Key Takeaways
- Under €40k net profit/year: stay autónomo. The tarifa plana (€80/month for 12 months) and simpler quarterly administration make it the clear winner at lower income levels.
- €40k–€60k: model it with a gestor. An SL starts making tax sense here, but setup costs of €3,000+ and ongoing accounting at €200–€300/month eat into savings — the math depends on your specific numbers.
- Over €60k: seriously consider an SL. Corporate tax at 25% meaningfully beats personal IRPF marginal rates of 37–47% (plus Andalucía’s regional surcharge of 0.5–3.5%), especially if you can retain earnings rather than extracting everything.
- Multiple founders or outside investors: SL is the only realistic option. Autónomo cannot accommodate shared ownership structures.
- Keeping a UK Ltd or US LLC while living in Spain doesn’t protect you. Spanish tax residency applies if you live and work here — the structure of your foreign company is irrelevant to Hacienda’s jurisdiction.
The €300/month question
The first number everyone hears about being self-employed in Spain: €300/month in social security contributions. Before you’ve earned a euro.
Within this guide
Quick Answer: Which Should You Choose?
- Net profit under EUR 40,000/year → Stay autónomo. The tarifa plana (EUR 80/month for 12 months) and simpler administration make it the clear winner.
- Net profit EUR 40,000-60,000/year → Run the numbers with a gestor. The SL starts making tax sense here, but setup costs (EUR 3,000+) and ongoing accounting (EUR 200-300/month) eat into savings.
- Net profit over EUR 60,000/year → Seriously consider an SL. Corporate tax at 25% beats IRPF marginal rates of 37-47%. Liability protection matters at this revenue.
- Multiple founders or outside investors → SL is the only realistic option.
It’s real. It’s also not the whole story. And for many expats, it’s not even the right comparison — because the question isn’t “should I register as autónomo” but “which Spanish structure fits my situation.”
Here’s how to think about it.
The two main paths
If you’re working for yourself in Spain, you have two realistic options:
Autónomo— Self-employed individual. Simpler setup, simpler administration, direct taxation on your personal income.
Sociedad Limitada (SL)— Limited company. More complex setup, more administration, but potential tax advantages at higher incomes and liability protection.
There’s a third option people try: keeping your UK Ltd or US LLC and pretending you’re still based there. We’ll get to why that doesn’t work.
Autónomo: The default path
Autónomo — literally “autonomous” — is Spain’s self-employment regime. You register with social security (Seguridad Social) and the tax agency (Hacienda), and you’re in business.
2026 costs
Social security contributions:| Year of Registration | Monthly Amount |
|———————|—————-|
| Year 1 | €80/month (tarifa plana discount) |
| Year 2 | €80/month (extended discount) |
| Year 3+ | Based on income (see below) |
After the discount period ends, contributions scale with your declared income:
| Monthly Net Income | Monthly Contribution |
|——————-|———————|
| Under €670 | €230 |
| €670-900 | €260 |
| €900-1,166 | €275 |
| €1,166-1,500 | €291 |
| €1,500-1,850 | €294 |
| €1,850-2,030 | €350 |
| Over €2,030 | €390-530+ |
New progressive system introduced 2023, rates verified January 2026.
What you get for those contributions:- Public healthcare (you’re paying into social security)
- Pension accrual
- Sick leave coverage (after 4 days)
- Maternity/paternity leave
- Unemployment coverage (limited)
Income tax (IRPF)
Your profits get taxed progressively:
| Income Bracket | Tax Rate |
|—————-|———-|
| Up to €12,450 | 19% |
| €12,450-20,200 | 24% |
| €20,200-35,200 | 30% |
| €35,200-60,000 | 37% |
| €60,000-300,000 | 45% |
| Over €300,000 | 47% |
Plus any regional surcharge (Andalucía adds 0.5-3.5% depending on income).
