Registering as a self-employed: a complete guide and essential requirements
Patrick Gordinne Perez2024-10-10T15:05:35+00:00Registering as a self-employed person is an essential process for those who wish to carry out an economic activity on their own account.
This procedure involves complying with a series of requirements and presenting specific documentation.
Nowadays, the whole process of registering as self-employed has been streamlined, but it is important to follow the established steps to ensure that everything is done correctly.
The following guide details each of the requirements and procedures necessary to formalise this employment situation.
Should I register as self-employed if I have no income?
Here is the million dollar question: if I do not invoice or do not have recurring or regular income, do I have to register as self-employed? Let’s clarify this issue.
Self-employed registration
As a general rule, a person is obliged to register with the RETA when they carry out an economic activity on a regular, personal, direct and lucrative basis.
Therefore, it would seem that anyone who starts an activity on their own account must register as self-employed when they start their activity.
However, this is not the case.
Habituality
The courts have qualified the requirement of regularity.
For this condition to be considered to be met – and, therefore, for there to be an obligation to contribute to the self-employed regime – there must be a series of indications.
See below:
- The income obtained from carrying out an activity is the clearest proof of whether or not it is carried out on a regular basis.
Thus, it is deduced that this requirement is fulfilled if the income obtained is higher than the minimum wage SMI in annual calculation.
The day this article was drafted:
- 1,323 monthly;
- 15,876 per year
Moreover, if the person carries out this activity exclusively, it will be understood that he/she must register as self-employed.
Consequently, an indication that will allow to defend the non-registration in the RETA (as long as the minimum income indicated in the previous point is not exceeded), will be that the person has another job as an employee.
Do I have to register as self-employed if I have an establishment open to the public but I do not invoice anything or below the SMI?
However, these rules do not apply in the case of activities where there is an establishment open to the public (hairdressing salon, retail trade, etc.).
Thus, unless there is evidence to the contrary, it is understood that the person who starts such an activity must register as self-employed.
In this case, it may happen that during the first few months sales are weak.
However, it is not possible to wait for the sales to occur before registering with the RETA.
In the event of a labour inspection, the employer will be obliged to pay RETA contributions retroactively from the date of opening of the establishment.
Even if you are not obliged to register with the social security, you will have to declare the VAT and income tax.
Requirements for registering as a self-employed worker
If you want to register as self-employed, you have to register with the tax authorities and social security at the same time (with some exceptions).
In order to start working as a self-employed worker, it is essential to comply with certain requirements established by Spanish law.
These requirements cover aspects related to age, residence, economic activity and possible exemptions from registration.
Age and Residence
One of the first requirements for registering as a self-employed person is to be at least 18 years of age.
This condition guarantees that the person has the necessary legal capacity to carry out an economic activity.
In addition, it is essential to have a NIE in Spain and a work permit.
This applies to both Spanish citizens and foreigners with a valid work permit.
Residence must be justified with the corresponding documentation, which may include the DNI or NIE, depending on the nationality of the applicant.
Economic Activity
The second requirement refers to the performance of an economic activity.
This activity must be carried out habitually, personally and directly by the self-employed.
It is important that the activity is well defined and complies with the established activity codes, such as the CNAE (National Code of Economic Activities).
The activity must be lawful and in line with local and national regulations.
Each type of activity may entail specific obligations, so it is necessary to be properly informed before starting.
Obligation to register
The obligation to register as a self-employed person applies regardless of the income earned, unless it is not done on a regular basis.
If you are going to be self-employed on a regular basis, you must comply with this requirement.
This ensures that the worker is registered with both the Social Security and the tax authorities, which will give him/her access to certain rights and obligations within the legal framework.
Exemptions from registration
There are some exemptions where certain individuals are not required to register with the Inland Revenue as self-employed. These include:
- Members of cooperatives who are willing to carry out their activity in the cooperative.
- Managing partners who do not receive remuneration as self-employed.
- Religious persons who carry out their activities on behalf of the church.
- Family collaborators of self-employed persons who do not have their own income.
- Agricultural workers who collaborate with the family farm.
These groups can carry out their activity without having to register as self-employed, although they must comply with other specific regulations governing their situation.
It is essential that those who belong to these groups are properly informed about their situation and the obligations that will apply to them.
Necessary documentation to register as a self-employed person
Having the right documentation is essential to complete the self-employment process.
Below are the documents that must be submitted at the different stages of this procedure.
Social Security Number (NUSS)
The Social Security Number (NUSS) is a personal identifier that allows the self-employed to access Social Security benefits and services.
If you do not have this number, you must apply for it through the Social Security General Treasury. This procedure can be carried out in person or electronically.
Identity Document (DNI or NIE)
The DNI (Documento Nacional de Identidad) is compulsory for Spanish citizens, while the NIE (Número de Identificación de Extranjero) is required for foreigners residing in Spain.
This document must be valid and must be presented at the time of registration.
