# Living and working in Spain with UK Ltd company



## laurayadam

I have a small internet based UK registered Ltd company and I am considering moving to Spain to live in the flat I own there and wish to sell myself. I wonder if anyone could advise me on some tax issues?
I do not want to have to pay for an accountant in Spain as well as my accountant in the UK and I do not want to set up a Spanish version of my company because I have heard it is a much more costly and complicated venture than setting up a UK company?
1.Can I earn money from my company and pay it into my UK business account whilst living in Spain? If I draw from this whilst living in Spain I presume that I will have to pay UK tax and Spanish tax on it? And require a Spanish accountant to do my books?
2.Or could I leave my company in the UK and stop trading with it and go to live and work in Spain for a different Spanish company. This would be while I sell my Spanish flat before moving back to the UK to resume trading with my company after aproximately 6 months.
Any advice would be greatly appreciated.


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## Guest

I would be interested in finding out about this as well. 

Also what if I decide to rent my house out in the UK. I assume I would pay tax on the rent recieved under UK law and not Spanish taxes on top of that.


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## Destination Spain

Hi all,

You will have to pay taxes in your country of residence. You can choose where you pay. Best ask a good Gestor/Accountant or look on the ukinspain website for more info.


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## Jillio

Good luck with this. We are US citizens moving to Andalucia as my huband has a job in Gib for 3 years. We have been working with professionals and still cannot come up with a clear answer. Seems like you are required to pay Spanish tax ratcheting in levels up to 40% then employ the reciprocal agreement when filing tax in your country of origin to ensure there is no duplicate tax. Problem is as we see it is not the duplicate tax but rather the higher tax rate in Spain without chance of deductions we enjoy in the state through property ownership and such. Seems like alot of people choose to "fly under the radar" in Spain which is a risk in itself.


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## Stravinsky

Destination Spain said:


> Hi all,
> You will have to pay taxes in your country of residence. You can choose where you pay. Best ask a good Gestor/Accountant or look on the ukinspain website for more info.



You can't actually choose where you pay. If you live in Spain for more than 180 days then you are considered a Spanish resident and therefore you may your taxes in Spain. You must de register for taxes in the UK to avoid double taxation, although you can claim back any double tax paid.

Its true to say that taxes in Spain can be higher than the UK..... the price of the sun I guess


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## Goldberg

Stravinsky is right, if you live in Spain more than 180 days a year you are considered resident for tax purposes, even for example if you had a company in the caymans, you would still have to pay tax on your worldwide income to spain.

Non residents still have to pay 25% tax on all income generated in spain. eg. on your property rentals. 

Spain is part of europe, and there are double taxation treaties.

Americans get a bum deal around the world as they always have to pay uncle Sam. ie. the government where ever they live, I guess that is why they can afford to keep bombing and terrorising Iraq.


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## Goldberg

This is a good thread and needs to be further contributed too, as many people are thinking the same thing. setting up businesses abroad. Please further contributions.


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## hayleymorgan

*Homeworking In Spain - Would It Work?*

Hi, 

I work for a HomeWorking Network in the UK. We take order entry calls and customer service calls for large global, blue chips companies for the comfort of our own homes, no commuting, great flexibility, and good money. 

I used to work abroad for one of the major tour operators, and always said that I would like to return to live in Spain. 

I have recently speaking to my MD, about taking our company to spain to open up opportunities there. Do you think that British people would be interested in working for a UK company, working from thier own apartments or villas???? 

I think it would be a great solution to the sometimes difficult job situation in Spain. All that is needed is a dedicated landline and broadband connection. 

Please let me know your thoughts, it really is something that I feel would work well, but you are there and I'm here, so your comments would be appreciated. 

Hayley


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## hayleymorgan

*Saw This Posted Somewhere Else - Maybe Interesting To You*

THIS WAS POSTED SOMEWHERE ELSE BUT MAYBE OF INTEREST.

I am new to this forum and found it very interesting, specially this thread. 
We are planning to move to Spain in 2007. I have been having discussions with my employer to allow me to work remotely from Spain as I am home based in the UK and all I need is a broadband connection. I just came back from Spain and researched the issue thoroughly with my Spanish solicitor. If you work for a UK company, you will, be paying UK taxes. You will not be a Spanish resident even if you leave there more than 6 months in a year. You will not need to fill any tax returns because the taxation agreement between the Inland Revenue and the Hacienda. There is no need to pay Seguridad Social (NI) in Spain because you are paying in the UK. Providing you have the new European Health Card, you will be covered if you fall ill. 
I am not sure how all this will apply if your employer does not know that you are base in Spain. I would be careful if I was you as leaving the country and working from abroad may constitute a bridge of your employment contract and you might end up in Spain without a job!


