Starting a Business in Spain as a UK Expat: Autonomo and SL Options

Can UK Citizens Start a Business in Spain After Brexit?

Yes. Brexit changed immigration rules, but it didn't remove the right to set up a business in Spain. To work legally (whether employed or self-employed), you need a work permit — either through a self-employment visa, a digital nomad visa, or by becoming a Spanish resident with the right to work. Once you have the correct residency/visa status, the process of setting up a business is the same as for Spanish nationals.

This guide covers the two main business structures available: working as an autonomo (sole trader/freelancer) or setting up an SL (Sociedad Limitada — the Spanish equivalent of a UK limited company).

Autonomo: Spain's Sole Trader

An autonomo is the simplest way to work for yourself in Spain. It's the Spanish equivalent of being a sole trader in the UK, and it's how most expats start.

Who Should Be an Autonomo?

• Freelancers and consultants
• Sole traders (plumbers, electricians, cleaners, personal trainers)
• Small business owners with no employees (or just one or two)
• Remote workers billing international clients through a Spanish entity
• Anyone with annual turnover under approximately 100,000 - 150,000 EUR where the simplicity of autonomo outweighs the tax advantages of an SL

Registration Process

1. Get your NIE — you need your Numero de Identidad de Extranjero (foreigner's identification number) before anything else. If you're buying property, you'll already have one. If not, read our NIE guide
2. Register with Hacienda (tax agency) — submit Form 036 or 037 (simplified version) at your local Agencia Tributaria office. This registers you for tax purposes and assigns your IAE (activity code) — the classification of your business activity
3. Register with Social Security (TGSS) — submit Form TA.0521 to register as an autonomo. This starts your social security contributions
4. Open a Spanish bank account — technically not legally required to be separate from personal, but strongly recommended. Most banks require your NIE, proof of autonomo registration, and proof of address

The entire process can be completed in 1-2 weeks if you have all documents ready. Most expats use a gestor (see below) to handle it.

Social Security: The Cuota de Autonomo

This is the single biggest shock for UK expats. Every autonomo in Spain pays a monthly social security contribution (cuota) regardless of whether they earn anything that month.

Since the 2023 reform, contributions are based on your actual net income (sistema de cotizacion por ingresos reales):

Monthly Net Income	Monthly Cuota (2026 approx.)
Up to 670 EUR	230 EUR
670 - 900 EUR	260 EUR
900 - 1,166 EUR	275 EUR
1,166 - 1,500 EUR	294 EUR
1,500 - 1,700 EUR	294 EUR
1,700 - 1,850 EUR	310 EUR
1,850 - 2,030 EUR	315 EUR
2,030 - 2,330 EUR	320 EUR
2,330 - 2,760 EUR	330 EUR
2,760 - 3,190 EUR	350 EUR
3,190 - 3,620 EUR	370 EUR
Above 3,620 EUR	390 - 590 EUR

The Flat-Rate First 2 Years (Tarifa Plana)

New autonomos can benefit from a reduced flat rate for the first two years:

• First 12 months: 80 EUR per month (regardless of income)
• Months 13-24: 80 EUR per month if net income is below the minimum wage

This is a significant saving. At 80 EUR per month instead of 300+ EUR, you save over 2,600 EUR in the first year alone. The tarifa plana is available to anyone who hasn't been registered as an autonomo in Spain in the previous 2 years.

What the Cuota Covers

Unlike the UK's relatively modest National Insurance, Spain's cuota is substantial but covers a lot:

• Public healthcare — full access to the Spanish public health system for you and your dependants
• Pension contributions — towards a Spanish state pension
• Sick pay — from day 4 of illness (previously day 16, improved in recent reforms)
• Maternity/paternity leave — 16 weeks paid leave
• Cessation of activity — a form of self-employed unemployment benefit (introduced in recent years)

SL (Sociedad Limitada): Spain's Limited Company

An SL is the Spanish equivalent of a UK Ltd. It's a separate legal entity with limited liability — your personal assets are protected if the business fails.

When to Choose an SL Over Autonomo

• Higher income — when net profits exceed approximately 40,000 - 50,000 EUR, the SL's flat corporation tax rate (25%, or 15% for the first 2 years) becomes more advantageous than the autonomo's progressive income tax (up to 47%)
• Multiple partners/shareholders — an SL can have multiple owners with defined shareholdings
• Liability concerns — if your business carries significant risk, limited liability protects personal assets
• Professional image — some clients and suppliers prefer dealing with an SL rather than an autonomo
• Planning to hire employees — while autonomos can hire, an SL is better structured for growth

