Being self employed in Lanzarote, or any part of Spain is easy. It is also much more common than in some European countries.
The Spanish word for self employment is Autónomo. When you register as autónomo you immediately start paying into the social security system and therefore receive entitlement to the local medical health system. The easiest way to set up your business is to work with an asesoría: They will make sure that the correct forms are completed and any necessary licenses required applied for. In many cases you will be required to charge IGIC, which is our equivalent to VAT. In this case your asesoría will make a quarterly IGIC return on your behalf. The current rate of IGIC in the Lanzarote and the rest of the Canary islands is 7%.
When self employed you can opt to either make quarterly IGIC and income tax declarations or pay a fixed quarterly amount on the “modulos” system. Both have their advantages:
The benefit is that you only pay tax on the actual income earned / declared. But you will need to submit your invoices and receipts, usually through an accountant.
This is a simple, fixed cost option and no book keeping is required. But an agreed amount is payable regardless of your results.
Who can be self employed?
As a self employed person in Lanzarote, you are free to earn your income from a number of sources. It’s quite common for people to have 3 or 4 “jobs” where they charge for their services by invoice. Be sure all the money you earn goes through your bank account, as this will help with getting finance in the future.
One thing you can’t do is disguise working full time for an employer as being self-employed. Some employers might suggest this, as it will save them money. But if you are only invoicing one company every month, the hacienda will deem you are effectively an employee.
The costs are quite high to be self employed – currently around €290 per month. That covers your healthcare and pension. But there are low start schemes for newly self employed, at around €50 per month for the first six months.
More reading: 8 tips for getting a job in Lanzarote.