Starting a business in Spain, where do you start?
So many people dream of moving abroad, but the biggest barrier is usually income. How are you going to earn money overseas, if you have no job lined up? I moved to Valencia, Spain in 2018 with no clear idea of where my income was going to come from. I had left a lovely role back in Scotland, as marketing manager for a multi-arts centre, and I was hoping to somehow find something similar in my new home town. Little did I know, that apart from having to be fluent in Spanish (and Valencian, often the spoken language in the public and cultural sector), getting jobs in Spain is all about whom you know. I had neither of those benefits, so I had to think of an alternative. How was I going to earn money?
So working as an employee in the arts was no longer an option, but I knew I could write. I had also set up my own business before, and I knew how to market myself. So I decided to set up as a freelance copywriter. I promoted myself on social media, and on freelancer platforms Fiverr and Upwork, and soon had a steady stream of international clients to pay for my services.
Be flexible and try things out
I since have branched out and launched The Creative Business Coach, because you can’t keep a true creative soul away from creatives. Writing about lease cars and light bulbs gets a little boring after a while (yes, it does!), and I knew I had a lot of knowledge to share with people who needed it. The copywriting was an easy way to start earning money in Spain as a foreigner, and I had to be flexible when first arriving in Spain without work. But after three years I knew it was time to pivot the business.
My point: you can work anywhere! With the right mindset, attitude and flexibility you too can move abroad and generate an income. You just have to get rid of the fear, prepare well, and take it one step at the time. I know a lot of people dream about moving to a sunny country, and don’t think it is possible for them. But it is, as long as you do your homework. How do you start a business in Spain?
Valencia, the best city for expats!
Valencia has been crowned number #1 city for expats in the world last year, in a research done by InterNations. I am biast, of course, but I agree. Valencia is great. My husband asked me the other day:”Why do you love it here so much?” It’s everything. It’s the perfect mix of beaches, parks, culture, history and a vibrant big city atmosphere. Oh, and a fantastic climate with plenty of sunshine. I felt almost immediately at home, when we moved here in 2018.
You find plenty of expats here who have their own online business, or have a remote work contract with their employer overseas. This, of course, is ideal, as you can pretty much live anywhere as a ‘digital nomad’. Especially non EU-citizens often have this construction set up when moving to Spain, as with a ‘non-lucrative visa’ you are allowed to live here longer than three months, as long as you don’t take a job in Spain. Remember, even if your business is registered overseas, or you have a work contract abroad, you still have to declare your annual income to the taxman in Spain – this is law, when you live here for more than 183 days a year.
Starting a small business in Spain as autónomo
What you see most, however, is that expats are starting up a small business in Spain as self-employed or ‘autónomo’. It is not easy to make your way into the Spanish working world if you don’t have the contacts (it’s very much a ‘who you know’ kind of system), but there are thousands of expats living here, who could well be your ideal client. Just see in the Facebook expat groups how many people are asking for an ‘English-speaking’ (fill in the blank: builder, carpenter, taxi-driver, babysitter, cleaner, hairdresser, teacher, fitness instructor, chauffeur, doctor, psychologist, accountant…). The options are endless.
If you have a skill, monetise it! Most people start out working for cash only, to see if there is a market for their services. Once the business is growing, or when customers need invoices, you have to register as ‘autónomo’ with the tax office.
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To register as autónomo, I recommend you contact a relocation agency, or someone else who knows about this kind of thing, as it’s a bit complicated. They can accompany you to the tax office, help with the language and documents required, and it just takes the headache out of things. To be honest, I find all things to do with taxes in Spain complicated, and would also advise anyone to hire an accountant (‘gestor’) to do the quarterly VAT returns for you, as well as the income tax. The VAT rate is 21%. The income withholding tax (or IRPF) is 20%.
What are the fees for an autónomo in Spain?
If you are starting a business in Spain, there is a “flat fee” for new autónomos for the first two years, which makes it much more accessible for new entrepreneurs to get started and grow their business. Paying this fee gives you access to Spain’s public health service, you start building up a government pension, and you have the right to maternity pay and benefits when you somehow become incapable of working. The fee is normally €50 a month for the first year. For the next six months, the fee goes up to €137.97; and the last six months of the second year, the fee will increase again to €192. Self-employed workers in Spain who have been registered for a period of more than two years pay a minimum monthly fee of €286.10 euro.
These fees are the same as in 2020 and are not subject to review/change until 1 June 2021. The general autónomo fee in Spain will then be set at €289 a month. When you register as an autónomo, you can choose to pay the minimum fee or pay more than what you owe to slightly increase your government pension in the long term. Most people opt for the minimum fee and start a private pension scheme under their own conditions.
How to get clients in Spain for your business
If your ideal client is local, then find out where they hang out – online and offline. The expat groups on Facebook are a good way to promote your business, in any of the weekly ‘promo threads’, or do some ‘bread crumbing’, which means replying to other people’s comments by being helpful and more subtly mentioning your business. Also, when possible, try and attend networking events around town. There are a lot of coworking spaces in Valencia, and some of them organise events where it’s great to mingle with other entrepreneurs.
If your business is completely online, then it’s a different matter. Depending on where your ideal client hangs out, tell your story, and share your message consistently on social media, your blog, and through email lists. For freelancers, there are also very useful platforms out there to offer your services, including Upwork and Fiverr. Other ideas are selling products online, setting up an online store, or writing e-books, teaching online courses and offering your 1-to-1 services through Zoom.
I know plenty of expats here in Valencia who have found their niche, and offer their services online, such as yoga teachers, nutrition experts, life coaches, and psychologists. With the internet, the possibilities are really endless, and the world is your oyster – while working from your laptop in sunny Valencia.
Marketing support for expat businesses
If you are a small business and need marketing help, feel free to check out my services (I offer 1-to-1 coaching and group courses, as well as copywriting services). You can also join my Facebook community for free daily marketing and business tips and support, and regular live training.