You have set up a company in Spain, or you are about to, and the natural idea is to be its employee: a contract, a payslip and the Social Security of any other worker. If you own or control that company, Spanish Social Security usually sees it differently.
If you control your company, you do not contribute as an ordinary employee.
You can still be paid by it. What changes is the scheme you contribute to.
Why can you not simply be an employee?
Because Spanish Social Security distinguishes between people who work for someone else and people who, in practice, are the business. A director or partner who has effective control of a limited company, directly or indirectly, and works for it on a regular basis, is included in RETA, the scheme for the self-employed, even if the company pays him or her a salary.
When is there effective control?
The law sets clear markers. There is effective control in any event when you hold at least half of the share capital. It is also presumed, unless proven otherwise:
- When at least half of the capital is held by relatives you live with, such as your spouse.
- When you hold at least one third of the capital.
- When you hold at least a quarter and carry out management functions.
Outside these cases, the authorities can still prove control by other means. Indirect holdings, through another company, also count.
Directors without control
A director who carries out management functions but does not control the company is treated as equivalent to an employee and contributes under the general scheme, although without unemployment protection or cover from the wage guarantee fund. A partner who works for the company without management functions or control can be an ordinary employee.
An example: the couple who own the company
Two spouses set up a company. He holds 80% and she holds 20%, and she is the one who works full time in it, without being a director. Her own stake is small, but together they hold all of the capital and they live together, so she is presumed to control the company. She is included in RETA, not in the general scheme, and her salary does not change that.
Why getting it right matters
The scheme determines what you pay, what protection you have and what happens if the authorities review it. An incorrect registration can lead to contributions being reclassified, often with surcharges, years after the event.
Any questions about how to register in Spain?
At Cigarrán we review the shareholding and the roles in your company before anyone is registered. Book a call.
Where Cigarrán fits in
At Cigarrán we review the shareholding and the roles in your company before anyone is registered, and we set up the right scheme for each person from the start, including how their pay is treated for income tax.
Owner first, then worker
Working for your own company is perfectly possible. What you cannot do is ignore that you own it.
