Spain
Spain recently passed the Startups Law — and it spells great news for foreign talent, investors, entrepreneurs, and digital nomads. The law was designed to nurture the country’s startup ecosystem, offering new startup visas, tax benefits, and special public funding. Still, whether you’re a startup or established business, there are a number of requirements you should be aware of when entering the Spanish market.
At a Glance
There’s no local bank account needed.
English is required.
The standard payroll frequency is monthly.
No, local registration isn’t required.
The employer taxes are ~30% of gross salary.
Yes, there are mandatory 13th and 14th salaries.
Good to Know
Spain is a parliamentary democracy and constitutional monarchy. As a unitary state, it’s composed of 17 autonomous communities and two autonomous cities with varying degrees of autonomy. Spain has been an EU member since 1986 and joined Schengen in 1995.
The Mediterranean climate, the rich culinary scene, safety, and good health indicators make Spain a preferred destination for expatriates to live and work.
Spain is consistently among the most visited in the world, drawing tens of millions of tourists each year. The country’s 49 UNESCO World Heritage landmarks are big draws.
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Wage Considerations
Minimum wage is established by the government every year for persons over 18 and amounts to €1,000 a month or €14,000 per year (including 12 monthly and two bonus payments) for 2022. In 2023, the same amount has been extended. Wage costs in Spain are very competitive compared to those in neighboring countries. Many wages are covered by Collective Bargaining Agreements (CBA).
Contracts & Taxes
Flexibility in hiring and firing characterizes the Spanish labor market. The needs of each employer shape the employment contracts. Both the employer and employee must contribute to the Social Security system. When it comes to direct taxes, investors should know about the company tax, personal income tax (IRPF) and non-resident income tax. The main indirect taxes are VAT and Transfer Tax and Stamp Duty (ITP and AJD).
Labor Compliance
After the COVID-19 pandemic, the labor obligations of companies have increased (in matters such as equality, equal pay, the right to digital disconnection of workers, work-life balance). It is therefore essential that companies in Spain work with a partner that advises not only on payroll matters, but also on labor compliance.
Next Steps
Take the complexity out of expanding into Spain. Our team of local experts are here to support your operation, every step of the way. With an unparalleled focus on the customer experience, we empower you to go global with ease.
We back up our expert-led managed services and technical consulting with GateWay, a pioneering platform that unifies all your applications and data for cross-border success in a single place. It’s your one-stop-shop for global growth.
“While local vendors tend to primarily care about their sliver of the business, HSP Group is, as the single provider, fully invested in the success of the entire organization.”
Head of Finance and Operations at a fast-growing FinTech