Legal information for businesses in Spain

If you are an EU citizen, you can work and start a business in Spain under the same conditions as the Spaniards, since January 1, 1992.

You still need to get the ‘tarjeta comunitaria’, the ‘community card’, which is a work and residence document. The fees for this card range from €150 to € 00 and it is € 180 for starting your own business.

EU Workers and right to employment

When you are an EU worker, Spain cannot refuse a residence or work permit to any of your family members, even if they are non-EU. All of these rights are specified in EU Regulation 1612/68.

Employees require a work permit called ‘cuenta ajena’, which means ‘on another person’s account’. Those starting on a self-employed basis need another sort of permit, called ‘autonomo’, or ‘cuenta propia’, ‘on your own account’. If you work on a freelance basis, being autonomo allows you to bill companies with proper invoices that include IVA (tax).

It is best to use a ‘gestoria’ or a lawyer to do all the paperwork. This will cost you some more money, but it is worth it, especially when starting a business.

If your Spanish is reasonable, you can do it yourself. Obtain the forms from your local police station or ‘Delegacion de Trabajo’, fill them out and wait to see what happens. All in all the costs are quite high, as you have to pay your first month to the social security, tax and the IAE, (Impuesto de Actividades Economicas) or business license.

When you employ other people you will have to put them into the social security system and pay them at least the minimum wages (salario minimo interprofesional). The law also stipulates a 40-hour working week.

National and local holidays – Fiestas / Festivals in Spain

In most of Spain, it is generally accepted that Spanish staff will take the day off when it comes to national or local holidays, and there are a lot of them.

There are a lot of rules in regards to contracts, time off, extra payments, etc. It is best to ask your accountant to look into all these matters prior to employing somebody, as you could get fined by the government, or taken to court by a former employee because he has been working under an indefinite contract (contrato indefenido).

The extra payments are a curious worker/employer type agreement and serve to guarantee a bonus for the employee for a year worked. Many Spanish workers expect this to be agreed at the interview stage. It can be 13 or 14 months salary for each year worked. i.e. 1 or 2-month bonus. It’s probably wise to link this with performance. In Spain, you find that at 6.00pm on the dot (or whatever time the employee is supposed to finish) he/she will disappear from the office. Overtime in Spain is generally not popular.

Try to remember that employees are very well protected in Spain and Employee / Employer tribunals are common.

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