Self-employed residence permit
With a self-employed permit you are allowed to start your own business, either as a self-employed person or as a company. However, it is not allowed to work for someone else or work in another company. Because of this situation, working residence permit (cuenta ajena) is required.
Nonetheless, it is possible to work with other companies or provide services to them. The employee has a labor contract with the employer, while the individual or company has a partnership relationship with each other. It is not uncommon for two companies to work together. A simple partnership can be a verbal commitment, while a more complex one can be a signed partnership agreement.
Self-employed people pay their own social security
The Social Security Law states that the employer is required to pay social security for the employee. On the contrary, if you are self-employed or freelancer, you need to pay your own social security. And they are required to file quarterly tax returns.
For a company, the cost of hiring an employee is much higher, and in addition to social security, there are other responsibilities such as work-related injuries, termination compensation, maternity leave, sick leave, etc. Many companies, therefore, prefer to work with a self-employed person and then sign a cooperation agreement, where one can avoid some obligations under labor law.
Related article: Registration with the Tax Office for Freelancers (autónomo)
Disguising labor relations with a cooperation agreement
Many companies try to reduce the number of employees and then sign “cooperation agreements” with more individuals in order to reduce costs. In recent years, the Ministry of Labor has been more strict about such cooperation agreements, which they consider to be false and signed by companies to avoid labor relations. The reason is that these so-called “self-employed” people perform their duties no differently than an employee. The distinction between a labor relationship and a partnership depends on a number of factors, such as:
-The calculation of the financial remuneration and the method of payment.
-Whether the working hours are set by the company. The independence of the worker. Whether the tools of production of the worker are provided by the company.
A false “partnership” has no effect on the worker
The Spanish Labor Law considers the employee as a weak person and as a protected person. If a company signs a partnership agreement with an individual for the purpose of hiding a labor relationship, it is the company that will be punished. The worker would not be penalized. In addition, if the labor relationship lasts for 6 months, the employee can apply for work residence as a result.
