How to Be a Freelancer in Spain (+ 6 Mistakes to Avoid)
There’s a lot of excitement. You have a great idea, you know you’re ready to support the customers who need you, and you can’t wait to get started. Before you do, you need to know exactly how to be a freelancer (autónomo) in Spain. If you take the right steps, you can and you will be soon!
How can you be a freelancer in Spain?
You’ve got a billion questions. For starters, how much paperwork do you have to fill in? Is it expensive to be a freelancer? Is it hard? In this article, you’ll find answers to these questions and more. Let’s get started:
- What is a freelancer?
- What’s the difference between being a freelancer and being self-employed?
- Advantages and disadvantages of being a freelancer
- What’s required to become a freelancer in Spain?
- Can you freelance while you’re employed full-time?
- How to start your freelance business in Spain
- Popular freelance jobs
- 6 Freelancer mistakes to avoid
- Get started with freelancing in Spain
What is a freelancer?
A freelancer doesn’t work for a salary or directly for a company. Instead, a freelancer provides services, in the same way a business might, to one or more companies or clients for profit. Instead of receiving a salary, you send invoices for completed work or get paid a regular retainer.
As a freelancer, you’re both your own boss and your own employee. You have to look after your taxes, keep your books, do your marketing, sales and customer services, and provide logistics. You also have the freedom to create your own terms and conditions.
Freelancers in Spain have to pay personal income tax and must submit quarterly IVA (VAT) returns, whereas employees’ tax comes directly out of their monthly salary.
What’s the difference between being a freelancer and being self-employed?
There’s no real difference between being a freelancer and being self-employed (autónomo). They both amount to working for various clients without an employment contract. Socially, people refer to freelancers more often as service providers, like writers, web designers, and consultants. Self-employed people are more often seen as mechanics, plumbers, and electricians. All of these professions can be considered both freelance and self-employed, as can food truck owners and people who sell products in online marketplaces such as Amazon or eBay.
📚 Further reading: Bizum for Freelancers: Everything You Need to Know
Advantages and disadvantages of being a freelancer
There are lots of advantages to being a freelancer, with freedom at the top of the list but there are disadvantages too. Let’s see the main pros and cons of both sides:
Advantages of being a freelancer
- More flexibility. You’re not bound to anybody else’s schedule, which means you can spend as much or as little time as you like doing the things you enjoy away from work. This all comes at a price, of course, and when you’re not working, you could be missing out on extra income.
- You’re your own boss. You make the decisions on your business. You choose your brand, your colors, your copy, your clients, your working hours, and everything else in between. You’re your own boss and you get to choose how you run your business. That being said, you do have to sell products and services, which means you have to take care of your clients' needs. There’s always someone to answer to, even as a freelancer.
- Rates. Your hourly or project rate is usually higher as a freelancer than if you’re working as an employee. Clients are often willing to pay more for a short-term contract or a one-off project because they don’t have to account for sickness pay or any of the usual employee benefits.
- Variation. Some jobs can quickly become stale. You feel like you’re stuck doing the same thing over and over again, producing the same results. You choose the tasks you want to take on as a freelancer, so if you get bored with one type of project, you can take on something else the next time. Of course, it’s not that simple, you have to find a project and persuade a client to take you on first.
Disadvantages of being a freelancer
- Risk. As a freelancer, you only get paid if you do a job to the satisfaction of a particular customer. You don’t get paid for marketing, sales, filing accounts, or any of the other tasks you complete. If you can’t find any clients, you won’t have any income. Working for an employer often means you get paid, simply for being there.
- Social security. Social security for most professions in Spain costs a minimum of €288.98 per month. It acts as a contribution towards things like healthcare and your pension. There is a reduced flat fee version for new freelancers, starting at €60 per month. This is a particular disadvantage in Spain but you have to consider tax and insurance costs wherever you set yourself up.
- Pensions. You’re not automatically entered into a pension scheme and in Spain, the state pension isn’t worth very much, especially for freelancers.
- DIY. As a freelancer, you’re running your own business. This means you have to do everything yourself or pay someone else to do it for you. This costs either money or time and can take you away from doing the things you love.
What’s required to become a freelancer in Spain?
There’s one main variable for becoming a freelancer in Spain. If you’re a citizen of the European Union/European Economic Area (EU/EEA) or Switzerland, registering as self-employed is almost identical to being a Spanish citizen. If you’re not, there’s more to think about. Let’s review what’s required to become a freelancer in both situations:
EU/EEA and Swiss citizens
1. Get your NIE number (Número de Identification de Extranjero)
This is your tax identification number. It’s unique and it’s one of the most important documents you need to register as a freelancer in Spain. Native Spanish citizens will already have an identification number, called a DNI (Documento National de Identidad), which serves the same purpose.
