Since the Startup Law (Law 28/2022), Spain offers a specific visa for remote workers aimed at professionals from outside the European Economic Area. This visa allows them to legally reside in the country while providing professional or employment services to foreign companies.
One of the most common applicant profiles is that of UK entrepreneurs working for their own company, who want to relocate to Spain to continue working remotely. In these cases, a key question arises: Should they apply as employees of their company or as self-employed workers registered in Spain?
In this article, we explain the differences between both options, the advantages and disadvantages of each, and the aspects you should consider to make the best decision based on your personal situation, tax planning, and long-term plans in Spain.
Can You Choose Between Applying as an Employee or as a Self-Employed Worker?
Yes. Law 28/2022 allows digital nomad visa applications either as an employee or as a self-employed professional, provided certain conditions are met:
- You must work remotely for a company or clients located outside Spain.
- You must prove a professional or employment relationship of at least three months prior to applying.
- You must hold a university degree, vocational training, or at least three years of professional experience in your field.
- You must earn monthly income equivalent to 200% of the IPREM (in 2025, approximately €2,763/month).
However, the legal form you choose to declare your activity—employee or self-employed—has very different implications in terms of social security contributions, taxation, application timelines, and permit duration.
For more information on the application process, you can read our article: “How to Apply for the Digital Nomad Visa in Spain Step-by-Step Guide.”
Option 1: Applying as an Employee of Your Own UK Company
This is a common route for UK entrepreneurs with a limited company who wish to maintain employee status and continue paying National Insurance in the UK. For this, your company must formally employ you and justify the continuity of the employment relationship.
What does this involve?
- You must submit a real employment contract, signed by the UK company, authorizing you to work remotely from Spain.
- You can apply for the A1 Certificate from HMRC (Her Majesty’s Revenue and Customs), which allows you to continue contributing to the UK social security system for up to two years minus one day. This exempts you from registering as self-employed in Spain during that period.
- You can also request the S1 Form, which grants you access to Spain’s public healthcare system without needing private insurance.
We recommend reading our article “How to Apply for the A1 Certificate in the UK if You’re Going to Work Remotely from Spain” for detailed guidance on that procedure.
Main Advantages
- You avoid paying into the Spanish Social Security system for the first two years, which can be a significant saving, especially if your income is low or moderate.
- Free access to Spain’s public healthcare system through the S1 form, covering both the applicant and their spouse and children, removing the need for private health insurance required under general visa rules.
- Simplified tax procedures: as an employee, you will be taxed as a Spanish tax resident, but you don’t need to file quarterly VAT returns, income tax withholdings, or advance payments. You’ll only need to file an annual tax return.
- Lower administrative burden, making the transition to life in Spain smoother. As an employee, you avoid the complexity and stress of the self-employed regime (tax models, invoicing, bookkeeping, etc.).
- You can apply for the P85 form in the UK along with the NT (No Tax) code, which prevents income tax withholding on your salary in the UK. Although this doesn’t reduce your overall tax burden (since you’ll be taxed in Spain), it can improve your monthly cash flow and potentially earn interest on savings or investments.
Disadvantages to Consider
- The A1 certificate can take up to three months to process. Without it, you cannot prove exemption from Spanish social security contributions.
- The A1 is non-renewable beyond two years. After that, you must register as self-employed in Spain or return to the UK.
- The initial visa permit is valid for only two year, compared to the three-year validity granted to self-employed applicants. This means earlier renewal and additional procedures and costs.
Option 2: Applying as a Self-Employed Professional
In this case, the applicant applies as an independent professional who provides services to clients—typically their own UK company and other foreign clients—and registers in Spain’s Special Regime for Self-Employed Workers (RETA).
What does this involve?
- Immediate registration with the Spanish Social Security system, granting access to healthcare, public pension, sick leave, etc.
- Tax registration as a self-employed worker with the Spanish Tax Agency (Hacienda), with obligations to file quarterly and annual tax forms.
- Proof of stable income through invoices, contracts, or other documents showing ongoing relationships with foreign clients.
Main Advantages
- Initial permit for 3 years, compared to just 12 months under the employee route. This offers greater stability and fewer renewals.
- Reduced social security contribution in the first year: just €80/month. In some autonomous communities, this may even be fully refunded.
- Maximum contribution capped at €542.13/month from the second year onward, regardless of income—ideal for high earners.
- Greater legal and fiscal consistency for long-term stays in Spain. If you plan to remain for more than two years, this option better aligns with your situation.
Disadvantages to Consider
- Higher tax and accounting burden: as a self-employed professional, you must file forms such as 130 (IRPF), 303 (VAT), and 111 (withholdings)—typically requiring the support of a tax advisor.
- Advance income tax payments: 20% of your estimated profits must be paid quarterly.
- Spain has a stricter tax regime than the UK: fewer deductions and more frequent penalties for mistakes.
- No access to A1 or S1 certificates: your entire healthcare and social protection coverage depends on your compliance with Spanish obligations.
What About Taxes? Do You Pay the Same?
Yes. If you are a tax resident in Spain (i.e. you spend more than 183 days a year in the country), you will be subject to the same income tax rates (IRPF) whether you’re employed or self-employed. These rates range from 19% to 47%, depending on your income.
The only difference is how and when you pay:
- Self-employed: quarterly tax payments and an annual tax return.
- Employee: withholding from your salary (if applicable) or an annual return.
Using the NT (Non-Taxable) code in the UK can help avoid double taxation by preventing UK tax withholding, while you pay tax as a Spanish resident. However, it’s crucial to understand the UK-Spain double tax treaty to ensure proper compliance.
As for the Beckham Law (expat tax regime), it generally does not apply to those who own their own company—unless they significantly restructure the business, which is rare. Therefore, most likely, you will be taxed under the standard IRPF scale (19% to 47%).
Conclusion: Which Option Is Best for You?
If your stay in Spain will be temporary (less than two years), you want to minimize costs, and your company can process the A1 and S1, applying as an employee might be a good short-term option.
If you plan to stay longer, prefer greater stability, and want to align your legal and tax status in Spain from the beginning, applying as a self-employed worker is the more advisable route.
In any case, it is essential to seek expert advice in international taxation and immigration law to structure your application properly, avoid mistakes, and ensure your digital nomad relocation project in Spain is a success.
