Spain provides prospects for international growth. According to World Atlas, Spain’s economy ranks fourteenth in the world, with industry, agriculture, and energy as its primary economic drivers. The information and communications technology (ICT) industry is also one of the sectors with the most rapid growth. With the biggest domestic fiber network in the European Union and a robust telecommunications and connection infrastructure, Spain is an ideal place from which to recruit remote workers.
There are numerous ways to lawfully employ people in Spain while adhering to the country’s employment laws and payroll restrictions. Utilize the following advice to understand how to legally employ foreign employees in Spain.
Can I hire someone residing in Spain?
Yes, it is possible to employ a Spaniard. Although it is allowed to engage foreign employees in Spain, the local employment rules may differ greatly from those of your own country. Targeting Spanish talent requires an understanding of the employment distinctions and regulatory issues.
How to Recruit Personnel in Spain with a Global PEO
There are a variety of options for employing foreign workers in Spain. The two basic alternatives are collaborating with an existing employer and forming a legal corporation. Your business’s path will be determined by variables such as time, cost, the amount of personnel you desire to recruit, and your long-term growth objectives.
Partner With a Proven Spain Employer of Record
You may collaborate with a Spain employer of record if you want to test the Spanish market or build up your employees rapidly (EoR).
An employer of record in Spain is the legal organization responsible for hiring, paying, and managing your worldwide workforce. A Spain employer of record has in-depth understanding of the country’s employment rules and regulations, and employs and onboards your Spanish-speaking personnel in accordance with those laws and regulations. An EoR manages compliance, risk mitigation, recruiting, onboarding, and payroll, while you maintain full control and day-to-day team management.
Establishing a Legal Entity in Spain
If you want to recruit your Spanish staff directly, wish to hire a big number of personnel, or intend to create a long-term presence in Spain, you need form a legal business in the nation.
Establishing a legal organization in Spain enables you to open a local branch, recruit staff, and process payroll. Establishing an entity gives your business the liberty to recruit employees directly and manage employment logistics internally.
Entity formation is a difficult and time-consuming procedure that requires a team with substantial capacity, financial investment, and understanding of Spain’s legal, corporate, and payroll rules. Partnering with an EoR is preferable if you want to reduce the complexity and expense of the entity formation procedure.
A Replacement for Spain Employer or Entity of Record Set Up
While establishing a corporation and forming an EoR partnership are popular techniques for legally hiring and paying people in Spain, they may not meet your immediate requirements. Here is a more adaptable option:
Employ and pay Spanish consultants
You may target people with specific talents for short-term projects or ad hoc services if you hire a contractor in Spain. A global contractor provides more flexibility and cost savings that would have traditionally been allocated to training, administration, and payroll. Paying independent contractors is often less difficult and riskier than paying full-time workers.
Important Considerations Prior to Hiring Employees in Spain
Each nation has its unique employment standards, therefore you must take into consideration both the tax laws of your company’s country and those of Spain. Before recruiting employees or contracting contractors in Spain, a number of compliance-related risks should be thoroughly evaluated.
Laws on Misclassification
The possibility of misclassifying a Spanish contractor exists. If a contractor asserts that they are regarded as an employee and are entitled to employee benefits, your firm might be subject to fines, penalties, legal challenges, and back pay for employee benefits. Numerous organizations opt to collaborate with a contractor management partner who can prevent misclassification via compliant contracts, precise reporting, and right payroll.
Unknown Employment Laws
Foreign-based businesses may not be acquainted with Spain’s employment legislation. Some employee privileges and benefits include a minimum of 30 calendar days of leave, 14 public holidays each year, and 16 weeks of maternity leave, which may be extended by two weeks per child beginning with the second birth.
In order to cancel an employment contract, both employers and workers must provide 15 days’ notice. In Spain, there is no at-will termination, and an employer must have a valid cause and supporting evidence before firing an employee.
