicants. While InfoJobs focuses mainly on the European Union region, LinkedIn is utilised all throughout the world. There are various benefits to utilising these platforms including social media advertising. By using several sources, employers may access a varied pool of candidates and reduce the chance that they won’t locate the proper talent.
However, managing human resources is a difficult and time-consuming task, especially in a country with a highly regulated labour market like Spain. To prevent possible hazards, organisations need to be aware of compliance obligations. As a result, it is strongly advised that you obtain expert advice when navigating the Spanish employment process.
We provide complete virtual HR administration services that guarantee compliance with regional Spanish regulations as your dependable Employer Of Record. You can focus on important duties like growing your company, running operations, and leading marketing activities while our skilled staff will handle every step of the process, from hiring and onboarding to continuing personnel management. Learn how our services may make your HR obligations simpler and help your organisation grow. Discover more right now.
Probation And Termination
In Spain, the duration of the probationary period is typically determined by the Collective Agreement applicable to a particular job profile. However, in cases where there is no Collective Agreement in place, specific guidelines regulate the maximum length of the probation period.
For undergraduates and junior college specialists, the probation period cannot exceed 6 months. This duration allows employers to evaluate the performance and suitability of these entry-level employees.
For all other positions, the probationary period is limited to a maximum of 2 months. This shorter timeframe applies to employees with higher qualifications or experience.
It’s important to note that different types of contracts, such as permanent contracts, training contracts, and special employment contracts, may have their own designated probationary periods specified within their respective regulations.
By understanding and adhering to these guidelines, employers in Spain can effectively manage the probationary period for their employees, providing an opportunity to assess their suitability for the role while complying with the legal requirements.
Resignation: Depending on the Collective Agreement, employees are required to give a minimum of two to three weeks’ notice.
Termination of Employment: The company is required to offer 15 days’ notice if a dismissal is being made because of financial, organizational, or operational problems. In such a situation, indemnity will be equal to 20 days of gross pay for each year of service. No warning or compensation is required in the event of a dismissal for disciplinary reasons. Firms typically owe 33 days of gross compensation for each year of service, with a ceiling of 24 months and no advance warning, for any other reasons.
EOR Solution
Working with an Employer Of Record (EOR) is the best course of action for navigating the complexity of the Spanish labour market. You may simplify your entry into Spain and experience long-term cost benefits by utilising our knowledge. You may save time, money, and administrative work by forgoing the requirement to set up a subsidiary on the Spanish mainland with the help of our remote and virtual HR platform.
The guarantee of compliance and the elimination of legal obstacles are two important advantages of outsourcing employment through an EOR in Spain. Our team of qualified experts makes sure that your firm always complies with applicable Spanish regulations, freeing you to concentrate on your core business activities without worrying about complex legal requirements.
Working with an expert EOR also gives you access to employment contracts that are specifically tailored to your needs. We offer you a number of extra benefits that help ensure a smooth hiring process, whether you need to quickly modify current agreements or simply e-sign papers.
You may use their knowledge and resources and take advantage of their experience in handling the complexities of the Spanish labour market by delegating your HR requirements to a reliable EOR. Your ability to confidently and easily negotiate the challenges of finding a job in Spain is enhanced by this strategic cooperation.
Discover the advantages of collaborating with a dependable EOR and open up new business prospects in Spain. Learn how our specialised solutions can optimise your growth strategies and advance your business in the Spanish market. Call us right away to find out more.
Types Of Visas In Spain
| Golden Visa (or Investor Visa) | Foreign nationals without a permanent address who have invested a substantial sum of money in Spain may apply for this visa. The aforementioned investment may consist of
The aforementioned investment may be in Spanish public debt instruments worth €2 million.
