It’s not just since the pandemic that it has been possible for employees in the EU to work for a company based abroad. In many areas of work where decentralised online software is used for administrative activities, for example, it doesn’t matter where the desk of the person doing the job is located. Through online communication systems, like Zoom and Skype, impromptu meetings, presentations, communication with customers and information exchange can be carried out very effectively. Recent studies have even shown that employees working from home (WFH) abroad are more productive, which may be due to the view of the sea from their work desk or their morning walk along the beach being very motivational.
De Micco & Friends support employers and employees with the tax and legal employment aspects of setting up a working-from-home arrangement in Spain. Our law office can take care of employer and employee registration, tax declarations and social security contributions, as well as communication with the authorities. Neither the employer nor employees will need a knowledge of Spanish. Our law office can also act as the fiscal address and contact point for the financial and social security authorities.
I. Requirements, Registration Process
1. Employer
Spanish Tax ID number (NIF)
A foreign employer who has employees working in Spain does not have to open a Spanish company for this, but the employer must register with the Spanish social insurance and the tax authority. For this, the employer needs a Spanish tax ID number, the NIF. The employer will subsequently receive a Spanish Social security number and will be registered with the Spanish department of employment, the TGSS.
The following documents are required to apply for an NIF:
- A certified copy of your company’s Memorandum of Association
- A certified copy of the latest commercial register, showing the current authorised managing director(s) / board of directors / management board
- In the case of a change of managing director(s): a certified copy of the corporate resolution
- Certified copies of the passport / ID card of the authorised managing director(s) / board of directors / management board who will be applying for an NIF
- A notarised copy of the power of representation (we will send this to you ready for signature in two languages, with full information)
- A NIF application form, which we will likewise send to you with full information, for signature
- A NIE (Spanish ID number for individuals) of the current managing director(s) / board of directors / management board listed in the commercial register. A NIE is also required from managing directors not giving power of representation, if they are listed in the commercial register. If you do not yet have a NIE, please apply for this via our website as soon as possible here.
The application process for a NIF takes approx. 4-6 weeks once the complete certified documents have been delivered. Once the NIF is available, the foreign company can be registered with the tax and social security authorities by means of a digital certificate. You can order your NIF here.
Power of representation
in order to represent your company in your application process and in all matters relating to employment law in the future, a notarial power of attorney is required. This can be arranged in the employer’s home country by the management of the foreign company (employer). We will send you the power of attorney to be signed, which must be provided with an apostille, in two languages.
Digital certificate
After the NIF has been issued, we apply for a digital certificate, which is used to communicate with the tax and social security authorities. In the course of this, our law office is named as the tax representative of the foreign employer. Our law firm becomes the mailing address and mail is forwarded to you by email.
Employment contract and employment law
In the case of employees working from home in Spain, the employer concludes an employment contract under Spanish law with the employee. In this, provisions such as the Spanish minimum wage, tariffs, severance arrangements and notice periods for termination apply. In the case of employment law disputes, we represent our client, i.e. the employer, exclusively. In contrast to other countries, the employment contract follows a specific format. We can draw up an employment contract for you in two languages, on request.
For legal representation of the employer in disputes relating to employment law, we offer a fixed fee, which is agreed on a case by case basis. Disputes relating to employment law are generally dealt with initially by an arbitration board. If this one-off meeting between the employer and the employee before the arbitration board does not lead to a resolution, the parties may institute proceedings in an employment tribunal.
Probationary period
In Spain, the minimum probationary period is determined by the underlying collective agreements used. Unlike in Germany, the collective agreements for each sector are binding (in contrast to Germany, where the collective agreements are only used in the case of trade union membership).
Termination of employment options and severance pay
In Spain, the period of notice is generally 15 days. This is adhered to, unless a longer period of notice is specified in a collective agreement. These periods of notice do not apply in the case of extraordinary termination.
Accounting, payment of levies
In Spain, social security contributions and payroll tax can only be paid from a Spanish bank account. We will be happy to assist you in opening a bank account. If the employer does not have a bank account of their own in Spain, we can undertake the payments via our escrow account and send a corresponding invoice on a monthly basis for payment by bank transfer. We carry out payroll accounting across all business transactions. The results and analyses are sent to you on a quarterly basis.
Payroll accounting
The payslips are produced monthly according to the data sent to us by the employer. Changes must be notified before the 15th of the respective month. Payroll accounting is delivered to the employer in the final week of the relevant month. Wages/salaries must be in the employee’s account by the third working day of the following month.
Illness, holiday
The employee undertakes to notify the employer immediately of an incapacity for work. The employee must present themselves on the first day of absence due to illness at the IB Salut health service and either obtain a certificate of a doctor’s visit (in the case of the doctor diagnosing an easily treatable illness) or present a sick note (on the fourth day at the latest).
Our advisors will be happy to answer any questions you might have about employment regulations in Spain.
