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Employer Of Record In Spain

Employer Of Record In Spain

Skuad offers Employer Of Record solutions that accelerate and digitize the expansion of your company in Spain without any need to create a subsidiary in the country. Spain’s growing GDP puts it among the top 15 economies globally, and its talented professionals are looking to collaborate with companies in the international arena. With experience and expertise in the Spanish mainland, Skuad makes the perfect partner for developing your business south of the Mediterranean Sea.
Utilizing the Skuad platform gives you an immediate edge over your competitors. By leveraging Skuad’s high-tech infrastructure and network from across the world, you can get easy access to the best talent in Spain. While Skuad busies itself hiring, contracting, paying, and complying with the complex set of Spanish labor laws, you can channel all your energies to set up and scale your business. Learn about our offerings here.

Spain At A Glance

Population: 47.43 million (2020)

Currency: Euro (EUR, €)

Capital city: Madrid

Languages spoken: Spanish

GDP: $1.45 trillion

Employment In Spain

As with most nations in the EU, finding jobs in Spain is notoriously tricky as Spain’s labor laws heavily protect the country’s labor market and give major preference to native employees. Traditionally, the compliance burden has always been heavy and time-consuming for employers in Spain as there are several legislative requirements in the country. However, the recent economic strife has forced Spain’s judiciary to increase reforms in their labor laws and embrace flexibility in the job market. 

Skuad is a Global HR platform that builds remote teams for SMEs and MSMEs around the globe. As your local payroll partner in Spain, Skuad can utilize its extensive knowledge of Spanish labor laws to safeguard your interests and ensure a smooth, uncomplicated recruitment experience for your company. 

By partnering with Skuad, firms can recruit, onboard, and manage remote teams in over 150 countries. While you focus on boosting your growth, Skuad looks after employment contracts, payroll, compliances, benefits, and a whole host of HR responsibilities for your company. With a tech-first approach, Skuad is a self-serve, centralized, and truly automated HR platform.

Contractors Vs. Full-Time Employees

Spain’s labor laws compel employers to commit to their employees. Employers usually have to sign a contract with their employees, spelling out the terms and conditions of employment. The employees usually have two choices — fixed-term contracts or indefinite contracts (permanent). 

Fixed-term contracts are valid for a set time, like 6 months or a year, and are helpful for firms that want to test the performance of new employees before hiring them permanently. Moreover, employers do not have to offer a notice period before terminating a fixed-term contract. 

However, the rules dictate that employers cannot offer a person more than two successive fixed-term contracts for the same job position, each lasting a maximum of 12 months within a 30 months period. Once this time is exceeded, the employee becomes full-time and is automatically offered an indefinite contract.

Hiring In Spain

The hiring system in Spain is regulated and controlled by the government to guarantee the protection of the employees’ rights. The regulations are complicated: jobs are categorized based on a variety of regulations known as Collective Agreements. Simply put, a Collective Agreement is a tool through which employers and employees negotiate the terms and conditions of the employment. They legalize work, working conditions, repayment of obligations, etc., and are renewed annually. 

Commonly, employers log on to jobseekers portals like LinkedIn and InfoJobs to search for new employees. Although LinkedIn is popular globally, InfoJobs is specifically targeted to the EU region. Recruiting new employees through such portals or social media adverts has its benefits. For one, they may find information on various probable applicants. Multiple sources also mean a reduced risk of not finding a talented person for the job. 

However, human resourcing is a complex and cumbersome process, and in a heavily regulated job market like Spain, it is easy for an organization to misstep compliance. Therefore, in Spain, the hiring process is best serviced under the guidance of professionals. 
That’s where Skuad steps in. As your Employer Of Record, Skuad can virtually manage your entire HR process in compliance with the local Spanish law. While an experienced team at Skuad hires and manages the top talent in the country for you, you can focus on more important work like expansion, operational management, and marketing. Learn more now.

Probation And Termination

In Spain, the time of probation is defined by the Collective Agreement of the said job profile. But, in the absence of a Collective Agreement, the trial time cannot exceed 

  • 6 months for undergraduates / junior college specialists
  • 2 months for all others

Permanent contracts, training contracts, and special employment contracts have their own stipulated probation period.

EOR Solution

Working with an Employer Of Record is the best way to enter a complex labor market like Spain. An EOR like Skuad decentralizes the entire HR process and is cost-saving in the long run. With Skuad’s remote and virtual HR platform, you do not need to set up a subsidiary on the Spanish mainland anymore. 

Moreover, outsourcing employment through Skuad’s EOR solutions in Spain means that you do not have to worry about compliance or legal hurdles. The seasoned professionals at Skuad ensure that all local Spanish laws are complied with and your company’s function in Spain remains smooth and hassle-free. 
Custom-made employment contracts as per specific requirements, quick amendments to the existing agreements, and the convenience of e-signing documents are just some of the many additional advantages of working with experienced EORs like Skuad

Types Of Visas In Spain

It’s important to note that the family members of foreigners have to apply jointly or individually for their work and resident visas if they wish to accompany the said foreigners to Spain. Spouses do not get work permits without job offers.

