Spain

Spain offers a strong talent pool, but only certain hiring models are legally compliant under Spanish labour law. You can establish a Spanish legal entity (Sociedad Limitada or Sociedad Anónima) for long-term operations, set up a non-permanent establishment for limited or test-market presence, or engage independent contractors (autónomos) for genuinely project-based work. Each route involves different compliance and operational effort.

Registering a company in Spain takes several weeks, depending on company structure, approvals, and completeness of filings. The bigger task is ongoing, registering employees with the Tesorería General de la Seguridad Social (TGSS), making employer and employee contributions, applying the relevant collective bargaining agreement (CBA), withholding IRPF, and maintaining statutory records. Regional variations and strict dismissal procedures add steady administrative load.

Yes, you can engage independent contractors (autónomos) in Spain when the relationship genuinely reflects contractor status. Contractors must register as autónomos with Spanish tax and social security authorities, invoice for their services, pay their own contributions, and work with genuine independence. If treated like an employee, Spanish authorities may reclassify the relationship, with fines from €3,126 to over €10,000 per worker.

HR compliance in Spain means policies, contracts, and practices align with Spanish labour law and the applicable collective bargaining agreement (CBA). It covers working hours, timely wages, mandatory contributions to the Tesorería General de la Seguridad Social (TGSS), IRPF withholding, statutory benefits like 30 days annual leave, 16 weeks each for maternity and paternity leave, and strict dismissal procedures. Getting it right protects employees and reduces employer liability.

Employing in Spain involves statutory contributions on top of gross salary. Employer costs total around 32.5%, common contingencies (23.60%), unemployment insurance (5.5-6.7%), FOGASA (0.20%), training fund (0.60%), MEI (0.67%), and occupational accident insurance (0.90-8.50%). Employers also withhold employee contributions (~6.48%) and IRPF (19-47%). Totals vary by contract type, sector, and salary level.

Hiring through an Employer of Record isn’t legally viable in Spain. Spanish labour law requires that the entity directing the work also handles payroll, social security, and benefits, splitting these is treated as illegal labour leasing (cesión ilegal de trabajadores), with fines up to €225,000. To employ compliantly, Boundless helps companies register their foreign entity as an employer or set up a local Spanish entity.

Companies employing in Spain must provide a written contract setting out role, salary, hours, and termination, and apply the relevant collective bargaining agreement (CBA). They register with the TGSS, pay employer contributions of around 32.5%, withhold employee contributions and IRPF, and follow rules on working time, overtime, leave, health and safety, equality, and GDPR. Strict procedures apply to dismissal and severance.

When employing in Spain, both companies and employees contribute. Employer contributions total around 32.5% of gross salary, common contingencies (23.60%), unemployment insurance (5.5-6.7%), FOGASA (0.20%), training fund (0.60%), MEI (0.67%), and occupational accident insurance (0.90-8.50%). Employees contribute approximately 6.48% plus progressive IRPF of 19-47% depending on income, region, and personal circumstances.