2. Register for income tax (IRPF) and VAT (IVA)
As a freelancer in Spain, you have to pay your own tax and you’re obliged to pay VAT (value added tax) at 21%, so you need to register with the tax agency, known as Agència Tributària, AEAT or Hacienda. You’ll need your:
- Passport and a copy
- NIE number
- Empadronamiento (address registration).
- Modelo 30 (to register as a resident taxpayer)
3. State your economic activity
The tax agency will also need to know the type of work you’ll be doing as a freelancer so you can pay any appropriate taxes for that sector. You’ll need your Modelo 036 or Modelo 037, which confirms your name, location, and type of economic activity.
4. Register with social security.
Once you’re registered with the tax authority, you have 30 days to register with social security for self-employed workers, called Régimen Especial Para Trabajadores (RETA). You have to do this even if you don’t have any income. You’ll need your:
- Passport and a copy
- NIE number
- Empadronamiento (address registration)
- Filled out TA.0521 form to declare economic activity
- Bank details if you’d like to pay by direct debit
5. Obtain appropriate licenses
Some freelancers need special licenses to operate in Spain, especially if you employ others or if the work you do impacts other people. For example, if you’re open to the public, you need the Licencia de Apertura, which also applies if you’re working from home but have customers visit.
6. Open a Spanish bank account
You don’t have to have a Spanish bank account to operate as a freelancer in Spain, but it helps. You can get paid easily and link it to the payments you receive. Plus, your mandatory social security contributions will be deducted every month through your Spanish bank.
Non-EU/EEA and Swiss citizens
1. Spanish freelance visa
As a non-EU/EEA or Swiss citizen, you have to apply for a Spanish Freelance Visa. This allows you to legally live and work in Spain as an “autonomo”. It’s valid for one year and each renewal is valid for two years. You’ll need:
- To be at least 18 years old
- A criminal record check certificate
- A medical certificate
- Proof of private medical insurance
- Proof of appropriate academic or professional experience
- Proof of funds
- A filled Modelo EX-07 form
- Your passport and a copy
- A viable business plan
- Sufficient planned investment
2. Residence permit
You have to collect this within 30 days after your arrival in Spain.
3. Everything EU/EEA and Swiss citizens need
Refer to the list above.
Can you freelance while you’re employed full-time?
It’s possible to work as a freelancer and as an employee at the same time in Spain. You’re officially known as “pluriactividad” in this situation. You can benefit from certain social security deductions if you contribute to the tax system twice, whether you have a full-time or a part-time job.
How to start your freelance business in Spain
Even thinking about starting your freelance business in Spain is something to be proud of but before you start, you need to make sure you’re ready to become profitable as a freelancer in Spain. Use these eight steps to get started:
1. Determine the services you’ll offer
Before you decide on the services you’re going to offer, you need to establish a need. What exactly is the problem you’re solving or the desire you’re helping to fulfill? From here, you can define your brand. This isn’t about logos, colors, and website fonts, it’s about who you are as a business. Think about your values, your purpose, your brand’s personality, and your audience. What do they care about and where are they?
2. Register your freelance business
As you’ve learned already, the requirements for registering your business will depend on whether you’re an EU/EEA or Swiss citizen. Follow the instructions above to get started.
3. Create a website and/or social media profiles
You need to be visible. One of the best ways to do this is to create a website and to make sure you’re on the social media platforms that your ideal customers are on. You might prefer to list yourself on “professional cleaner” directories or something similar for your profession. The important thing is that your potential customers know you exist.
4. Define your rates
This is one of the hardest parts for most freelancers. There are a number of factors at play when you’re defining your rates. One of the most important is the perceived value of your products or services to your potential customers. This will be based on the market, your brand, where you position yourself in relation to competition, and a number of other factors. The most important aspect for you is to know your rates and why you've chosen them. Whether you choose to display them to the wider public or you tailor your rates per individual customer is up to you.
5. Create a billing system
Invoicing can seem like a daunting prospect but it doesn’t have to be if you’re prepared. Set up your payment terms in advance. Think about how you’ll charge customers, when you’ll charge them, and the payment methods you’ll accept. For example, many service providers set up net 30 terms, which allows customers to pay 30 days after an invoice is sent.
For freelancer payments, it’s important to be as flexible as possible for your customers. Card payments are still the most common in Spain and most freelancers accept bank transfers. Many customers now prefer to pay with Google Pay, Apple Pay, Bizum, and other alternative payment methods. The more options you give your customers, the better their payment experience will be.
6. Sign up for freelance platforms
Finding customers can seem scary but there are a lot of freelance platforms out there that you can use to get started. Some of the larger companies like Upwork, Freelancer, and Fiverr have a lot of competition but there are numerous businesses looking for support.
