Remote work in spain: easier for foreign firms, harder for europeans

In the world of remote work, especially if you’re working from Spain for an international company without a local presence, legal options are quite limited. What’s particularly frustrating is that it is easier, legally and financially, to work for a company in the United States or South Africa than for a German or French company.

To better understand this, let’s assume you reside in Spain and want to do permanent remote work for a European company that doesn’t have a presence in the country. In that case, you’ll need to use an “Employee of Record” (EoR). This means utilizing an intermediary company like Deel or Remote, which has offices in several countries (including one in Spain). Through this company, the employee is formally hired, even though they work daily for the foreign company. While this guarantees that you pay your taxes and social security in Spain like any Spanish employee, the EoR service has an additional cost that ranges from 500 to 600 euros, which is added to the overall employee cost.

On the other hand, if you reside in Spain and want to work permanently for a company outside of Europe, you can do so either via EoR or as a contractor/self-employed. The difference here is that if you’re working for a company outside of Europe, you are not considered a false self-employed person even if you have a single employer generating over 80% of your income. This allows U.S. companies to avoid social security costs, hiring residents in Spain legally and economically, often at salaries much lower than those in their home country.

However, if the hiring company is German, French, or even Spanish, this is deemed illegal and constitutes fraud. The situation is absurd: in Europe, we are allowing it to be far easier and cheaper for companies from outside the EU to scoop up our talent while European companies face additional burdens.

While there is strong support for the global talent market, it’s imperative to establish rules that ensure equal competition, regardless of origin. The troubling issue is clear: in Europe, we consistently create barriers for ourselves, while companies from other continents can operate with greater freedom. This directly impacts our competitiveness and the development of talent within the region.