Payroll for Remote Employees in Spain

When we talk about teamwork in the 21st century, we must also address collaboration with others via digital means. Because that is what we are already doing. And it’s also very common in the corporate world. In this article, we talk about accounting, legal obligations, payroll for remote workers and managing remote teams in Spain.

Teams today can be located in different parts of the world and they need to synchronize their activities to achieve a specific goal. Employers should pay employees working in different locations appropriately and on time as the location of individual members is less of an issue these days. However, there are some special etiquettes when it comes to working together as part of a team and meeting digitally.

Payroll remote employees Spain

Taxes and Legal Obligations in Spain

In order to comply with tax and legal obligations in Spain, the law stipulates that you must appoint a tax representative in Spain if a non-resident entity operates in Spain. This task is entrusted to a private individual who acts on behalf of non-resident companies and private entrepreneurs operating in Spain.

For a non-resident company, it is required whenever you create a new entity in Spain, be it a foreign subsidiary or a Spanish branch. Or if you are hiring a new employee to go to the Spanish Social Security Institute to sign private and public commercial contracts.

For customers and suppliers it is necessary to represent the company before the Spanish tax authorities or other third parties such as CNMV, Bank of Spain, Notary or some forms.

It is required for a private entrepreneur, for example, when submitting tax returns to the Spanish tax authorities on his behalf and managing his day-to-day tax affairs and communications with the Spanish tax authorities. The whole process takes between 4 and 6 weeks when the power of attorney is ready for registration and submission to third party institutions such as the Spanish tax authorities or another party.

The power of attorney prepared by Swapp Agency is notarized and duly translated into Spanish through a certified translator.

According to the current Spanish norm, which is mandatory to win with a tax representative in Spain, not having one (in one place) results in a penalty of between €2,000 and €6,000 imposed by the tax authorities. The appointment of a tax representative in Spain is mandatory for all non-resident companies operating in Spain through a Spanish office or a Spanish branch, regardless of which country they come from.

Swapp Agency offers a turnkey service for all non-resident companies from the beginning of their presence in Spain, advising them on the best payroll and human resources practices to land softly in Spain.

Payroll remote employees Spain

Managing Remote Teams in Spain

So how do we make our team a team that consistently delivers results, and how do we make our team a team that trusts the team members, even if they do not meet regularly.

Nowadays, there are many solutions we can apply to make our digital team a top performer in any kind of task we are assigned.

The first step is to really take the time to connect with people in person, rather than quickly jumping into formal communication or the formal problem or agenda of the day.

It is perfectly acceptable and even advisable to use the first 10 minutes of a meeting to ask people how they are doing and then allow them enough time to share how they are doing and how they are managing their tasks. Are there any difficulties related to work or family?

Simply give your employees the opportunity to talk about themselves. This will make them more willing to communicate and share opinions and perspectives later on.

Another important element to consider is record keeping. You need to make sure that everything that is mentioned and agreed upon is actually recorded or documented in some way. However, if you record your video communication, this may make some people reluctant to share their ideas.

Even if you are recording, you should hold a short meeting before recording. Make sure you have up to 10 minutes to allow participants to contribute their ideas. You can also simply note down on a piece of paper who suggested which idea. And later, when you start recording the session, you can go back to the people who suggested the idea.

Make sure that there are a certain number of platforms or channels that are allowed for communication. Because you do not want different team members trying to share files through different channels.

Payroll remote employees Spain

Accounting out of Spain

If you are registering a Spanish company in this warm country and want to keep your accounts and taxes compliant outside Spanish territory, the following may be of interest to you. Any company registered in Spain can keep and manage its accounts outside Spain. It must be adapted to the local requirements established by the Spanish normative.

The accounts must be kept in accordance with Spanish GAAP, in euros and in Spanish. Even if the accounts can be kept in another language, the Spanish language is required for the preparation of the annual financial statements.

There are also mandatory books such as journal books, official books and statutory accounts, which must be kept in paper or electronic form and kept for six years.

Non-mandatory books such as the general ledger, VAT books and other documents can be kept electronically.

The Spanish tax office, including tax documentation and accounting records, must be kept for 4 years.

What Work Can Be Done Outside of Spain?

With Employer of Record, foreign companies can easily operate in Spain. Swapp Agency will assist you with services such as Accounting, Tax compliance, HR, payroll and many others.


Any Spanish company can manage and maintain accounting, tax compliance and administration outside Spain if required, provided they adapt to the Spanish requirements.

If you want to register a company in Spain and maintain all accounting and tax administration in Spain, you can do so with Swapp Agency.