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## Goldberg

Hayley morgan, if you live or stay in spain more than 183 days a year, and you are working you have to pay Spanish taxes.

Speak to Dr Crespo & Partners - International Lawyers, SRL he will tell you the truth, no bull. He can help. thanks dc.


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## Goldberg

A lady on the move channel I think was looking for a story about someone looking to set up a business in spain, they were going to put it on tv, could be a good move. Go and have a look.


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## hayleymorgan

Great thanks for that, but sorry for my ignorance, whats the move channel? is it a forum or is it a tv channel?



Hayley


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## hayleymorgan

I found it - did a search. Thanks so much for this. Hayley


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## Stravinsky

hayleymorgan said:


> THIS WAS POSTED SOMEWHERE ELSE BUT MAYBE OF INTEREST.
> 
> I am new to this forum and found it very interesting, specially this thread.
> We are planning to move to Spain in 2007. I have been having discussions with my employer to allow me to work remotely from Spain as I am home based in the UK and all I need is a broadband connection. I just came back from Spain and researched the issue thoroughly with my Spanish solicitor. If you work for a UK company, you will, be paying UK taxes. You will not be a Spanish resident even if you leave there more than 6 months in a year. You will not need to fill any tax returns because the taxation agreement between the Inland Revenue and the Hacienda. There is no need to pay Seguridad Social (NI) in Spain because you are paying in the UK. Providing you have the new European Health Card, you will be covered if you fall ill.
> I am not sure how all this will apply if your employer does not know that you are base in Spain. I would be careful if I was you as leaving the country and working from abroad may constitute a bridge of your employment contract and you might end up in Spain without a job!


It might be of interest but it aint true on so many levels


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## elgestor

Hello I'm new to this forum and as a gestor I would like to make a contribution to this thread.

If you work for a foreign company in Spain then the company must register it's business activities in Spain. The company does not have to register as new company in Spain instead it can choose to open a branch. This would require it to apply for Spanish IVA (VAT) registration and registration with the social security.

Income is considered to be earned in the country in which you carry out your activity.

According to the Seguridad Social - Reglamentos Comunitarios which is the system under which workers working for a foreign company in Spain fall under:

Workers contracted by foreign businesses to work in Spain.

“Workers contracted by a foreign business with the aim of carrying on their activity in Spain will be subject to Spanish legislation regarding the Social Security contributions before they are contracted to work. These workers are not considered displaced workers under the social security act, and are subject to the legislation of the country in which they carry out their activity.

The foreign business must apply to the corresponding Tesoreria General or Administration for a social security contribution account number to register the business with the Spanish social security and hence subsequently register the worker with the Spanish social security.”

There are really 2 issues:

1. As an employed person you want to be covered by the social security system of the country in which you are carrying out your activity.

2. To be covered comprehensively in the country in which you carry out your activity you need to contribute to that countries social security system.

In order to be able to contribute there has to be a mechanism for you to be able to contribute and for your employer to be able to pay their share of employers contribution into the social security system of the country in which you are working. This is the same for any EU country.

The way that employees social security contributions are collected in the UK are through the employer. Employees in the UK do not personally pay their social security contributions instead they are deducted at source by the employer who in turns pays into the UK social security system.

It’s no different in Spain, regardless of whether you work for a Spanish or foreign employer in Spain, social security contributions are deducted at source and then paid by the employer to the Spanish social security system. In the UK employers have an employers reference number to which employees currently working for that employer are registered to. The same in Spain each employer has a number to which employees are registered to and deductions are made and contributed under that number.

The social security make no charge for a foreign business to register as an employer or to register their employees with the social security. We have registered several foreign employers with the Spanish social security and tax system, and process their tax and social security obligations without any problems whatsoever.

So there is no need to worry about working illegally or not being able to contribute in the country in which you are working, your employer just needs to register as an employer and subsequently register you as an employee.

Hope this helps.

David


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## Philip

Hello. I am trying to convince my company (I work for a multinational based in UK) to let me work from Spain on a permanent basis. The proposal is for me to work in Spain on my existing UK contract, paying Spanish tax and social security as per the explanation by David "el gestor" above, all of which seems fine. However, the company is blocking it on the grounds that I would fall between two jurisdictions in terms of employment law. 

One of the company's examples was what would happen if I had an accident at work (i.e. in the flat I own in Spain). Whose health and safety law would apply - UK or Spanish? 

I suspect the "falling between two jurisdictions" for employment law argument is not correct: can anyone confirm that and also help with the health and safety point? I would like to be able to discuss it further with the company armed with some more knowledge.