Our communication with the employer and employees
In general, we use email, telephone, Skype and Zoom as the methods of communication with our clients. We only communicate with employees in exceptional circumstances, such as personal tax issues. By setting these limits for our communication with our clients, we can ensure compliance with data protection regulations and avoid misunderstandings. We also carry out pay negotiations only when expressly commissioned to do so by the employer.
Establishing a Spanish company
If, as an employer, you should decide to set up an operational branch in Spain, we can support you in establishing your Spanish company (GmbH or AG). As an alternative to a bricks-and-mortar branch, we also offer our virtual office option, which you can use as your registered office – an option which can be very useful in the initial stages. We will be glad to advise you on all tax-related issues and the Spanish company structure.
Term of our mandate
The mandate for payroll accounting or tax consultancy may be terminated by notifying our law office at any time up to the end of the respective quarter.
2. Employees
Employees working in Spain initially require a NIE (a foreigner ID number). It should be noted that the application process can take up to 4 weeks from the presentation of the complete set of documents. Furthermore, employees must have a Spanish social security number (NAF). With these two items, a Spanish employment contract can be concluded and submitted to the social security authorities and the employment office.
An employee from a European country can register before taking up fiscal residence, as long as the NIE is available. However, the employee should apply for residency in Spain within 3 months at the latest. We can also provide support to your employees in this process. The income tax return or the annual adjustment of income tax for employees resident in Spain is completed in June of the subsequent year (the Modelo 100 tax return). We can complete these, at the employee’s request, for a flat-rate fee (payable by the employee).
II.) Services at a glance
We offer the following services to employers and employees for the process of setting up a working-from-home (WFN) arrangement.
- Establishment, setting up
- Application for a NIE (registration and tax ID number for corporate bodies of foreign companies)
- Application for a NIF (tax ID number for employers)
- Registration of foreign employers with the tax and social security authorities
- Representation of the employer in fiscal and social security matters with the authorities
- Fiscal address for foreign employers in our law offices in Spain
- Payroll accounting, administration and representation
- Registration and de-registration of employees, employment contracts, termination
- Monthly payroll accounting, provision of statements with all data to the employer and, if required, payment of social security contributions through our escrow account (see above)
- Receipt and administration of all correspondence from Spanish authorities by our law office, and representation with the social security and tax offices
- Quarterly submission of tax returns (Model 111 tax returns) for the payment of employee tax, as well as the annual return (Model 190 tax return) and on-time payment through our escrow account, on request
- Administration and forwarding of sick notes to the Spanish social security, and direct contact with the employee.
- Determining and payment of tax and social security payments
- Legal advice and representation of the employer before arbitration boards and employment tribunals.
III.) Fees
Services |
Fees EU |
Fees Non-EU |
Setting up a working-from-home (WFN) arrangement |
||
NIF application - employer |
890.00 |
990.00 |
NIE application - managing director, employer, employee |
249.00 |
395.00 |
Employer registration with authorities (alta) |
300.00 |
600.00 |
Running costs |
||
Registration of employee, employment contract |
150.00 |
300.00 |
Monthly employee payroll |
50.00 |
90.00 |
Quarterly return |
300.00 |
300.00 |
Employee termination, cancellation, de-registration |
300.00 |
300.00 |
Other Services - optional |
||
Establishment of Spanish GmbH company (SL), attendance of shareholders |
1,500.00 |
2,900.00 |
Establishment of Spanish GmbH company (SL) using power of attorney |
2,900.00 |
3,900.00 |
Spanish shelf GmbH company (SL) |
From 4,900.00 |
From 4,900.00 |
Establishment of company for sole traders, freelancers (autónomo) |
600.00 |
1,900.00 |
Company representation / Spanish virtual office GmbH (SL), annual |
3,000.00 |
3,000.00 |
Management of Spanish GmbH (SL), annual |
6,000.00 |
6,000.00 |
Immigration - private individual |
600.00 |
1,200.00 |
Immigration - private individual, per additional family member |
300.00 |
600.00 |
Monthly accounting for Spanish GmbH (SL) |
From 150.00 |
From 150.00 |
Quarterly return for Spanish GmbH (SL) |
300.00 |
300.00 |
Balance sheets for Spanish GmbH (SL) |
From 900.00 |
From 900.00 |
Hourly rate for administrative services |
100.00 |
100.00 |
Hourly rate for tax consultation |
150.00 |
150.00 |
Hourly rate for legal consultation |
From 200.00 |
From 200.00 |
Declaration of income / income tax return for employees (renta) |
150.00 |
150.00 |
(all fees are plus VAT)
Disclaimer: This brochure is not to be understood as legal or tax advice and does not replace a personal consultation. Deviations arising from statutory changes are reserved.
As of: February 2022
WE CONNECT AND MANAGE BUSINESSES, IDEAS AND PEOPLE BETWEEN SPAIN AND THE WORLD
Please contact us for further information.
Phone: +34 871 955 077 | eMail: office@demicco.ch
