topics
tools
Expatica countries
editor's choice

State and private schools in Spain

Festivals in Spain 2011

Should our kids go native too?

Childcare in Spain

Moving to Barcelona with children

Index Last Var.(%)
BEL 20 2119.44 0.28
DAX 6339.94 0.38
IBEX 30 6543 0.13
CAC 40 3047.94 0.32
FTSE 100 5351.53 0.03
AEX 292.76 0.23
DJIA 12454.83 -0.60
Nasdaq 2837.53 -0.07
FTSE MIB 13154.8 0.36
TSX Composite 11576.47 0.09
ASX 4112.8 0.77
Hang seng 18805.72 0.49
Straits Times 2785.63 0.46
ISEQ 20 500.94 1.55
You are here: Home Finance & Business Business From Barcelona: Going freelance in Spain

Business

archive
Enlarge font Decrease font Text size


19/03/2010From Barcelona: Going freelance in Spain

From Barcelona: Going freelance in Spain Blogger Jeremy Holland scoffs at an Expatica article and reiterates that going freelance is by no means easy.

Last year, Expatica ran an article on how to become autónomo or freelance in Spain and I couldn't help but laugh at the line: "The procedure of going freelance is fuss-free as you can be registered as self-employed within one day."

Have they actually ever done it? Leaving aside that fuss-free is not generally a term I'd use to describe the Spanish bureaucracy, the process of becoming freelance is particularly famous here for what a pain it is to do.

Modelo 036
The form, Modelo 036, is more like a book, spanning nine pages of small print written in Spanish legalese that leaves even native speakers confused and consulting a lawyer. Not only must you fill it out completely and legibly in blue, not black, ink, you must also go to three different offices which are conveniently located on opposite sides of the city.

Considering they all open at 09:00 and close at 14.00 Mon - Fri, completing this task with one fell swoop would require the super human speed of the Flash and no lines which is about as likely to happen as snow in August.



Zen approach
As anyone who has had dealings with Spanish civil servants can tell you, dealing with a funcionario as their known is a test of patience of biblical proportions. Notorious for their mala leche (bad milk or surly mood) and the law of falta uno (one thing missing), your first visit will probably end in failure with you being sent home after waiting in a long line for some reason that makes no sense.

The best advice I could give is to think of it as a way to practice zen and take at least two copies of every form you've collected during your stay here, a stuffed coin purse for any unexpected fees or copies, and still plan on coming home at least once during the process with your head shaking in frustration at the absurdity of the situation.

The end result of this process is the social security department deducts either EUR 280 a month or EUR 840 a quarter from your bank account regardless of how much you earn. In return, you get access to the national healthcare system, some protection in case of a work place accident, and a reduced pension whenever the Spanish government finally decides on a retirement age. However, you don't receive any unemployment benefits or paid vacation for those periods when there is no work or everyone is on holiday. 

Disadvantages vs advantages
So is it worth it? Given the fact that private medical and dental insurance costs around EUR 100, it’s probably not worth it.

Not too long ago, the systems that monitored social security taxes (the ones you paid as an autónomo) and the income tax (deducted by the company that hired you) weren't connected, so you could get away with paying the latter while avoiding the former as you built up a client base. You face the risk of the Spanish authorities coming after you nowadays, especially since the arrival of the crisis, so it's best to do it despite it not making economic sense.

On the plus side, working freelance generally means you can charge higher rates than what contracted worker would get and pay a flat 15 percent income tax. With the help of a good accountant, you can write off some purchases such as meals and travel cards as business expenses, getting some money back at tax time.

Best of all, you are the boss and have more control of your destiny and time table. One of the common complaints of contracted workers I hear is that they often have to work their specified hours, whether busy or not, and also sometimes more depending on the work load or if their boss feels like prolonging the day to avoid the screaming kids and ragged wife waiting for him at home.

On the negative side, many freelance friends of mine have commented on the difficulty getting clients to pay for services rendered.  This was always a problem in the best of economic times, but has become particularly noticeable and more frequent with the economic downturn. The judicial process for redress is complex and expensive it seems. Meanwhile, there aren't many credit agencies that will buy off debt and seek to collect.

Potential changes
As I mentioned before, companies in Barcelona are hiring more freelancers as they avoid the social security taxes or severance pay that they would pay to a contracted worker.

So basically, if you want to work legally in Spain and expand your chances of getting hired, you'll have to go through the autónomo process and pay the taxes, which is neither fuss-free nor economically beneficial. The good news is that once you've done it, you won't have to worry about the authorities looking for you and it's relatively easy as far as paper work goes to activate (alta) or deactivate (baja) your freelance status depending on finances.

I recently read in the Spanish press that the government is looking to fix some of the flaws with the freelance system such as offering unemployment benefits. I hope so because an increasingly number of people I know is going freelance given the current job market.

I have to admit my knowledge on this subject is tangential so feel free to correct or expand in the comments section. Still, I think the more you can get upfront, the better off you'll be.

Jeremy Holland / Expatica

Written by an American expat, From Barcelona is a blog dedicated to the city, the life and the people of the capital of Catalunya (Catalonia).


0 reactions to this article

Be the first person to add a comment

General rating:

Rate article:    Add my rating



0 reactions to this article

Be the first person to add a comment
Finance essentials
Finance expert Q&A
ask your question
Finance A-Z listings
find the business you need
Discussion Forums

Technology in Spain

Sat phones/internet links

English in Spain

What is the best travel insurance cover to Spain?

American in Spain

U.S. citizens, plan to vote in 2012? Did you know...

Relocation to Spain

thinking of moving to madrid

Jobs in Spain

Job Agencies or how to find work.

participate in the forums

Inside Expatica
Editor's Guide: Getting Started in Spain

Editor's Guide: Getting Started in Spain

Expatica's Getting Started section will provide practical information on how you can open a bank account, exchange your driving licence, improve your Spanish, and more.

Groups and Clubs in Madrid

Groups and Clubs in Madrid

Here's a guide to an extensive list of groups and clubs in Madrid for expats, from sports groups to social and family gatherings.

Groups and Clubs around Spain

Groups and Clubs around Spain

A brief introduction to our Tax section for Spain, from help with inheritance tax to accounting advice.

Groups and Clubs in Barcelona

Groups and Clubs in Barcelona

Here's a short introduction to our Banking section for those living in Spain, from what to ask the experts to opening a Spanish bank account.