|
| Entrepreneur Visa | This visa is intended for business people whose inventions Spain deems to be of particular economic interest. The company strategy, applicant profile, and possible financial gain from such innovation are all examined by the government. |
| Highly Qualified Visa | This visa is intended for highly qualified individuals who have been engaged by Spanish organisations in executive roles as managers or other technical specialists. Their annual pay should typically be greater than €50,000. |
| Visa For Temporary Residency and Research Work | This visa is intended exclusively for international visitors coming to Spain for R&D or those seeking to innovate in both public and commercial companies. |
| Intra-Company Transfer Visa | This visa is for international workers who have been transported to Spanish territory as part of a professional relationship or for training and who work for a multinational corporation with its headquarters in Spain. |
| Self-Employed Work Visa | Foreign nationals who want to start or buy a new business in Spain or who work as independent contractors or freelancers are eligible for this type of visa. Within one month after their arrival in Spain, these foreign nationals must apply for a residence permit. They can apply for permanent residency after five years in a row of holding the residence permit. |
| Frontier Worker’s Permit | This is a unique permit card given to workers or independent contractors who live on the border in a neighbouring state and commute there every day. This visa can be extended for a further three months to a year. |
| Seasonal Work Permit | This is a one-time-use-only visa that cannot be transferred. It is issued for transitory or seasonal activity in Spain. It is valid for nine months out of the year. |
| Cross-Border Work Permit | This authorization enables non-EU foreign workers to work for a Spanish employer’s customer or a Spanish subsidiary of a foreign company. It has a one-year expiration date and a one-year extension option. |
| Blue Card Work Permit | Only EU blue card holders who have resided in another EU nation for at least 18 months are eligible for this permission. These authorizations are often granted to highly qualified workers with documented higher education or those with at least five years of professional experience. The foreign national may then apply for permanent residency after having a blue card work permit for one year and two more renewals. A person with a Blue Card is permitted to: live and work in Spain; travel freely within the EU for up to 90 days on business; and. |
Work Permit
Spain’s work visa application process is drawn out and meticulous. As a result, recruiting domestic workers is preferred over hiring international workers. This is mostly a result of the Spanish government’s restrictive policies, which were implemented in an effort to combat the nation’s high unemployment rate. However, due to a global pandemic and their recent economic collapse, the government has progressively loosened its immigration regulations.
We offer a wide range of regional partners in Spain that can help with the administration of work and residency permits for visitors to the nation. All the necessary laws and requirements pertaining to local employment are taken care of by our company. You may assess the performance and operations of your remote staff on our virtual, completely automated HR platform from any location in the world.
| Work Permits | Explanation |
|---|---|
| Can we sponsor a Work Permit In Spain? | Yes |
| Processing Time | typically 4-6 months, however it might take up to 8 months. |
| Work Permit Process | Step 1: With the necessary documentation, the Spanish company requests a proper work permit for the foreign employee at the Immigration Office.
Step 2: If successful, the foreign worker has one month to submit the necessary paperwork for a suitable work visa in Spain. Step 3: After success, the worker has 30 days to claim it. Step 4: The worker registers with the Spanish social security office. |
| Passport Submission | When making an application, a copy of the passport is given to the immigration office. |
| Work Permit Validity | Usually for a period of one year, with a possible extension of up to two years. |
| Work Permit Process For Different Countries | The procedure is comparable in the majority of nations. A work permit is not required for EU nationals |
| Change Of Sponsor Within Spain | If the holder has a new contract, the visa may be renewed. |
| Where Is The Application Processed? | At the Spanish Consulate of the country where the applicant resides. |
| Work Permit Restrictions | The foreign applicant must meet the following requirements in order to be granted a work permit:
In addition to this, the unemployment rate in Spain has a significant impact on choices. |
| When Can Employee Travel To Spain | The candidate is required to relocate to Spain within three months after acquiring their authorization. |
| What is The Cost of a Work Permit? | The average cost of a work permit for foreigners working in Spain ranges from €62 to €176. |
| Duration Of Work Permit Processing | 1 week – 4 months |
| Can Spouses Work On Dependent Visas? | Spouses have to apply jointly or individually for work permits. |
Payroll And Taxes In Spain
It may be extremely difficult for businesses entering Spain to manage the complexity of the Spanish taxes system. Compliance with different income taxes, social security, compensation, VAT, and other issues related to enterprises and permanent establishments are among the biggest obstacles.
In Spain, there are two ways to handle your payroll and taxes. You may either assemble your own team or enlist the help of seasoned experts who can systematise your complete payroll management and have a vast network of partners on-field.
