Written by Josep Conesa
Labor and bankruptcy lawyer
HIRING EMPLOYEES IN SPAIN WITHOUT PERMANENT ESTABLISHMENT:
Hiring employees without permanent establishment, location or workplace is possible within Europe. In Spain this are the first steps you have to do:
1st.- The first thing a foreign company need to do is to obtain the NIF (Tax Identification Number). This is compulsory since it is the way the Tax Authority identifies your company and it is necessary for all other steps to take.
We will need the following information in order to obtain the NIF:
- Social denomination of the company
- Tax ID of the country of residence
- Date of incorporation or registration
- Tax address in the residence country
2nd.- Once the NIF is obtained, the company needs to open a bank account in Spain.
3rd.- For hiring the employee the equivalent national Social Security System from the company has to certificate to the Spanish Social Security that the CEO of the company is enrolled in the equivalent social security regime as it is needed here, which in Spain is the “autonomous social security regime”.
4th.- Finally, the company has to provide to the Spanish Tax Authority and Social Security an Spanish address, so that they could provide notifications. The address could be a co-working center or could be the one from the employee, but reliance will be needed since all tax or social security company’s notifications will be directed to that provided address.
For preparing the employment contract and hiring the employee we will need:
1.- To know in more detail the activity of the company so that we could advise which is the collective agreement that suits to the company (in Spain the collective agreement sets the minimum wages and rights within the sector).
2.- The salary the company will pay to the employee.
3.- The journey the company wants him/her to do.
4.- The duration of the employment contract (temporal period or indefinite).
5.- The kind of work the employee will perform.
6.- If there are any special clauses like (non post-contractual clauses).
6.- The Bank account number where the Social Security will charge the company and the employee’s contribution.
OUR RECOMENDATION WHEN LANDING TO SPAIN WITH YOUR COMPANY:
There are so many obligations when setting up a company in Spain. We recommend therefore a company lawyer so that could help to safe time when enrolling and fulfilling all legal obligations.