The quarterly cycle
As autónomo, you file:
- Modelo 130— Quarterly income tax advance (20% of profit)
- Modelo 303— Quarterly VAT (IVA) if you charge it
- Modelo 111— Quarterly withholdings if you pay contractors
- Modelo 100— Annual income tax return (April-June)
- Modelo 390— Annual VAT summary
Most expats use a gestor — tax agent— for this. Budget €50-80/month for straightforward situations.
Sociedad Limitada (SL): The company path
An SL is a limited liability company — similar to a UK Ltd or US LLC in concept, though structurally different. You’re an employee of your own company, which creates separation between business and personal income.
Setup costs
| Item | Cost |
|——|——|
| Minimum share capital | €3,000 (must remain in company initially) |
| Notary and registration fees | €400-600 |
| Legal/gestor setup fees | €300-800 |
| Total to get started | ~€4,000-4,500 |
Ongoing costs
| Item | Monthly Cost |
|——|————-|
| Gestor/accountant | €150-250 |
| Social security (as administrator) | €350-400 |
| Business insurance (optional) | €50-150 |
| Bank fees (business account) | €20-50 |
| Total monthly overhead | ~€600-850 |
Before you’ve earned anything.
The tax math
Company profits are taxed at corporate rates:
| Profit Level | Rate |
|————–|——|
| First €50,000 (small business) | 23% |
| Above €50,000 | 25% |
Reduced rate for first two years if certain conditions met: 15%.
But here’s the thing: you still need to get money out of the company and into your personal account. That happens through:
Salary:Subject to income tax (IRPF) and social security — just like if you worked for someone else.
Dividends:Taxed at 19-26% depending on amount, plus the company already paid corporate tax on those profits.
The combined effective rate (corporate + dividend) can end up higher than autónomo for moderate incomes.
The €40,000 inflection point
Here’s the math that matters:
Below €40,000/year net profit:Autónomo almost always wins. Lower overhead, simpler administration, tax rates aren’t punishing yet.
€40,000-60,000:Marginal. SL might save you money depending on how you structure salary vs. dividends. Probably not enough to justify the added complexity unless you need liability protection.
Above €60,000:SL becomes interesting. You can cap your personal salary (and therefore high IRPF brackets), retain profit in the company at 23-25%, and withdraw via dividends over time.
Above €100,000:SL is usually better structurally. The 45%+ personal tax rates for autónomos at this level make corporate structuring worth the overhead.
Three case studies
Case 1: Remote freelancer earning €35,000/yearAutónomo:
- Social security: €275/month × 12 = €3,300
- Income tax (rough): €5,500
- Gestor: €75/month × 12 = €900
- Total tax + costs: ~€9,700- Take-home: ~€25,300SL:
- Minimum overhead: €600/month × 12 = €7,200
- Corporate tax + personal tax on salary: ~€6,000
- Total tax + costs: ~€13,200- Take-home: ~€21,800Autónomo wins by €3,500/year.
Case 2: Consultant earning €70,000/yearAutónomo:
- Social security: €400/month × 12 = €4,800
- Income tax (rough): €20,000
- Gestor: €100/month × 12 = €1,200
- Total tax + costs: ~€26,000- Take-home: ~€44,000SL:
- Overhead: €700/month × 12 = €8,400
- Pay yourself €30,000 salary (lower IRPF bracket)
- Corporate tax on €40,000 retained: €9,200
- Personal tax on salary: €5,000
- Total tax + costs: ~€22,600- Take-home: ~€47,400(with €31,000+ retained in company)
SL wins if you’re comfortable leaving money in the company.
Case 3: Agency owner earning €150,000/yearSL is clearly better. You’d pay 47% on everything above €60,000 as autónomo. With an SL, you control the extraction timing and method.
The “I’ll just keep my UK Ltd” mistake
Common plan: keep your UK company, invoice clients through it, pay yourself a low UK salary, pretend you’re still UK tax resident.
Why it fails:1. You’re tax resident where you live.183+ days in Spain, or your center of vital interests here, means Spanish tax residency. Your worldwide income — including what your UK company pays you — is taxable in Spain.
