Working in Spain: overview for UK umbrella contractors

As borders begin to reopen from coronavirus lockdown, more contractors in the UK are turning their attention to international opportunities again.

But as they do, the need to remain compliant with local employment laws and tax requirements both in your home country and destination of work is once again critical.

However, for both those venturing abroad for the first time and seasoned international contractors, it’s important to remind everyone that operating compliantly no matter where you choose to work is crucial in order to avoid potential fines or criminal charges, writes Michelle Reilly, CEO of 6CATS International.              

No-one-size-fits-all umbrella solution

What is required to remain compliant, though, will now vary by country and it’s crucial that UK contractors aren’t lured into the false belief that they can utilise an ‘internationally viable’ umbrella company solution as there simply isn’t one that is compliant.

For UK nationals working via UK-based umbrellas, it’s also crucial to bear in mind that following the UK’s exit from the EU, you will need a work permit to work anywhere else in the world. The same goes for any UK national.

In order to help contract professionals be in the best possible position when looking at contracting internationally, we’re outlining some of the legal requirements of varying countries. In this part one of this mini-series exclusively for ContractorUK, we take a look at Spain – a destination that is currently experiencing a spike in demand for UK contractors.

Contracting compliantly in Spain

For any non-EU professional looking to work in Spain, there are a number of visa options available, but for most professional contractors looking for opportunities in the country, options include a long-term work visa and the EU Blue Card.

Most visas will require a visit to a Spanish embassy, though a potential employer can make the application for a worker in some instances.

Potentially helpfully for you, Spain does have a Shortage Occupation list and anyone who meets the criteria on the list can work in the destination as a highly-skilled employee. However as above, you will still need to apply for the appropriate work visa through the Ministry of Labour. It’s important to also be mindful of the length of time it can take for these to process which can be up to eight months in some instances.

Required documentation and taxes if you work in Spain

Aside from the appropriate work visa, contractors will also need to obtain a Numero De Identificacion de Extranjeros or ‘NIE’ (pronounced ‘near’) number in order to compliantly work in Spain.

This is the foreign equivalent of the national identity number (DNI) that local residents have. Your NIE number enables you to register to pay Spanish taxes for the duration of your contract.

For any contracts that are set to last for over 90 days, you will also need to sign up to the ‘foreigners’ register.’ This is a separate registration process which secures your tax residency in the country.

Social Security payments are also required in Spain unless your employer is based in another country that you are a resident of and your Social Security payments are made in this destination.

When eyeing a Spanish contract, don’t be fooled by ‘international umbrellas’

Operating compliantly in Spain is entirely possible, but umbrella contractors should be wary of ‘international umbrella solutions’ as they won’t provide a viable solution to compliantly work in the country. Fortunately, there are location-specific solutions, and these should ensure you are operating on the right side of the law.

Finally, please be aware that the above guidance provides a general starting point and overview for umbrella contractors looking to use the structure they are familiar with to contract overseas compliantly, but we always advise seeking individual guidance tailored your unique circumstances.

Wednesday 11th Aug 2021
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Written by Michelle Reilly

Michelle Reilly is the CEO of 6CATS International and Founder of 6CATSPRO. With over 20 years experience in developing and managing contractor workforce solutions, she is an expert in international tax compliance.
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