When a worker wants to telework from another country for his current employer, he considers setting up as a self-employed person. This is the first option because it is apparently the easiest. Nevertheless, it is a risky option that can lead to penalties if not done properly.

To begin identifying the differences between each concept, we should point out that, when we talk about self-employer or freelance, we are referring to the independent professional who provides services to companies. Freelancers offer their professional services, seek and manage their client portfolio independently, establish their rates and schedules and, after negotiation with a client, agree on the conditions of the work to be conducted.

So the freelancer is not solely dependent on a client. If this were the case, we could no longer speak of a self-employed person, but rather of a self-employed person who is economically dependent (TRADE) or contractor. These are independent professionals who provide their services to a specific company. In this case, the professional must negotiate with the company and their relationship is also commercial and not labour-related.

The problem with this concept is that, in the eyes of the Administration, it may represent the abuse of a company towards a worker, and therefore be illegal. In this case, the administration will understand that it is not an economically dependent worker but a false self-employed person.

Under Spanish law, for example, an economically dependent worker (TRADE) is understood to be a self-employed worker who invoices at least 75% of his or her income to a single client and is economically dependent on him or her. For a TRADE to be recognised by the administration, it must be fully justified that the relationship is not an employment relationship but a commercial one. This interpretation is the one that generates the most problems, as there are no specific guidelines to determine whether it is a TRADE or a bogus self-employed person. The administration will ensure the protection of the worker and his or her equal relationship with the company and will therefore try to ensure that the company does not abuse him or her.

In the case mentioned at the beginning of the article, if a person has an employment relationship with a company and, in order to move to another country, considers the option of becoming self-employed, he/she will be considered in most cases as a false self-employed, as the competent authorities will interpret this as an employment fraud. This fraud is associated with financial penalties for the company, which may even require the company to hire the worker and register him or her in the social security system, and claim back what it has not previously paid for him or her.