Being too reliant on these platforms can be a bit of a trap if you’re not careful about making sure you’re standing out and sticking to your prices. But using them as another tool in your customer search is often worthwhile. Some lesser-known platforms are Malt, Workana, Toptal, and Behance.
7. Approach potential clients
You’re already putting yourself out there by signing up for freelance platforms and marketing your freelance business on social media, but now that you have the foundations in place, you can be more direct.
Start approaching potential clients and selling. It feels scary to sell, especially if you’re not used to it, but think of it as building business relationships instead. You know there’s a need for what you offer and you know you’re good at what you do. Approach potential customers to introduce yourself and let them know how you can help them.
8. Manage your projects
By this point, you’re flying but with success comes extra tasks and responsibilities. Think about how you manage each project. Can you do it all yourself or do you need to hire people and businesses to do it for you? Maybe you can ask a PA (personal assistant) or VA (virtual assistant) to complete some admin and bookkeeping tasks for you. You could also hire a marketer to get your name out there while you’re keeping your current customers happy.
Popular freelance jobs
You might be wondering what types of jobs freelancers do. You get to decide your services, but here are some of the most common freelance jobs:
Social media managers, copywriters, editors, and lots more professions can be put into the online marketer bracket, although they all do different things. As an online marketer, your basic job is to connect a business with its audience and make its products and services stand out from the rest.
Most businesses need a website. It’s their digital home; a place potential collaborators, suppliers, and customers can find out more about them. Web developers create the code and templates that make a company's website exist.
Graphic designers create art that’s tailored to a business’ brand. They understand how to make your websites, leaflets, social media profiles, and other visual assets stand out and look compelling to potential customers.
You don’t start a business unless you want to make money and when you make money, you have to pay taxes. Accountants work with businesses to make sure income tax returns and VAT are paid on time. They’re also available to help with tax and finance questions.
Carpenter, plumber, or electrician
The “trades” are commonly occupied by freelancers and contractors, who don’t want to rely on one company to pay their salaries. You can join a trusted trade group to help build trust in your name and services.
We’re all busy in our daily lives and sometimes, keeping the house clean is one job too many. If you offer house cleaning services, you can benefit from setting up a freelance business.
As a hairdresser you may work in more than one salon as a freelancer and do house calls.
Legal needs are something we all have to think about at some point. As a freelance lawyer, you may have larger, corporate clients or provide legal advice to small businesses and individuals.
6 Freelancer mistakes to avoid
Most freelancers you speak to will have made one or more of the mistakes listed below. Learn from them so you don’t fall into the same traps:
1. Keeping personal and professional finances together
Imagine ciphering through every line of your personal bank account to check business payments, expenses, and interest. You’d need to make sure your grocery shopping doesn’t get confused with your travel expenses and business phone contracts. It makes quarterly declarations and end-of-year taxes even more difficult than they already are.
2. Doing your own accounting
Keeping track of your monthly income and expenses is important as a freelancer, but when it comes to paying your quarterly VAT taxes and filing your annual tax returns, working with an accountant can save you time and potentially money that you could lose from making mistakes.
3. Start working before conditions are agreed
Experienced freelancers make sure the full scope of a project, including payment terms, delivery dates, and working practices are fully defined before they start any work. This is often because they’ve learned the hard way that not doing so can mean spending time and resources on work that never gets paid or customers want more than you’d initially agreed to for the same price. Make sure you don’t make the same mistake.
4. Sending unclear invoices
You want to be paid for the work you do but many freelancers make the process complicated by sending unclear invoices. There’s no clear instruction on how to pay, when to pay, or what to do if a customer needs more information. Keep your customers happy with clear payment instructions and a list of available payment methods.
📌 Pro Tip: Accepting card payments is essential. But it shouldn’t be the only payment method you offer. Adding alternative and local payment methods to your freelance business is crucial. Use MONEI to diversify your payment stack from a single platform. Get started ››
5. Hiring the wrong people
It’s not easy to hire the right people. Even big companies get it wrong but if you’re looking for support in your freelance business, it’s important to hire the right people. Look for references, check qualifications, and make sure whoever you hire connects with your brand and your values.
6. Not hiring anyone
This isn’t always a mistake but as you grow, trying to do everything yourself can become a problem. You spend time on the things you’re not an expert in so you have less time to spend on the things that make your customers’ lives easier. Ask for support when you need it.
Get started with freelancing in Spain
You’ve held in the excitement long enough. You know how to be a freelancer in Spain so it’s time to think about the future. Be aware of the disadvantages, enjoy the advantages, and find your first clients. When it’s time to get paid, you can rely on MONEI.
Alexis Damen is the Head of Content at MONEI. She loves breaking down complex topics about payments, e-commerce, and retail to help merchants succeed (with MONEI as their payments partner, of course).