Working in Spain: a contractor’s compliance guide

Contractor Compliance Guide

24th August 2021

With many of the world’s countries closing borders entirely over the past 18 months the world is slowly reopening. That means that many contractors are looking at international opportunities once more. As our own Sales Director, Stefanie Cook, explained “International contractor placements have significantly spiked recently and June was the busiest month for enquiries that we’ve seen in the last 18 months. This demand isn’t just being driven by recruiters that have long tapped into international markets though. In fact, we’re seeing an increase in the number of recruitment businesses that have traditionally been UK focused turning to overseas markets for the first time.”

With these international opportunities comes the complexities of ensuring that you’re compliant. Local employment laws and tax requirements need to be followed not only in your home country but also in your country of work. In the shadow of Covid-19 and with fluctuating travel requirements, this can be tricky.

It’s important to remind everyone, both contractors seeking work internationally for the first time along with veterans of international contracting, that the only way to avoid potential fines or criminal charges is through working compliantly.

No blanket international umbrella solution

Contractors need to be aware that there isn’t a blanket guide for contractor compliance. Each country will have its own requirements and professionals need to take ownership of their compliance. There’s a misconception that contractors can use an ‘internationally viable’ umbrella company solution, but the reality is that there isn’t one that’s compliant.

The other factor to consider is that following the UK’s exit from the EU, any UK national working via UK-based umbrellas will need a work permit to work anywhere in the world.

To help contractors take advantage of the spike in international opportunities we’re outlining some of the legal requirements across the world. France, Germany, Poland, Norway and Spain have all seen an upward trend in opportunities for international contractors, with Spain leading the way. Cook adds “there’s a real geographical trend that we’re seeing, with Spain top of the list once again for contractor management solutions.”

Contractor compliance guide for Spain

In this ‘mini guide’ we take a look at what is needed when working in Spain to help contractors to take full advantage of this spike in demand. There is still a need to stay safe and abide by Covid restrictions as, despite Spain’s tourism minister stating in July that “Spain at this time can be considered a safe destination”, there’s still a fear that the increase of cases linked to the Delta variants may be a cause for concern, so it’s important to stay up-to-date with the latest travel restrictions before you make a move.

When it comes to working in the destination, though, any non-EU professional contractor looking to work in Spain has a number of visa options available, of which two are most viable – the long-term work visa and the EU blue card.

Obtaining one of these will usually require a visit to the Spanish embassy, though in some instances the employer may be able to make the application on behalf of the worker.

Spain has a Shortage Occupation list and anyone who meets the criteria can work in the destination as a highly-skilled employee. While that is a help to get your foot in the (plane) door, a work visa will still need to be applied for through the Ministry of Labour. This process can take up to eight months in some cases so this needs to be factored into any work schedule.

Spanish tax and documentation requirements

Work visa in place, all contractors will need to procure a Numero De Identificacion de Extranjeros or ‘NIE’ (pronounced ‘near’) number to remain compliant while working.

This is the Spanish equivalent of a national insurance number (DNI) for local residents. The NIE number allows you to register with the Spanish authorities to pay taxes during your contract.

If the contract last for more than 90 days, the contractor will also need to sign up for the ‘foreigners register’. This process is separate to the NIE but also necessary to secure your tax residency in Spain.

While not always a formal requirement, it is always prudent to have relevant and robust insurance in place. With freedom of movement once again increasing, the need for appropriate insurance – including health and income protection should a contractor become unable to complete a contract – has amplified.

Be wary of ‘international umbrellas’

Taking advantage of the spike of international opportunities and compliantly working in Spain is possible. All contractors need to be wary of any ‘international umbrella solutions’ as these will not provide a tenable solution to working compliantly in that country. The most effective way to avoid potential fines and penalties and to work compliantly is to look for a location-specific solution.

While the above is a general guide to contractor compliance in Spain and provides a starting point for those looking to work internationally, with a global clampdown on tax avoidance and increased penalties it’s worth getting specific advice relevant to your situation.

To speak with our international experts about your unique challenges, get in touch with us.

This article was adapted from a piece for Contractor UK by Michelle Reilly, CEO of 6CATS International and Founder of 6CATSPRO.


Contact Us