Complete Guide for Entrepreneurs: How to Register as Self-Employed in Spain

Starting a business as a self-employed person in Spain can be an excellent way to embark on your own venture and manage your own business. Although the process may seem complicated at first, it’s quite accessible once you understand the key steps. In this guide, we’ll explain in detail how to register as self-employed in Spain, the requirements, and the main obligations you need to know to operate within legal boundaries and successfully.

Step 1: Determine if You Really Need to Register as Self-Employed

Before starting, assess whether you actually need to register as self-employed. The law stipulates that individuals who carry out a regular, personal, and direct economic activity for profit must register as self-employed.

If you have regular income and carry out a commercial activity, you must register with Social Security and the Tax Office. Even if your activity is part-time or generates low income, it’s essential to comply with this requirement to avoid penalties.

Step 2: Registration with the Tax Office (Form 036 or 037)

The first formal step to registering as self-employed is to register with the Tax Office. To do this, you must complete Form 036 or Form 037 (the simplified version of the former), depending on the complexity of your activity. This process is called the Census Declaration and requires information on:

• Personal details: Name, DNI/NIE, tax address.
• Economic activity: Define the type of activity you will carry out. You must select an Economic Activities Tax (IAE) code that corresponds to your activity.
• Place of business: Whether you have a physical location or work from home, this must be declared.
• VAT and IRPF regime: The Tax Office will ask you how you will handle your quarterly tax returns and what types of withholdings will apply based on your activity.

Where to complete the process? You can submit the form in person at the Tax Office or via the Tax Agency's Electronic Headquarters if you have a digital certificate.

Step 3: Register with Social Security (Special Regime for Self-Employed Workers - RETA)

Once registered with the Tax Office, you have 60 days to register with Social Security under the Special Regime for Self-Employed Workers (RETA). This step is mandatory for all self-employed workers and sets the monthly contribution you will pay.

• Deadline: While you can register until the last day of the month in which you start your activity, it’s ideal to do it as soon as possible to avoid issues.
• Self-employed contribution: Starting in 2024, the monthly contribution will be based on real income (see more in the next section).
• Discounts: If you are a new self-employed person, you may be eligible for the flat rate, which significantly reduces your contribution during the first 12 months (although it varies by region).
• Where to complete the process? You can complete this step via the Social Security website using your digital certificate or at a Social Security Treasury office.

Step 4: Flat Rate for New Self-Employed Workers

New self-employed workers can benefit from the flat rate or reduced contribution, a measure designed to help entrepreneurs start their activity with a lighter cost burden. The new flat rate consists of a fixed fee of 80 euros per month during the first 12 months of activity, regardless of income generated.

Extension of the Flat Rate

If after the first year your income remains below the Interprofessional Minimum Wage (SMI), you can extend the flat rate for an additional 12 months, paying the same fee of 80 euros. This means you could enjoy the flat rate for up to two years under the following conditions:

• First 12 months: Fixed fee of 80 euros per month.
• Next 12 months: Fee of 80 euros per month if income remains below the SMI.

Requirements to Access the Flat Rate

To benefit from the flat rate, self-employed workers must meet the following requirements:

• Not have been self-employed in the last two years (or three if they previously benefitted from the flat rate).
• Register with the RETA (Special Regime for Self-Employed Workers) upon starting their activity.

This reduced rate allows new self-employed workers to significantly cut initial expenses, enabling them to dedicate more resources to business growth in the early stages.

Step 5: Understand Your Tax Obligations

Once registered as self-employed, you will have several tax obligations:

• Quarterly VAT return (Form 303): If your activity is subject to VAT, you must submit this return quarterly and pay the corresponding tax.
• Quarterly IRPF return (Form 130): You must submit this form quarterly if you don’t issue invoices with withholdings. Here, you will pay IRPF advances on your profits.
• Annual VAT and IRPF summaries (Forms 390 and 190): At the end of the year, you must submit annual summaries of your activity and the taxes paid.

Step 6: Explore Benefits and Assistance for Self-Employed Workers

In addition to the flat rate, there are other benefits and assistance options for self-employed workers. Some examples include support for those under 30, female entrepreneurs, or those with recognised disabilities. Consult with an advisor or the Social Security office for details on the available assistance and benefits based on your personal situation and Autonomous Community.

Step 7: Optional but Recommended – Hire an Advisor

Managing the registration process and tax returns can be challenging due to constant regulations and changes. Hiring a professional advisor can help you avoid errors and penalties, allowing you to focus on growing your business.

Conclusion

Registering as self-employed in Spain involves certain procedures and careful tax planning, but it is an achievable step for any entrepreneur. By following these steps and taking advantage of the flat rate and other support options, you’ll be ready to start your business in a legal and organised manner.

If you need help or specialised advice to register and meet your tax obligations, Profico & Associates is here to assist you every step of the way. Contact us and start your business journey with confidence!