To hire a worker who carries out his or her activity within Spanish territory, it is essential to comply with a series of requirements prior to hiring the workers.
Firstly, you must apply for a Contribution Account Code and register and pay contributions for these workers in accordance with Spanish Social Security regulations.
If the company belongs to the European Union, proof of registration in the Professional or Commercial Register must be provided (where required in the country where the company is located). Documentation must be submitted with its duly legalised translation.
Furthermore, the company, given that it will need to maintain frequent relations with the General Social Security Treasury, must appoint a representative domiciled in Spain, as established in article 16.2 of the Collection Regulations (RD 1415/2004, of 11 June): “Those liable parties who reside abroad for more than six months of each calendar year will be obliged to appoint a representative domiciled in Spanish territory, for the purposes of their relations with the General Social Security Treasury”.
In the tax field, it is necessary to bear in mind that the foreign company needs a Spanish NIF to be able to withhold income tax on the salaries of its employees in Spain. For this purpose, the foreign company must also appoint a tax representative in Spain.
The foreign company will directly keep the accounts of the activity carried out in Spain. VAT paid in Spain must be refunded under the special procedure for non-residents. The activity carried out by the representative office will not constitute a permanent establishment for VAT or corporate income tax purposes, provided that the employees carry out work that does not involve management autonomy in Spain and is not invoiced from Spain. In case these employees have the autonomy to contract and negotiate directly with clients, a permanent establishment will be constituted for corporate income tax purposes.