Permanent establishment.If your UK company’s only activity is invoicing for work you do from Spain, Spain may argue the company has a permanent establishment here. That means Spanish corporate tax on profits.
HMRC and Hacienda talk to each other.CRS (Common Reporting Standard) means automatic information exchange between tax authorities. Your UK bank accounts are reported to Spain.
Penalties compound.Getting caught late means back taxes, interest, and penalties. Spain is aggressive about undeclared foreign structures.
The legal version:Some people genuinely split time between countries and have real UK business activities. That’s different. But “I work remotely from Málaga for my UK company” is not a gray area — it’s straightforwardly Spanish tax residency.
The decision flowchart
Are you earning over €50,000/year?- No → Autónomo. Don’t overcomplicate.
Do you need liability protection?(Clients could sue, contracts are large)
- Yes → Consider SL.
- No → Continue.
Are you earning over €80,000/year?- No → Autónomo probably still fine.
- Yes → SL likely makes sense. Consult a tax advisor.
Do you have partners or investors?- Yes → SL. Autónomo is personal by definition.
Are you planning to sell the business eventually?- Yes → SL. Much cleaner to transfer company shares than wind up autónomo.
Spanish-lite
When meeting with a gestor about structure:
¿Me conviene ser autónomo o crear una SL? — Is it better for me to be self-employed or create a limited company?¿A partir de qué facturación merece la pena una SL? — At what turnover level does an SL become worthwhile?Gets you to the numbers conversation faster.
Common mistakes
Overcomplicating early:Don’t create an SL until you’re consistently earning €60,000+. The overhead eats your margins.
Underestimating autónomo costs:€80/month sounds manageable. €300-400/month after the discount period ends is real money if you’re having a slow quarter.
Ignoring the gestor relationship:Your gestor structures your declarations. A good one saves you money. A bad one costs you more than their fee in mistakes. Interview several.
Assuming UK/US structures work:They don’t. If you live here, you’re taxed here. Plan accordingly.
The bottom line
For most expats starting out self-employed in Spain: begin as autónomo. The €80/month first-year discount gives you runway to build income. If you’re still under €50,000/year after year two, stay autónomo. If you’re over €80,000/year, get proper tax advice on an SL.
The €300/month social security baseline is real. So is the healthcare, pension, and sick leave you get for it. Whether that’s a good deal depends on your income level and what you value.
Do the math for your situation. Then pick the structure that fits where you actually are, not where you hope to be.
Onwards.
Related reading:- Spanish Healthcare Costs in 2026
- Tax Residency: Beyond the 183-Day Myth (coming soon)
Related Guides
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Frequently Asked Questions
How much does it cost to be autonomo in Spain?
Monthly social security starts at approximately EUR 230 under the 2026 income-based quota system. Add quarterly tax filing costs (EUR 50-100 if using a gestor) and you are looking at EUR 300-400 per month minimum in fixed costs before you earn anything.
Can I be autonomo with foreign clients only?
Yes. Many expats on the Costa del Sol work as autonomos serving clients outside Spain. You still pay Spanish social security and taxes, but may benefit from reduced VAT obligations on services exported outside the EU.
What is the tarifa plana for new autonomos?
New self-employed workers can pay a reduced social security rate of EUR 80 per month for the first 12 months, extendable to 24 months if income remains below the minimum wage. This significantly reduces startup costs.
Do I need a gestor to be autonomo?
Technically no, but practically yes. Quarterly tax filings (Modelo 130, 303) and annual declarations require specific knowledge. A gestor costs EUR 60-120 per month for ongoing autonomo management. The cost of getting it wrong (penalties, interest) far exceeds the gestor fee.
What is the difference between autonomo and SL?
Autonomo is simpler (no minimum capital, easier setup) but you have unlimited personal liability. An SL (Sociedad Limitada) requires EUR 3,000 minimum capital and more administration but limits your liability to the company assets. Most solo operators start as autonomo and incorporate later if needed.