In these days of supposed free movement around an integrated Europe, it can't surely be too difficult for a UK worker to work remotely from Spain?


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## Bevdeforges

I'm not familiar with Spanish employment law, but have had some experience with other EU countries (i.e. France and Germany). 

I think one factor here is that you may have to work for your company's Spanish entity in order to facilitate the paperwork (i.e. taxes and social security), and in order to clarify the jurisdictional issues, such as the example you give. 

I know that when I worked for an international company in Germany, we had to establish a French SARL to account for a couple employees we had working there. The books were kept in Germany, but the legal entity had to meet all the requirements for establishing and maintaining the French SARL (which included filing corporate taxes as a separate entity).

If your employer already has a Spanish subsidiary up and running, it shouldn't be too bad (though there will be disputes over "who reports to who" - normal in house power struggles). If they don't have a Spanish legal entity of some sort already set up, that could be why they are stalling.


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## Goldberg

*This is a good thread*

Why?

Because when you compare costs of setting up a uk company at 100 pounds a year including accounts to the costs of setting up an SL company 3006 euros plus set up costs, you can see the cost differences in uk, versus spanish formation. 5000 euros versus about 50 euros

The key is you are taxable and the employer must pay the spanish tax authority. Does all income then go to uk HQ and it gets a little complex with tax issues. The money goes to the HQ, and then it is resubmitted to Spain, if money is taxed in the uk, then there is a double taxation treaty.

or 
Set up in UK
a branch in Spain
As an employee of the branch.
Where does the money go to. The UK or the branch in Spain?

eg. A spanish company pays your UK HQ, then it trickles down to the branch and then the person. Need to research more.


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## Goldberg

TRY Spanish Company Formation .Com IS A GOOD SITE, IS QUITE CLEAR.


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## Caroline13

*Living and working oversea whilst working for a UK employer*

I saw this email and thought I would reply, I am wondering if you went ahead and worked overseas for a UK company, I am trying to do the same and it would be very useful to find a UK based employer who is already doing the same as my employer is almost in agreement but another test case would help my case, thanks for any help or advise you can provide


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## charlottepalmeruk

hayleymorgan said:


> Hi,
> 
> I work for a HomeWorking Network in the UK. We take order entry calls and customer service calls for large global, blue chips companies for the comfort of our own homes, no commuting, great flexibility, and good money.
> 
> I used to work abroad for one of the major tour operators, and always said that I would like to return to live in Spain.
> 
> I have recently speaking to my MD, about taking our company to spain to open up opportunities there. Do you think that British people would be interested in working for a UK company, working from thier own apartments or villas????
> 
> I think it would be a great solution to the sometimes difficult job situation in Spain. All that is needed is a dedicated landline and broadband connection.
> 
> Please let me know your thoughts, it really is something that I feel would work well, but you are there and I'm here, so your comments would be appreciated.
> 
> Hayley


Hi Hayley,

I note that you posted this some time ago but was wondering how you got on with this? Did you manage to take the company to spain? Do you have any vacancies? Please email me with the information.

Thanks
Grace


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## RachelKorb

*Living in Andalucia*



Jillio said:


> Good luck with this. We are US citizens moving to Andalucia as my huband has a job in Gib for 3 years. We have been working with professionals and still cannot come up with a clear answer. Seems like you are required to pay Spanish tax ratcheting in levels up to 40% then employ the reciprocal agreement when filing tax in your country of origin to ensure there is no duplicate tax. Problem is as we see it is not the duplicate tax but rather the higher tax rate in Spain without chance of deductions we enjoy in the state through property ownership and such. Seems like alot of people choose to "fly under the radar" in Spain which is a risk in itself.


So as you have been living there for quite some time you may have a couple answers that could help me out. I am doing some work for a friend that has a company based in Gibraltar and if all goes well he wants to bring me on full time and I will be moving there. I've done some research in regards to living in Spain and working in Gibraltar. I found results that said I can't do that as an American... What have your experiences been thus far? Any suggestions would be great! Thank you.


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## Bevdeforges

RachelKorb said:


> So as you have been living there for quite some time you may have a couple answers that could help me out. I am doing some work for a friend that has a company based in Gibraltar and if all goes well he wants to bring me on full time and I will be moving there. I've done some research in regards to living in Spain and working in Gibraltar. I found results that said I can't do that as an American... What have your experiences been thus far? Any suggestions would be great! Thank you.


