If you’ve decided to go solo in your Malaga business, you’ll need to set up as a self-employed individual. The process involves a number of steps. While it’s generally straightforward, we’d recommend that you take expert advice especially if you don’t speak good Spanish. This will ensure you do everything correctly and get your business off to the right start. Read on to discover the steps involved in setting up as self-employed in Malaga.
Step 1 – get your NIE
You need your foreigner’s identity number (NIE in Spanish) to register with the tax authorities and social security office. The procedure is straightforward and reasonably quick – read our full guide to getting a NIE in Malaga.
Step 2 – define your business
This must sound obvious, but it is important because your activity determines your tax obligations. For example, some activities are exempt from VAT (IVA in Spanish). So, make sure you know your exact job description before you set up as self-employed in Malaga.
Step 3 – register with AEAT
Once you have your NIE, you register with the tax authorities (AEAT) at the Malaga offices. These are currently on Calle Héroe de Sostoa 11-13, just to the west of the mainline train station. You need to take proof of identity (your passport and NIE).
The tax office allocates you the number that corresponds to your activity. This is known as the IAE (identificación de actividad económica). This determines your tax and IVA obligations.
Book an appointment for your IAE
To save time, book your appointment first. To do so, click here, add your NIE and surname and name (in that order). Click on Enviar and then follow the instructions.
Turn up on the day for your IAE
You can also go to the offices without an appointment. When you arrive, get a number for Gestión Censal. You then wait until you’re called, which may or may not take a while.
All tax transactions including quarterly and annual returns can be filed online. To do this, you need to sign up for the AEAT Cl@ve system. Ask for information while you’re at the offices and if possible, sign up.
Step 5 – open a bank account
You’ll need a bank account for tax payments and rebates as well as for your monthly social security payments. Most banks have accounts for self-employed individuals – shop around and compare deals and fees because they vary hugely.
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Step 6 – register with the social security office
When you’re setting up as self-employed in Malaga, you must register with the Spanish social security system (seguridad social). This is because monthly payments are obligatory. Go to your nearest social security office in Malaga:
• Calle Huéscar 7 – in the centre near El Corte Inglés department store.
• Calle Héroe de Sostoa 142 – in the west in Huelin district.
• Avda Juan Sebastián Elcano 177 – in the east in El Palo district.
You need to show your passport and NIE and provide details of your bank account. You then sign up for monthly payments, an amount that is fixed regardless of your earnings. The payments cover healthcare for you (and your dependents) and contribute towards your state pension.
Flat rate social security payments
If you’re setting up as self-employed in Malaga for the first time, you probably qualify for the flat-rate tariffs for social security. Under the scheme, you pay €60 a month for the first 12 months; around €142 for months 13 to 18; and around €200 for months 19 to 24. After that, you pay around €285 a month. If you’re under 30 or a woman under 35 at month 24, you can continue to pay around €200 until month 36. (Figures for 2019.)
Paying social security
Once you have registered with the social security system, you are eligible for monthly payments. These come out of your bank account through direct debit on the last working day of the month.
Did you know? You are charged the full amount for the first month amount regardless of the date you signed up – ie you pay the same if you register on the 5th of the month or the 21st. It’s therefore best to register as early in a calendar month as possible.