If you run a company in the UK, you may like the idea of doing your job from Spain. In this post, we look at the options open to you and examine the tax and social security implications of being a director of a UK company from Spain.
Is the Spanish Remote Worker Visa an option for me?
You may well have heard about the Remote Worker Visa in Spain, set for imminent approval. It will allow employees and self-employed workers to do their job in Spain for a one year with the option to renew for another two.
Read about the Spanish Remote Worker Visa.
At Costaluz Lawyers, we expect the new visa to be approved very soon – keep an eye on our blog for the latest updates.
What visas can I use to work as a director of a UK company from Spain?
You may not be aware that there is a visa option for people who want to run their UK company or the UK company they manage from Spain . You need to apply for a Self-Employment Work Visa and invoice your services to your UK company.
Does the UK allow directors of UK-based companies to work from Spain?
Yes, non-resident directors are permitted to work from Spain. Your income would be chargeable under section 27 for duties performed in the UK. You can read more information about this here.
Your company would pay your salary into a bank account in Spain and you would liable to file tax returns in the UK.
What about social security and related benefits such as my pension?
As a self-employed worker in Spain, you come under the umbrella of the Spanish social security system. Bear this in mind when negotiating your contract so that you maintain your rights to a pension and other social benefits (and at the level you expect).
Would I get unemployment benefit in Spain?
No, the self-employed are not entitled to unemployment benefit in Spain. Again, negotiate this aspect with your company to ensure you receive financial assistance if you become unemployed.
There is, however, a benefit known as ‘protection for end to activity’ (protección por cese de actividad). To quality for this, you must have contributed specifically to the ‘end to activity fund’ through your monthly social security payments for a minimum of 12 consecutive months.
Note, however, that you receive the benefits for a short period of time. For example, if you have paid into the fund for 12 to 17 consecutive months, you receive benefits for 4 months. The maximum available is 24 months for which you must contribute to the fund for 48 consecutive months.
And even then, the amount you receive is low. You generally receive 70% of the base contribution during the previous 12 months. The minimum monthly amount is 80% of the nationally established minimum wage, known as IPREM, and the maximum is 175% of the IPREM.
In 2021, the monthly amount was €564.90 so the minimum you receive would be €451.92 and the most would be €988.58. If you have dependent children, the amount is higher.
Get more information about long-term visas in Spain.
Will the years I have worked outside Spain count towards my pension for the Spanish social security system?
It depends on which countries you have worked in and whether they have agreements with Spain.
EEA countries – under European Community law, all areas of social security (illness, maternity and paternity leave, accidents, occupational diseases, disability benefits, unemployment benefits, family benefits, retirement and early retirement benefits, and death benefits) are coordinated within the social security systems. The EEA recognises the principle of export of benefits member countries of benefits and coordination rules ensure that contributions paid in countries prior to joining the EU are not lost.
In addition, EEA countries recognise the principle of accumulation of contribution periods so that they are taken into account in other member states. For example, if you have contributed to the social security system in an EEA country for 5 years and come to work in Spain, these years will count towards the minimum contribution of 15 years required in Spain.
Non-EEA countries with agreements with Spain – Spain has bilateral or multilateral agreements with the UK and many other countries such as Andorra, Argentina, Australia, Brazil, Canada, Chile, Colombia, Dominican Republic, Ecuador, Japan, Morocco, Mexico, Paraguay, Peru, Philippines, Russia, Tunisia, Ukraine, Uruguay, the US and Venezuela.
Non-EEA countries with no agreement with Spain – in this case, the worker may generate the right to receive the benefits in the country of destination according to the contributions that he has paid during his time there.
What’s my next step?
If you run a UK company and would like to do so from Spain, get in touch with our expert team to assist you with the visa paperwork. We will set everything up for you to ensure a smooth transition from the UK to Spain. Contact us now.
Maria Luisa Castro