Date of commencement of activity
It is important to define the date on which the economic activity will start.
This date must be communicated to both the Social Security and the Tax Authorities, as it will affect filing deadlines and the start of tax and contribution obligations.
Income Estimation
The self-employed person must present a forecast of the income he/she expects to receive each month.
This estimate is key to determining the contribution base and, subsequently, the contribution to be paid to Social Security.
It is important to be realistic in this calculation to avoid future financial problems.
Domicile of the activity
The address where the activity is to be carried out should be indicated.
This address must be an authorised premises and comply with current regulations.
If the activity is carried out from home, it must be specified that this is the case and that the necessary requirements are met.
Contact details
Prospective self-employed persons must provide contact details, including a telephone number and an e-mail address.
These details are necessary to establish formal communications and receive notifications from the administration.
IAE code
It is necessary to indicate the code corresponding to the Economic Activities Tax (IAE), which classifies the activity carried out.
This code can be found in the census of activities published by the Tax Agency and is essential for the fulfilment of tax obligations.
CNAE Code
The CNAE code (National Classification of Economic Activities) identifies the specific economic activity to be carried out.
It is important to choose the correct code, as it impacts on tax obligations and may influence access to grants or subsidies.
Bank Account
A bank account must be opened exclusively for the economic activity.
This account will be used for direct debiting Social Security payments, as well as for managing the income and expenses related to the business.
It is recommended that the account be easily accessible and under favourable conditions.
Social Security registration
Registration with the Social Security is a fundamental procedure for all those who wish to become self-employed.
This procedure guarantees access to social protection and establishes the basis for fulfilling tax and contribution obligations.
Special Regime for Self-Employed Workers (RETA)
The Special Regime for Self-Employed Workers (RETA) is the system that regulates the obligations and rights of self-employed workers in Spain.
Workers who register under this scheme must comply with a series of rules that ensure their inclusion in the social security system.
The main features of the RETA include:
- Contribution to social security through monthly contributions that vary according to the contribution base chosen.
- Access to benefits for temporary incapacity, retirement and other social security benefits.
- Possibility of qualifying for bonuses and reductions in contributions in certain cases.
On-site registration
For those who prefer to carry out the procedure physically, on-site registration with the Social Security is a viable option. This process involves presenting the necessary documentation at the corresponding offices.
The steps to follow include:
- Request an appointment at the Social Security office nearest you.
- Filling in form TA0521, which details the personal details and the economic activity to be carried out.
- Present the required documentation, such as the DNI or NIE and the Social Security Number (NUSS).
It is advisable to have all the documentation organised to avoid inconveniences during the presentation.
Electronic registration
Electronic registration offers a convenient and fast alternative for those who wish to complete the procedure online. Through the Social Security’s electronic headquarters, you can complete the procedure without having to travel.
The steps for electronic registration are as follows:
- Access the Social Security website.
- Identify yourself using a digital certificate, electronic ID or Cl@ve.
- Select form TA0521 and proceed to complete it electronically.
- Make sure you attach all the required documents in digital format.
The use of electronic registration saves time and allows the procedure to be carried out from any location with an Internet connection.
Registration with the Inland Revenue
Registering with the tax authorities is an essential step for those starting their activity as self-employed. This procedure includes the completion of specific forms to notify the tax authorities of the economic activity.
Forms 036 and 037
Forms 036 and 037 are the administrative tools that allow a self-employed person to notify the Tax Agency of their registration. Form 036 is more complete and is used in the following situations:
- For self-employed people who carry out economic activities and register several activities.
- When you need to modify data that has already been registered with the Inland Revenue.
On the other hand, form 037 is a simplified version and is intended for self-employed workers who meet certain requirements, such as:
- Carrying out only one economic activity.
- Not being obliged to file returns for certain tax obligations.
- Not receiving income from other sources.
The correct completion of these forms is crucial, given that the tax segmentation and categorisation of the self-employed in the Spanish tax system will depend on them.
Online and In-Person Filing
Forms 036 and 037 can be filed electronically or in person. The online option is currently the most widely used, offering convenience and efficiency. To do so, you must access the Tax Agency’s electronic headquarters and follow these steps:
- Use a digital certificate or Cl@ve PIN to identify the person filing the form.
- Select the corresponding form and fill it in properly.
- Once completed, send it electronically to the Tax Agency.
In-person filing is still a viable option, especially for those who prefer to deal directly with the Tax Office staff. In this case, the completed form must be printed out and submitted at any Tax Agency office.
Filing Deadline
The deadlines for filing the tax return are strict. The form may be filed up to 60 days before the start of the economic activity. If it is filed outside this period, the registration will be considered effective from the first day of the current month, which may generate a greater financial burden for the self-employed:
- It should be borne in mind that it is advisable to file on the same day that the activity begins.
- Failure to comply with the established deadlines may result in surcharges and penalties that may affect the financial viability of the new self-employed.
