Country Snapshot

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Official Language
Spanish

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Currency
Euro

Ecology Mustard

Economy
14th in the world

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World Zone
Europe

Talent Acquisition

Capital
Madrid
  • Key Facts & Figures

    Location

    Spain is a country on Europe’s Iberian Peninsula, which includes 17 autonomous regions with diverse geography and cultures. Its territory also includes the Canary Islands off the coast of Africa and the Balearic Islands in the Mediterranean Sea.

     

    Population

    Spain’s population is approximately 46 million people.
    Spain ranks as the 14th largest economy with its national GDP valued at $1.44 trillion.

     

  • Economy

    The economy of Spain is one of the largest in the world by purchasing power parity. The country is a member of the European Union, the Organisation for Economic Co-operation and Development, and the World Trade Organisation.

    Also, the Spanish economy is the fifth-largest in Europe behind Germany, United Kingdom, Italy, and France. It is the fourth-largest in the Eurozone, based on nominal GDP.

     

    Trade

    Spain is part of the harmonised trade system of the EU. As such, imports and exports are covered by the EU Taxation and Customs Union.

     

    Top Imports & Exports

    Spain’s most valuable exports are cars, followed by refined petroleum oils, automotive parts or accessories, drugs and medicines, trucks, and olive oil.

    Spain’s number one import product is crude oil, followed by imported cars, auto parts and accessories, medication mixes in dosage, petroleum gases, and refined petroleum oils.

     

    Free Trade Agreements

    Spain has been a member of the WTO since 1 January 1995, and a member of GATT since 29 August 1963. It is a Member State of the European Union. All EU Member States are WTO members, as is the EU (until 30 November 2009 known officially in the WTO as the European Communities for legal reasons).

     

  • Legislation

    Expanding to Spain? Here is a breakdown of the key things to keep in mind.

    Company Setup

    The Spanish market boasts huge potential for business opportunities. Setting up your business in Spain can be done through various methods, such as partnering with an Employer of Record or ETT (Empresa de Trabajo Temporal) to outsource employment, opening a representative office, setting up a branch, or establishing a subsidiary in Spain.

    Curious to simplify setup and best understand Spain’s legislative frameworks around company registration? Click here for more information.

     

    Payroll

    In Spain, the personal income tax is called the IRPF. It works following a dual system and is levied both at the national and municipal level. Therefore, Spanish income tax rates are different from one region to another.

    The deadline to submit tax assessments can vary. Generally, taxes must be filed by the 20th of each month or by the 20th of each month following the end of a quarter. Late penalties and other fees may apply.

    Non-resident companies are eligible for a special Tax Regime by the Spanish Government. To comply with Spanish regulations, all companies must register at the Tax Office (Agencia Tributaria) to get a Tax Identification Code. To learn more, click here.

     

    Employment

    Employment in Spain is highly regulated and very protective of employee rights. Temporary contracts are the most common. Indefinite or permanent contracts are quite rare and difficult to obtain in the current economic climate. Both have minimum employment terms and conditions that employers must observe.

    There are 3 types of workers; general employees, executives, and self-employed who have their separate regulation and jurisdiction.

    The probation period is not compulsory in Spain, but it could be required, depending on companies’ policy.

    However, in Spain, as jobs are grouped into categories, each category can have its own set of regulations. To learn more, download our eBook here.

     

    Immigration

    Everyone outside the EU/EEA states and Switzerland requires a work permit to work freely in Spain. The employer needs to request the work permit on the employee’s behalf; however, it might take up to 8 months to process. Once the work permit has been granted, the employee must apply for a residence Spanish visa.

    After arriving in Spain, foreign workers must:

    – Register in the corresponding Social Security scheme.

    – Apply for a foreigner identity card (NIE).

    For more information on this, continue reading here.

     

    Tax

    As with many European countries, the Tax Year runs on the calendar year, from the 1st of January to the 31st December.

    The general rate of company tax is 25% and must be filed within 6 months and 25 days after the end of the accounting period.

    Companies pay social security tax equal to 29.9% of the employee’s salary, up to a salary threshold of EUR 3,596.98. Moreover, employees are also liable to pay social security contributions.

    The national sales tax on goods and services is known as the IVA, which is 21%,

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