Setting Up an SL

1. Reserve the company name — apply to the Registro Mercantil Central. Takes 2-5 days. Cost: approximately 20 EUR
2. Open a bank account in the company name — deposit the minimum share capital of 1 EUR (reduced from 3,000 EUR since the 2022 reform, though 3,000 EUR is still standard practice)
3. Draft the articles of association (estatutos) — your gestor or lawyer prepares these
4. Sign the deed of incorporation (escritura de constitucion) — before a Spanish notary. All shareholders must attend (or grant power of attorney). Cost: 300 - 600 EUR
5. Register with the tax agency (Hacienda) — obtain the company CIF (tax identification number)
6. Register at the Commercial Registry (Registro Mercantil) — makes the company officially exist. Cost: 150 - 300 EUR. Takes 1-3 weeks
7. Register as the company's administrador (director) with Social Security — the director of an SL typically also pays the autonomo cuota

Total setup cost for an SL: approximately 800 - 2,000 EUR including notary, registry, and professional fees. Timeline: 3-6 weeks.

Tax Obligations

Autonomo Tax

• IRPF (income tax) — progressive rates from 19% to 47%. Filed annually (Renta declaration) with quarterly advance payments (Form 130)
• IVA (VAT) — standard rate 21%. Filed quarterly (Form 303) and annually (Form 390). Some professional activities are IVA-exempt
• Retenciones — if invoicing Spanish businesses, they withhold 15% IRPF (7% in your first 3 years) and pay it directly to Hacienda on your behalf. This is credited against your annual tax

SL Tax

• Impuesto de Sociedades (corporation tax) — 25% flat rate (15% for the first 2 years of a new company)
• IVA — same as autonomo, quarterly declarations
• Director's salary/dividends — paying yourself a salary is an allowable company expense (reducing corporation tax) but subject to IRPF and social security. Dividends are taxed at 19-26%
• Annual accounts — SLs must file annual accounts with the Registro Mercantil

The Gestor: Your Essential Business Partner

A gestor (administrative manager/tax advisor) is practically essential for anyone running a business in Spain. Spain's bureaucracy is notoriously complex, and a good gestor will:

• Handle your registration — autonomo or SL setup, Hacienda, Social Security
• File your quarterly tax returns — IVA, IRPF advance payments, company returns
• File your annual tax return — Renta (personal) and/or Impuesto de Sociedades (company)
• Manage payroll — if you have employees, they handle contracts, payslips, and social security
• Keep you compliant — Spain's regulations change frequently. A gestor ensures you don't miss deadlines or new requirements

Cost: 80 - 200 EUR per month for a sole autonomo, 150 - 400 EUR per month for an SL (more if you have employees). English-speaking gestors are common on the Costa del Sol. This is not a cost to cut — the penalties for late filing or errors in Spain are severe.

Popular Expat Businesses on the Costa del Sol

The Costa del Sol's large expat community creates demand for English-language services. Businesses that commonly work well:

• Property management and rental services — key holding, cleaning, guest management for holiday lets
• Construction and trades — English-speaking builders, electricians, plumbers are in high demand
• Real estate agency — helping other UK buyers navigate the market
• Health and fitness — personal training, yoga, pilates, wellness coaching
• Food and hospitality — cafes, restaurants, catering (high competition, high failure rate — go in with eyes open)
• Digital services — web design, marketing, SEO, social media management
• Education — English teaching, tutoring, language academies
• Legal and financial services — tax advisors, lawyers, mortgage brokers serving the expat community

Digital Nomad Considerations

If you're working remotely for UK or international clients, Spain's digital nomad visa offers a compelling alternative to the standard autonomo route:

• 15% flat tax rate for the first 4 years (vs progressive rates up to 47%)
• No need to register as autonomo if employed by a foreign company — your employer handles payroll under a simplified regime
• If freelancing under the digital nomad visa — you may still need to register as autonomo for Social Security purposes, but the tax advantage is significant

The digital nomad visa requires that less than 20% of your income comes from Spanish clients, so it's not suitable if your primary market is Spanish businesses or consumers.

Key Takeaways

• Choose autonomo for simplicity and lower setup costs; choose SL when profits exceed 40,000-50,000 EUR or you need limited liability
• Budget for the cuota (social security) from day one — it's payable even in months with zero income
• Use the tarifa plana (80 EUR first year) if you're eligible — it's a significant saving
• Hire a gestor — the cost is modest relative to the complexity they manage and the penalties they help you avoid
• Factor in IVA (VAT) — you'll charge 21% and can reclaim IVA on business expenses
• Get the right visa/residency first — working in Spain without proper authorisation carries serious penalties

If you're exploring a move to the Costa del Sol with business ambitions, join the MUNDO Buyer Club for introductions to verified agents, lawyers, and gestors who specialise in helping UK expats set up successfully in Spain.