smashor

Hi there, I'm trying to figure out if there is a way to manage my online business from spain without beeing classified autonomo, which will force me to pay 250 euros monthly of social security even if the earnings are zero, which i find unfair. So, do you think it would work if i did something like this:

-Have a company based abroad which therefore operates based on the rules of the country where it's resident (and not the spanish ones) and pays its corporate tax there.

-Have 100% of the company's shares but have a family member (not resident in spain and therefore not subjected to spanish employment laws) as director (with zero salary and zero shares)

-Once a year, when the company pays its dividends to me I pay whatever tax on it to Spain as i would still be a spanish tax resident of course

Basically i don't mind paying whatever taxes but paying SS in an amount which is not proportionate to what i earn is pure robbery. I would rather not use their SS services and have private health insurance, and a private pension fund.

I think in this scenario even though i would be the person doing the online work, technically on the books i'm not an employee or contractor of the company, therefore i'm not employed and not employment means no SS. I guess it would be very hard for them to prove otherwise especially because it's all online work you do with a laptop and nothing else, so really under the radar, i guess they could track your IP and prove that you managed your business from spain but that's really easy to disguese as you can bounce your ip through servers all over the globe :-p I think it's such a grey area, what do you think? Thanks in advance

mikelincs

Your biggest problem I can see is that without paying SS in Spain, then you have no free healthcare etc, and what you are suggesting is, at the very least, somewhat illegal, so no-one on here would condone you doing that.

Rosemary

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

Rosemary

I agree with Mikelincs, no-one on here will encourage you to be illegal in any shape or form.

Also in order to become resident in Spain nowadays you have to prove that you either have sufficient money in the bank or sufficient earnings to ensure that you will not become a burden to the country. Things have changed greatly over the past few years with Spain taking more and more measures to make sure that people coming here to live do so legally.

Rosemary

snikpoh

To be blunt, this is rubbish!

It is far more fair that the UK system where you pay a percentage of earnings.

Given that the SS (NI) payments go towards healthcare, these costs are nothing to do with how much one earns so a fixed figure is more likely to cover the costs.

If you don't pay SS here then you will have to pay for private healthcare - do you know what this will cost you? ... and then there's existing conditions which won't be covered.


Also, how will you prove sufficient income to live here?


Hmmm.. why try and abuse the system? Surely it's best to be legal if you want to live in Spain - otherwise, go live somewhere else!

cricketman

As others have said, what you suggest is illegal. You may get away with it, but if you are caught then you will need to take the consequences

270 euros per month really isnt very much and for that you get healthcare and pension rights. If you dont think you can cover the little over EUR3,000 per year with your freelance income then it probably isnt worth doing

smashor

Thanks everybody for the quick answers! Obviously before doing anything i wanted to know if it was legal or not, this is why i asked in the first place. I'm actually surprised to see that some people prefer the SS flat rate system over the uk system which actually provides all sorts of allowances, both income and NIN, in case what you earn is not much. That is often the case if you have a new business as most of the revenue is used in the first years to expand and often you make little profit, and a flat rate can easily become a burden in that case. I guess i'll wait until my source of income is stable enough so i don't have to worry about the SS flat rate......or just consider a country which is a bit more business and tax friendly for the first period. Anyway, thanks again

cricketman

The Spanish social security system is not a flat rate system

270 euros per month is the minimum amount you can pay each month. This amount actually goes up to over 1,000 euros per month if you earn over 45k per year, but you can still opt to pay the minimum amount, which also means you will get the minimum pension when you retire

For young people who have never been autonomo before, there are heavily discounted rates, so actually the system is a little bit better thought out then you might think

Tadd1966

new start ups in Spain get a big discount on autonomo


a. 0 to 6 months 80% discount


b. 6 to 12 months 50% discount


c. 12 to 18 months 30% discount


d. More than 18 months 0% discount full rate


so should help you in first year

billgates

Hi Cricketman,
Can you tell us any more about pension entitlement when paying autonomo? Do you know of an official web link for more info?

Is there a sliding scale of contributions made / pension received?
How many years do you have to be paying autonomo before you are guaranteed some sort of Spanish pension?

I pay the standard 270 ish a month and have been for ten years or so now. Will this entitle me to some sort of return? What would be a reasonable increase in contributions to receive a reasonable increase in pension?

Thanks for any info you can give.

cricketman

Obviously you live in a different universe than the one I do. All the autonomos I work with are legal and paying social security etc. In fact that is the only way you can send an official invoice within Spain so it is hard to be an autonomo without being legal!

But yes, there may be a forum law against encouraging criminality

cricketman

I am over 30 years from pensionable age so I do not have the specific information

The minimum pension is around 500 euros per month and the maximum around 2,500 euros per month

Paying 270 euros per month only gives you something close to the minimum pension

It used to be that you had to pay into the system 30 years to be given a pension, and that they calculated the amount of pension based on the last 10 years of contributions, but this has changed recently. I believe it is now 35 years and the amount of pension is an average across the whole of that time (something like that)

guirijohn

There is an agreement between the main political parties, the Pact of Toledo, which says that from 2018 the amount paid out in pensions should not exceed the contributions paid in. In 2015 €7.7 billion more was paid out than paid in.
Currently there is a bit of a stampede by older bank workers, teachers and civil servants with a full contribution record to take early retirement. They fear that the “good times” may not last and want to lock in their pension.


The average retirement pension in 2015 was €1,041 per month, but it is very difficult to know the pension you are likely to receive many years from now. It really depends on Cricketman and his generation.

cricketman

Yes, Spain needs around 5 million immigrants just to balance the social security books

But of course there are not enough jobs for those that are already in the country!

Personally I am not relying on getting any state pension. And if there still is one by the time I retire then that will be a nice bonus