Working in Spain
Finding work as an expat in Spain may require a magnifying glass and a barrel of patience, and those already working in Spain would do well to hold onto their jobs.
Following the 2008 financial crisis, the unemployment rate reached its peak at 27 percent in 2013. Although unemployment has decreased slightly, Spain still has one of the highest rates of unemployment in the European Union (EU).
Despite recent indications that economic growth is returning to the country, jobs in Spain are sparse and competition for even the most menial positions can be heated.
The national government even created financial incentives to encourage jobless foreigners already in the country to return to their homeland.
Furthermore, due to the world recession, the Spanish economy is heavily in debt, leading to measures that cut civil sector wages and froze civil sector pensions to encourage economic recovery.
Not to mention, the country’s strict policies protecting workers rights means that many stay in their positions long-term and turnover rates remain low – creating a limited amount of openings.
This can certainly work to an expat’s advantage once they secure viable employment. Severance pay is extremely high and can run up to six weeks for every year worked.
Additionally, if an employee is dismissed from a position they still have 20 days to file for conciliation and recover their job. To be entitled to Spanish rights expats would, however, need to sign a contract for a duration of more than six months.
Non-EU citizens need a work permit to be legally employed in Spain but EU citizens and EEA citizens do not need a work permit.
Finding a job in Spain
Those lucky enough to secure employment prior to arrival will thankfully avoid the crunch of the job hunt, but the many who arrive in the country with little more than “a glass half full” of optimism will quickly discover that finding work can be more difficult than they anticipated.
The job prospect horizon will broaden tremendously for those with a clear command of the Spanish language. If an expat happens to know German they will find that there are even more opportunities to be filled – especially with real estate agencies, travel companies and tour operators.
Otherwise, English-speaking expats should strongly consider taking a Teaching English as a Foreign Language (TEFL) course or something similar, in order to take advantage of the demand for teachers in private enterprises and language schools.
The recession has also affected the jobs generated by and for the English-speaking community of retirees that has set up camp on Spain’s eastern and southern seaboard. Even restaurant, bar and other positions in this informal seasonal sector are less plentiful.
Overall though, the tourism and construction sectors are Spain’s most important industries and are the best areas to look for employment.
The country has also historically attracted large interest from entrepreneurs looking to set up their own businesses. Anyone planning to migrate to Spain to do so should, however, hire a local gestor to help them negotiate the sticky bureaucracy spun from Spain’s web of rules and regulations.
Qualifications obtained in Europe and the UK are widely recognised. Salaries are generally less than in the UK and northern Europe, but the standard of living is higher and the cost of living is lower.
Furthermore, typical Spanish working hours include a two-hour break for lunch in the afternoon.
Being self-employed in Spain
Given the poor state of the economy, a lack of planning or a reluctance to accept the lower wages typical of the Spanish workplace, many expats have had to turn to self-employment to work in Spain – many finding success in the IT sector or in improvements and repairs.
The actual process of working as a self-employed person in Spain (known as an autonomo) is quite straightforward, but expats interested in doing so will need a financial consultant called an asesor to help them get established, handle their income tax returns and IVA (the Spanish equivalent of value-added tax).
Anyone from another EU country can come to Spain and start work without any special requirements, but this is not the case for non-EU nationals, who will need to obtain a Cuenta Propia permit to legally do this kind of work.
Additionally, being self-employed legally requires contributions to the health and pension system, the cost of which increases as the expat gets older. There is no sliding scale of contributions whereby someone pays more as they earn more. This is obviously a barrier if someone aims to set up a business and does not have much money behind them.
Earnings tend to be lower in Spain than in the UK, and the contributions required each month from the get-go is costly. Expats will also need to take into account that their asesor will charge them for their three-monthly IVA returns and a yearly tax return. Thus, expats planning on raking in the cash as a self-employed worker should think twice; since it is going to cost several thousand euros a year just to operate legally.
Expats can also choose to increase their monthly contribution payments to provide for unemployment and sickness benefits.
Exploiting the self-employed system
In some cases people will register as an autonomo to get access to the cheap public healthcare system. These people do not have a contract of employment, a requirement of the Spanish public system if someone wants coverage for themselves and their family, and they also don’t want to pay expensive private health insurance premiums.
Though this may seem an easy loophole to exploit, it is not. People who register as self-employed, but never actually do any work and never file their tax and IVA returns are soon investigated. The authorities will want to know how the individual is sustaining themselves if they are not showing any earnings.
The underground economy in Spain is booming, and authorities assume that someone is working for cash if they are not issuing invoices. An expat could easily be fined and, if they ignore communications, in the most serious of circumstances there may be an embargo placed on their house.
Being self-employed illegally in Spain
As there are a number of prohibitive costs attached to being self-employed in Spain, people often choose to do work for others without formally registering as self-employed. This is a common occurrence within both the local and expat population.
Expats who choose this path should realise that if they are not working on a formal autonomo basis, they will not be able to issue invoices, and any work they do will be technically illegal.
They will not, therefore, be able to work for companies who prefer legal routes. Thus, it is unlikely that expats working illegally will find continuous employment, and it is pretty certain that they will find themselves only doing jobs for private individuals, as a registered company will not take the risk of paying someone in cash only.