For this reason, it is advisable to plan adequately and carry out the formalities in advance in order to avoid unpleasant surprises.
Selecting a Mutual Partner
Choosing a collaborating mutual insurance company is an essential step when registering as self-employed. This entity will be in charge of managing coverage for accidents at work and occupational illnesses, so it is essential to consider several aspects before making a decision.
Coverage provided by the mutual insurance company
The collaborating mutual insurance companies offer various types of cover that may vary according to the economic activity and the needs of the self-employed worker. It is important to analyse the options available and assess which services are most relevant. The most common coverages include:
- Health care for injuries due to accidents at work.
- Financial benefits in the event of sick leave due to occupational illness.
- Rehabilitation and post-accident treatment.
- Guidance and advice on occupational risk prevention.
There are also certain mutual insurance companies that provide additional services, such as health and wellness programmes that can be beneficial for the self-employed.
Types of insurance
The collaborating mutuals offer various types of insurance that are important to guarantee the protection of the self-employed in their work activity. The most relevant ones are presented below:
- Accident insurance: Covers injuries that may occur during the performance of the work activity.
- Occupational Illness Insurance: Provides protection in the event that an illness develops as a result of work.
- Civil Liability Insurance: Protects the self-employed against claims for damages caused to third parties during professional activity.
It is essential to compare the conditions and coverage offered by different mutual insurance companies in order to choose the option that best suits personal and professional needs. Considering the mutual’s track record, the quality of customer service and the speed with which benefits are processed can make it easier to make an informed choice.
Cost of Becoming Self-Employed
The cost associated with registering as a self-employed person is a crucial aspect to consider before starting the economic activity.
These costs include the contribution base and the monthly contribution to be paid to the Social Security, as well as special tariff options for new entrepreneurs.
What is the self-employed quota in 2024?
Contribution Base
The contribution base is the amount on which the contribution to be paid by the self-employed worker will be calculated.
In 2024, this varies according to the regulations in force and is chosen according to the expected income.
The minimum contribution base is 950.98 euros, while the maximum contribution base can be as high as 4,720.50 euros, which also defines the level of future benefits in the event of sick leave or retirement.
Monthly contribution
The amount of the monthly contribution to be paid to the Social Security depends directly on the contribution base selected.
From 2024, the contributions range between 230.15 and 542.12 euros, depending on the base chosen and the activity carried out.
This contribution is intended to cover different aspects, such as access to pensions and temporary incapacity benefits.
The self-employed should bear in mind that if they choose a lower contribution base than recommended, they may face limitations in the coverage of certain benefits.
On the other hand, opting for a higher base may result in higher monthly costs, which should be carefully considered.
Flat Rate for New Self-Employed
To encourage entrepreneurship, the Spanish government offers a flat rate for new self-employed workers.
This scheme allows those who meet certain requirements to enjoy a reduced rate of 86 euros per month for the first 12 months.
If the self-employed person’s income is lower than the Minimum Interprofessional Wage (SMI) in the following year, he/she can benefit from the flat rate for an additional 12 months.
This is an attractive option that eases the financial burden at the start of the professional activity.
However, it is important to comply with the established conditions in order not to lose this benefit and thus make the start of a self-employed career more bearable.
Rights and Obligations of the Self-Employed
The self-employed in Spain have a series of rights and obligations that allow them to carry out their professional activity fairly and within a legal framework.
The main benefits and benefits to which they have access, as well as their tax and social security obligations, are detailed below.
Temporary Incapacity Benefits
Self-employed workers are entitled to access temporary incapacity benefits, which guarantee them financial support in the event of an illness or accident that prevents them from working.
This entitlement is triggered if certain conditions are met.
- The self-employed person must be up to date with Social Security payments.
- The incapacity must be the result of a common or professional illness, or of an accident, whether work-related or not.
- The time needed to access the benefit varies, and it is common to have to wait for a qualifying period.
Retirement
Self-employed persons are entitled to a retirement pension, which is calculated on the basis of the contribution bases they have chosen throughout their working life.
It is important for the self-employed to plan adequately for their retirement in order to guarantee a pension that allows them to maintain their quality of life.
- To be entitled to a full pension, a minimum number of years of contributions must have been paid.
- The amount of the pension is determined on the basis of the years contributed and the bases chosen, and it is advisable to make contributions above the legal minimum.
- There are different schemes that can influence the final amount of the pension, making it easier to adapt to different professional profiles.
Social Security benefits
The self-employed are also entitled to other benefits offered by Social Security, including support in situations beyond disability and retirement.
These benefits are vital to ensure a more secure and stable working environment.
- Access to maternity and paternity benefits, which allow the self-employed to balance family and professional life.
- Protection in the event of unemployment, although this right depends on meeting the requirements set out in the regulations.
- Possibility of access to training and courses that improve professional qualifications, promoting the development of skills relevant to the labour market.