Employer of Record: How to Expand your Business in Spain

If your looking to expand your business to Spain, at some point, you’ve probably wondered what exactly an Employer of Record is and what type of services this kind of company can offer.

In this article, we will address some of the key intricacies of Spanish legislation, as well as the different types of employment contracts available in our country, the specific characteristics of temporary work, regulatory compliance, and more. All of this is intended to help you mitigate any potential complications or risks that may arise through an association with an Employer of Record.

Let´s start from the beginning…

What is an Employer of Record (EOR)?

We could define this concept as a “legal employer.”

In other words, it is the solution that allows a company—seeking to expand its business into Spain—to hire employees in our country while fully complying with all labor, tax, and Social Security obligations required in the process.

Pioneers in EOR Services in Spain

After more than 25 years operating in Spain as leaders in the sector, we decided to broaden our target audience.

New Tandem is the Local Partner of numerous foreign companies, from multinational corporations to small and medium-sized enterprises. In short, businesses without offices or infrastructure in Spain that are looking to find talent and simplify operations.

Employer of Record (EOR) in Spain – THE COMPLETE GUIDE

We have the infrastructure and experience necessary to provide all these services to your company, enabling you to operate easily in Spain without worrying about the legal risks that often make international expansion a daunting experience.

Looking to save TIME and MONEY

Being pioneers in EOR services in Spain has more advantages than it might seem at first glance.

Our extensive experience and knowledge of the market allow us to expand into different areas, which is why we operate both internationally (EOR) and nationally (Recruitment & Temporary Employment Services).

Still, we understand that anyone unfamiliar with Spain’s legal framework may have doubts—whether they want to expand their business into our country or simply hire local talent.

And this is where New Tandem comes in…

We know that operating in a labor market that is not your own can be confusing if you’re new here.

That’s why we explain EVERYTHING you need to know below.

What Is a Temporary Employment Agency (ETT) and How Does It Work?

In Spain, it is common for companies to turn to a Temporary Employment Agency (ETT) to find the most suitable profiles for specific tasks.

There are many reasons why a company might need employees for a fixed period. This is where ETTs come into play, providing the perfect solution for finding efficient professionals quickly, always adapting to the needs of the client company.

ETTs are also an excellent option for employees or job seekers. These HR-specialized companies manage large databases with a wide range of profiles to offer to hiring companies.

In short, this companies foster flexibility in the labor market and generate significant employment, although they are not exempt from certain legal risks.

Still have questions? Then keep reading.

What Requirements Must an ETT Meet?

In Spain, any temporary employment agency wishing to operate legally must obtain administrative authorization from the relevant authority.

To do so, there are certain mandatory legal requirements:

Have sufficient organizational structure.
Be exclusively dedicated to the activities of an ETT.
Have no outstanding tax or Social Security obligations.
Include the words “Temporary Employment Agency” in its legal name.
Guarantee compliance with salary and Social Security obligations.
Not have been sanctioned with suspension of activity (two or more times).
Establish a financial guarantee available to the Labor Administration.

What Are the Obligations of an ETT?

It is important to remember that salary payments, Social Security contributions, and any other compensation always fall under the responsibility of the ETT.

They are also required to provide adequate job-related information and may never demand that workers cover expenses related to recruitment, hiring, or training (if applicable).

Everything you need to know to expand your business to Spain

If you’re looking to establish your business in Spain, at New Tandem we keep you fully updated on the tax, labor, and legal regulations affecting companies in our country.

(As well as any updates or reforms that may arise along the way).

Employment Conditions in Spain

Types of contracts

Most employment relationships involve permanent contracts. Fixed-term contracts may only be used in justified circumstances:

Fixed-term contracts due to production needs.
Fixed-term contracts for substitution.

Working hours

The average workweek in Spain consists of 40 hours (with the possibility of justified overtime, provided it is compensated with an equal amount of paid time off).

Minimum wage

As of today, Spain’s minimum gross monthly salary is €1,381.

Probationary period

The maximum probationary period is 6 months. During this time, there is no notice period required for termination.

Payroll in Spain: Regulatory Compliance

In Spain, the Workers’ Statute governs payroll regulations, while the General Social Security Law establishes specific rules on contributions and deductions. Together, they ensure full compliance with the law.

The Ministry of Labor and Social Economy is the authority in charge of enforcing labor legislation. To avoid sanctions, companies must stay up to date with all requirements, always respecting workers’ rights.

For example:

Form 111 must be submitted quarterly within 20 days after the end of each quarter, reporting withholdings and payments related to Personal Income Tax.
Form 190 is the annual summary of Form 111, due by January 31 of the following year.

Feeling lost? Don’t worry—if you’ve made it this far, we have good news for you:

At New Tandem, we commit to meeting ALL deadlines, key dates, and obligations to spare you any tax-related problems.

Legal Obligations During Recruitment

As experts in recruitment, transparency and integrity are at the core of our processes.

In fact, the latest Organic Data Protection Law (effective December 2018) expanded companies’ obligations when handling personal data from candidates. This law protects candidates’ rights and requires companies to ensure total privacy when processing their information.

Key compliance points under the new Data Protection Law include:

Collecting resumes:

Employers must obtain express authorization from candidates for processing and storing their CVs.

Publishing job postings:

Offers must use neutral wording, clearly define the job’s functions, and inform candidates that their data will be collected and stored.

Conducting interviews:

Only data strictly necessary for the recruitment process may be collected, avoiding subjective or discriminatory questions.

At New Tandem, we have been dedicated to Human Resources for more than 25 years, and our extensive experience speaks for itself.

In addition to being pioneers in EOR Services and acting as a Local Partner for businesses expanding into Spain, our expertise in HR—and our role as an ETT—gives us a complete understanding of the Spanish labor market.

This knowledge allows us to tailor our solutions to the specific needs of each client.

These are our main strengths: consolidated experience, personalized and close approach.

New Tandem, Certified in Quality

True to our commitment to quality in the service we provide to our clients, we are proud to confirm that we are certified under the ISO 9001:2015 standard.

This certification, granted by quality leader SGS, reaffirms New Tandem’s commitment to improving overall performance and ensuring excellence throughout the Company.

It also certifies that our processes, systems, and services fully comply with all national and international standards and regulations.

For all these reasons—and more—you have every reason to partner with us and discover why we are the best HR partner you can find today.

Or, if you prefer, you can email us at newtandem@newtandem.com.

We’ll take care of the rest…