Spanish employers in all job sectors can now hire non-EU workers in their countries of origin

Employers in all industries in Spain can now recruit third-country nationals in their countries of origin rather than having to find candidates in Spain when they’re struggling to fill job positions, the Spanish Ministry of Inclusion has announced.

Spain's Minister of Social Security and Migration Jose Luis Escriva
Spain's Minister of Social Security and Migration Jose Luis Escriva believes that these regulations are valuable tools to promote regular, safe and orderly migration.. Photo: Chema Moya/ AFP

This means that Spanish employers in all industries can now hire workers who do not reside in Spain or the EU to carry out temporary activities in positions that are difficult to fill by the domestic labour market or that of the EU.

For the first time, the rules also allow contracts signed abroad – contratos en origen – to be extended up to twelve months.

Up until now, they were only able to be extended for a period of nine months. 

The changes were published in Spain’s Official State Gazette (BOE) on December 30th. 

To be eligible to be hired under the contracts of foreign origin category, workers must have a temporary contract of up to one year and must reside outside of the EU or EEA.

The regulations of the collective management of hiring from source countries are updated each year and are based on the national employment situation, the annual forecast and the expected figures of jobs that could come under this category.  

READ ALSO – Tax cuts and visas: Spain’s new law for startups, investors and digital nomads

The regulations allow the development of circular migration projects with third countries and in sectors where there is a demand for labour.

Spain’s Minister of Inclusion José Luis Escrivá indicated that these regulations are valuable tools to promote regular, safe and orderly migration.

The newly approved rules for 2022 mean that for the first time there is a possibility of promoting circular migration projects in all sectors in which there is a demand for workers and difficulties filling positions.

Up until now, Spain has had a Occupations of Difficult Coverage list available to non-EU job seekers, which included positions mainly in the maritime industry in the third quarter of 2021.

The BOE bulletin does not mention which industries are currently experiencing job shortages, but it does mention on several occasions the agricultural sector, leading one to question whether this latest labour reform will be at all applicable to non-EU ‘office’ workers with jobs in teaching, tech, IT, engineering or similar fields. 

Recruitment of non-EU workers usually depends on an employer not being able to find a suitable EU candidate for the role. 

According to a recent survey by the Bank of Spain, 27 percent of Spanish employers are struggling to fill job vacancies, and the biggest shortages are found in the agricultural, hospitality and construction industries.

The BOE bulletin also incorporates new rules to regulate the conditions that employers must offer workers with regards to accommodation, health and safety conditions and adequate hygiene recommendations. This applies particularly to the hiring of seasonal workers.

In 2021, a circular migration pilot project with Honduras was put into operation and in 2022, 250 Honduran workers will participate in agricultural campaigns under this project.

In addition, programmes with Morocco, Colombia and Ecuador will also be kept open.

Once the period of residence and work authorisation has ended, workers must return to their country immediately. 

The offers will be directed preferably to the countries with which Spain has signed agreements on regulation and management of migratory flows. These include Colombia, Ecuador, Morocco, Mauritania, Ukraine and the Dominican Republic. 

They may also be hired from other countries with which Spain has connections in this matter, including the Gambia, Guinea, Guinea Bissau, Cape Verde, Senegal, Mali, Niger, Mexico, El Salvador, the Philippines, Honduras, Paraguay and Argentina. 

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The tax cuts and other benefits Spain’s new Startups Law will bring to entrepreneurs

Foreign entrepreneurs have been waiting for years for Spain's highly anticipated Startups Law to be finalised. The latest news is that it will come into force in September 2022; and new details on the benefits it will bring have also been released.

The tax cuts and other benefits Spain's new Startups Law will bring to entrepreneurs

Spain’s new Startups Law, which the Spanish government first announced in 2019, could finally come into force in September 2022, as indicated by Economy Minister Nadia Calviño. 

For the first time, Spain will have a law directly aimed at the particularities of small technology-based companies. 

The new Startups Law hopes to attract foreign companies, making it easier for startups to choose Spain by giving them incentives such as tax reductions. 

Although there is still a long way before the final text of the Startups Law is published, and it may have to go through several amendments yet, here’s the latest on the draft law so far and the benefits it will bring.

There will be no obligation to pay the social security self-employed fee for multiple activities

One of the most important announcements is the elimination of having to register as self-employed (autónomo) in the Special Scheme for Self-Employed Workers (RETA) for three years, provided that the entrepreneur who launches the startup is in turn hired as an employee by another company.

This is the case for 25,000 self-employed workers in Spain who currently combine working for themselves with being hired by someone else.

Overall, it’s good news as Spain’s social security fee is among the highest in Europe at €294 a month. 

Self-employed workers will have three chances to benefit from the new law

The failure of a business is something that is being contemplated for the first time in legislative text in Spain.

The startup bill will make serial entrepreneurship easier, meaning that a freelancer who has started a business, which ultimately doesn’t work, can try again and can continue to benefit from the same advantages. Specifically, entrepreneurs are allowed to benefit from the Startups Law up to three times.

Improvement in the tax treatment of stock options

Stock options are often a form of remuneration for work that is frequently used in startups. It consists of offering directors or employees the possibility of obtaining shares of the company where they work. Specifically, the tax exemption amount will rise from €12,000 to €45,000.

In addition, tax will only be paid on these shares when the sale of them takes place, or when the company goes public.

Deduction in Corporation Tax to 15 percent

It will give startups and investors a reduction in Corporation Tax from the current 25 percent to 15 percent. 

The elimination of obstacles for foreign investment 

One of the main problems foreign investors encounter when they want to invest in a Spanish startup is bureaucracy.

As a result of this, the new law aims to eliminate the obligation for international investors to request a NIE (foreigner ID number) to carry out this type of action. Both investors and their representatives will only need to obtain Spain’s tax identification numbers (NIFs).

Tax breaks

The new law includes a series of tax benefits in order to make national investment more attractive.

The maximum deduction base for investment for newly or recently created companies will be raised from €60,000 to €100,000 per year and the type of deduction will increase from 30 to 50 percent.

The period of time that a company is considered ‘recently created’ will increase

The period that is considered ‘recently created’ for eligible companies will go up from 3 to 5 years old. For biotechnology, energy or industrial companies, the bracket is wider still – 7 years.

Who will be able to benefit from Spain’s new Startups Law?

The Startups Law is open to anyone from the EU or third countries, as long as they haven’t been resident in Spain in the five previous years. It will allow them to gain access to a special visa for up to five years. 

This visa will be open to executives and employees of startups, investors, and remote workers, as well as their family members.