Payroll Details
| Title | Explanation |
|---|---|
| Remote Payroll | This payroll is applicable to non-resident businesses that have been working with an Employee Of Record or a Professional Employer Organization and have either local or international employees. |
| Local Payroll Administration | This payroll is for businesses that have a Spanish business registration but would want to outsource their payroll administration to a payroll service. In this case, the business is still the employee’s employer of record and is responsible for adhering to all applicable laws on compliance, immigration, health benefits, and taxes. |
| Internal Payroll | Large organisations that want to manage payroll for all domestic and international employees must use the internal payroll. However, before employing any personnel, such organisations must incorporate in Spain. |
Employer Taxation
| Title | Explanation |
|---|---|
| Corporate Income Tax | The current corporate income tax rate is 25%. |
| Payroll Tax | Currently, there is no payroll tax applicable in Spain. |
| Employers’ Social Security and Statutory Contributions | Spain has a 31.4% employer social security contribution rate. Additionally, they are subject to a variable premium for accidents that occur on company property. Additionally, self-employed individuals under the age of 50 who have made contributions to other social security systems for more than five years are given particular consideration under the state’s social security system. |
| WHT | The WHT is now 24% for non-EU citizens and 19% for citizens of EU/EEA areas. Dividends, interest, management fees, and royalties are all subject to this tax. |
| Reimbursements | Employees in Spain must provide their employers with receipts and expense reports in order to be reimbursed for their expenses. |
Employee Taxation
| Title | Explanation |
|---|---|
| Income Tax Rate | Tax Rate (%) |
| Up To €12450 | 19 |
| €12450-20200 | 24 |
| €202000-35200 | 30 |
| €35200-60000 | 37 |
| € 60,000 to 300,000 | 45 |
| € 300,000 and above | 47 |
Sales TaxSpain currently has a 21% value-added tax (VAT) rate. It applies to individuals or businesses that provide taxable products and services within the nation. Employees’ Social Security and Statutory Contributions
The present employees currently pay 6.35% of their salaries and earnings toward social security. However, if the conditions listed below are satisfied, certain individuals may be excluded from this contribution:
- A social security agreement between Spain and their native nation permits exemption.
- The individual is residing in Spain for a brief amount of time (often less than five years), has a working relationship with their employer in their home country, and has been making the necessary social security contributions to the authorities in their home country.
Public PensionSpain offers a compulsory state pension program as well as optional choices for businesses and people.Medical InsuranceThe social security program of Spain’s government provides coverage for medical insurance. Everyone who works and lives in the nation has access to its free public healthcare system.Other TaxesSpain also collects taxes on real estate, the building industry, and the erection and installation of projects. The rising value of urban land is likewise subject to tax.
Bonuses
The law grants employees two statutory special bonuses each year. One bonus is paid in the month of December, while the other is paid in a month determined by a collective bargaining agreement, the company, and the employee representative.
The bonus amount is often determined through collective bargaining, although it cannot be less than the employee’s base monthly income. 12 prorated payments are another option for paying this.
Our EOR Solution Simplifies the Establishment of a Spanish Subsidiary Process.
There are eight important stages that must be taken into consideration while establishing a corporate subsidiary in Spain. The procedures entail obtaining a tax identification number for foreign investors, registering with Spain’s Commercial Registry, opening a corporate bank account, notarizing business documents through a Spanish notary, completing Form D1-A, submitting the form to the Directorate-General for Trade and Investments, paying transfer tax and stamp duties, and finally registering the subsidiary with the appropriate agencies, such as the social security and tax departments, while obtaining a tax identification number.
It is essential to take into account a number of criteria before starting the process of establishing your business in Spain. First off, local companies with foreign owners and non-resident subsidiaries in Spain may be asked by the Directorate-General for Trade and Investments (DGCI) to provide an annual report and any other necessary information on the status of their foreign holdings. Second, various areas of Spain may have varied rules, costs, and human resource availability. To guarantee a successful setup, it’s critical to analyse the precise location. While Spanish is commonly spoken, some areas may have their own local tongues, such as Catalan, which may be more common.
Making use of our Employer Of Record (EOR) service would greatly streamline the process of establishing a Spanish subsidiary. As your local partner, we have a thorough grasp of Spain’s intricate employment laws and can make sure that your subsidiary complies with all applicable legislation. We can help you with a number of things, including creating employment contracts with your staff and expediting the Commercial Registry registration procedure.
You may easily manage the complexities of the Spanish business environment with the help of our experience and knowledge, allowing you to concentrate on your main business while assuring compliance and a seamless setup of your subsidiary.
Get in touch with us right away to find out more about how our EOR solution can streamline and hasten the establishment of your company’s Spanish subsidiary.