Work Permit

Getting Spain’s work permit is a lengthy, scrutiny-heavy procedure. As such, the country prefers hiring native citizens over foreigners. This is mainly due to the restrictive policies of the Spanish government, which were adopted as a cure for the rampant unemployment in the country. However, with their recent economic downturn and a global pandemic, the authorities have gradually relaxed their immigration policies.

Skuad has a rich network of local partners in Spain that can assist in processing work and residence permits for foreigners in the country. As a reputed EOR in Spain, Skuad looks after all the essential rules and obligations related to local employment. On Skuad’s virtual and fully automated HR platform, you can review your remote employees’ performance and operations from anywhere in the world. Book a demo now.

Payroll And Taxes In Spain

Firms entering Spain can find it incredibly challenging to navigate the complexities of the Spanish taxation system. The major challenges include diligently complying with various income taxes, social security, compensation, VAT, and several such businesses and permanent establishment concerns. 

There are two ways to manage your payroll and taxation in Spain. You can either set up your team or take assistance from seasoned professionals like Skuad, who have a dense network of partners on-field and can systematize your entire payroll management. 
Book a demo now to learn more.

To avoid expenses related to additional staff, legal counsel, and accounting firms, subsidiary companies in Spain need the assistance of local HR professionals, such as Skuad’s online HR platform, who have the requisite knowledge and experience to manage the complex taxation, compliance, and payroll procedures in Spain.

Employer Taxation

Employee Taxation


Employees are entitled to two statutory extraordinary bonuses a year. One bonus is paid around the Christmas holidays and the other in a month fixed by a collective agreement or by the employer and the employee representative. 

The amount of the bonuses is generally fixed by collective agreement but not less than the employee’s basic monthly salary of a month. This can also be paid in 12 prorated payments.

Incorporation: Setting Up A Spanish Subsidiary 

Regardless of the type of business, there are 8 important steps to set up a business subsidiary in Spain. Briefly, they are: 

  1. Obtain tax identification number as a foreign investor
  2. Register with Spain’s Commercial Registry 
  3. Open a corporate bank account
  4. Notarize company documents from Spanish notary
  5. Complete Form D1-A
  6. Deposit form with Directorate-General for Trade and Investments
  7. Pay transfer tax and stamp duties
  8. Register a subsidiary with appropriate authorities like social security, tax departments, etc., and procure the deed of incorporation issued by the Commercial Registry.

However, before setting up your company in Spain, you must review these factors: 

  1. Business: The Directorate-General for Trade and Investments (DGCI) can ask local firms with foreign shareholders and Spanish subsidiaries of non-residents to submit an annual report, and any other additional information, as directed, on the status quo of their foreign shareholding.
  2. Location: Regulations, expenses, and Human Resource availability vary from one region of Spain to another.  
  3. Language: Although Spanish is spoken by 99% of Spaniards, some regions use native languages like Catalan more. 

Using Skuad as your EOR solution can largely simplify the process of setting up a subsidiary in Spain. As your local partner, Skuad understands the complex employment regulations in Spain and can ensure that your subsidiary entirely complies with the local labor laws. For instance, Skuad can draft your contracts with employees or help you register with the Commercial Registry.  
Read about our services here.

Professional Employer Organization (PEO)

A Professional Employment Organization (PEO) provides MSMEs with end-to-end HR services such as payroll management, compliance, health benefits, tax management, hiring, training, etc. A PEO can be seen as an affordable, outsourced HR wing of a firm. 

However, if a company wants to have its HR function in-house, it can employ a company that offers Employment Of Record (EOR) services. Unlike a PEO, an EOR is a legal employer of the firm. In every other way, an EOR is similar in services to a PEO. 

When expanding, it is important for your firm to choose between a PEO and an EOR. Eventually, it all comes down to the scope and scale of your project and your future business opportunities.

Organizations planning to expand into new territories are better suited with a global EOR which becomes the legal employer on behalf of the organization. Instead of associating with a PEO, a co-employment partner, organizations have more to gain by utilizing the services of a EOR solution. The EOR solution safeguards organizations from unexpected policy changes, loss of control, and potential risks as the EOR bears every legal liability for the organization. In addition to these, the EOR handles payroll, tax, and employment law compliances. To know more about Skuad's EOR solution, Contact Skuad today

Conclusion: Why Is Skuad Ahead Of The Curve In Spain?

Spain is a highly regulated market with a major thrust on protecting the constitutional rights of the employees. As a company looking to expand with a remote team in Spain, it is important to review the complexities of the country’s labor laws, especially provisions under its several collective agreements and intricacies of Spain’s complicated taxation system. You must also understand how the benefits and obligations of employees differ based on whether they are from EU/EEA regions or not. 

With rapid progress in virtual management and automation, global HR platforms like Skuad have democratized employment opportunities in Spain. With Skuad, companies need not go through the arduous journey of setting up subsidiaries — they can simply trust their local partners to hire exceptional talent. At the same time, they can focus on expanding their business operations.

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