Not sure it's correct that you can't do that as an American, though it probably isn't going to be easy. The difficult part is going to be for your friend to get the proper authorization to hire a non-EU foreigner over anyone available with similar qualifications in the EU. Many of the folks here on the forum are British, and thus have the right to live wherever they please in the EU. For us Americans, we need to get a visa to live anywhere - and if you're attempting a cross-border arrangement, you run afoul of too many jurisdictions.

Now, whether a job and work permit for Gibraltar will get you a residence visa for Spain is anyone's guess. The short term solution would be to first establish yourself in Gibraltar on the work visa and after a couple of years, look into moving to Spain. Or, having your friend establish a Spanish subsidiary or office and then go for your visa through Spain (but again, he'd have to justify hiring you over any other EU national). He could have an argument for hiring you, based on the fact that you've been working for him remotely for a while, but it's still a tricky (and usually expensive) case to make.

Net-net, you pay your taxes to the country in which you are resident and to become resident, you have to get the proper long-stay visa with working privileges.
Cheers,
Bev


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## Stravinsky

Thats a post from August 2007 you are replying to



Bevdeforges said:


> Not sure it's correct that you can't do that as an American, though it probably isn't going to be easy. The difficult part is going to be for your friend to get the proper authorization to hire a non-EU foreigner over anyone available with similar qualifications in the EU. Many of the folks here on the forum are British, and thus have the right to live wherever they please in the EU. For us Americans, we need to get a visa to live anywhere - and if you're attempting a cross-border arrangement, you run afoul of too many jurisdictions.
> 
> Now, whether a job and work permit for Gibraltar will get you a residence visa for Spain is anyone's guess. The short term solution would be to first establish yourself in Gibraltar on the work visa and after a couple of years, look into moving to Spain. Or, having your friend establish a Spanish subsidiary or office and then go for your visa through Spain (but again, he'd have to justify hiring you over any other EU national). He could have an argument for hiring you, based on the fact that you've been working for him remotely for a while, but it's still a tricky (and usually expensive) case to make.
> 
> Net-net, you pay your taxes to the country in which you are resident and to become resident, you have to get the proper long-stay visa with working privileges.
> Cheers,
> Bev


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## Bevdeforges

Stravinsky said:


> Thats a post from August 2007 you are replying to


Actually, it's a post from 2007 that Rachel is replying to. Rachel's post is dated today - at least on my system.
Cheers,
Bev


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## RachelKorb

Bevdeforges said:


> Not sure it's correct that you can't do that as an American, though it probably isn't going to be easy. The difficult part is going to be for your friend to get the proper authorization to hire a non-EU foreigner over anyone available with similar qualifications in the EU. Many of the folks here on the forum are British, and thus have the right to live wherever they please in the EU. For us Americans, we need to get a visa to live anywhere - and if you're attempting a cross-border arrangement, you run afoul of too many jurisdictions.
> 
> Now, whether a job and work permit for Gibraltar will get you a residence visa for Spain is anyone's guess. The short term solution would be to first establish yourself in Gibraltar on the work visa and after a couple of years, look into moving to Spain. Or, having your friend establish a Spanish subsidiary or office and then go for your visa through Spain (but again, he'd have to justify hiring you over any other EU national). He could have an argument for hiring you, based on the fact that you've been working for him remotely for a while, but it's still a tricky (and usually expensive) case to make.
> 
> Net-net, you pay your taxes to the country in which you are resident and to become resident, you have to get the proper long-stay visa with working privileges.
> Cheers,
> Bev


Thanks Bev!

Any advice is greatly appreciated since I am somewhat "blind" going through the process. How did you husband get the job in Gibraltar if he's American? Or is he indeed British?


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## msearson1

*uk internet company but living in spain*



laurayadam said:


> I have a small internet based UK registered Ltd company and I am considering moving to Spain to live in the flat I own there and wish to sell myself. I wonder if anyone could advise me on some tax issues?
> I do not want to have to pay for an accountant in Spain as well as my accountant in the UK and I do not want to set up a Spanish version of my company because I have heard it is a much more costly and complicated venture than setting up a UK company?
> 1.Can I earn money from my company and pay it into my UK business account whilst living in Spain? If I draw from this whilst living in Spain I presume that I will have to pay UK tax and Spanish tax on it? And require a Spanish accountant to do my books?
> 2.Or could I leave my company in the UK and stop trading with it and go to live and work in Spain for a different Spanish company. This would be while I sell my Spanish flat before moving back to the UK to resume trading with my company after aproximately 6 months.
> Any advice would be greatly appreciated.




Hi LaurayAdam.
Did you get a reolution to your problem ? I am in the same situation. I dont want to pay 240 per month to be autonomo if I can be uk based.
All the best,
Marcus.


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