Working in Spain for your Dutch employer: a dream that can really come true
More and more Dutch companies are looking across the border to attract talent or give existing employees the opportunity to work from abroad. And Spain is a popular choice. The sun, the lifestyle, and the growing international working environment make it an attractive destination for both employees and employers.
But what exactly does it mean to work in Spain for a Dutch company? What about taxes, contracts, and social security? And how can you, as an employer, arrange this properly and compliantly without having your own branch in Spain?
In this blog, we explain step by step how working in Spain for a Dutch company works from a legal and practical perspective and how Parakar can help. We will discuss:
- Why Spain is so attractive to Dutch companies
- What does it mean to work in Spain for a Dutch company?
- Legal and tax considerations
- How an EOR or payroll provider makes the difference
- Common mistakes in international employment
- Parakar’s approach: effortless international growth
Why Spain is so attractive to Dutch companies
Spain is more than just sun and sea. The country has a growing network of international professionals, start-ups, and tech hubs (think Barcelona and Madrid). In addition, labor costs are lower on average than in the Netherlands, while the quality of life is high, an interesting combination for companies looking to expand internationally.
For employees, working from Spain for a Dutch company offers the opportunity to better combine work and lifestyle. With the rise of remote working, it is also easier than ever to continue working for a Dutch employer outside the Netherlands.
However, there is more to this arrangement than just a laptop and a stable internet connection.
What does it mean to work in Spain for a Dutch company?
When someone lives and works in Spain, even if it is for a Dutch company, that person is usually considered an employee in Spain according to European regulations. This means that Spanish labor and tax laws may apply.
In practice, this means:
- The employee is covered by Spanish social security.
- Taxes must be paid in Spain.
- The employment contract must comply with Spanish law.
Without a local entity in Spain, it can therefore be difficult for a Dutch company to legally put employees on the payroll there. That is where a partner such as Parakar comes in with a solution. We ensure that everything related to contracts, taxes, and local legislation is smoothly arranged through our EOR and payroll solutions.
Legal and tax considerations
Working in Spain for a Dutch company involves a number of important legal and tax considerations:
a. Social security and taxes
Anyone who stays in Spain for more than 183 days per year is generally considered a Spanish tax resident. Income tax must then be paid in Spain, and the employee is covered by the Spanish social security system.
b. Labor law
Spain has different employment conditions than the Netherlands. These include:
- A 14th month (extra vacation pay and Christmas bonus)
- Different rules for vacation and sick days
- Mandatory registration with Spanish social security
Having a locally compliant contract is therefore crucial.
c. Permanent Establishment risk
If a company has long-term employees in Spain without an entity, the Spanish tax authorities may consider the company to be a “permanent establishment” in Spain, with all the tax consequences that entails.
An EOR construction prevents this risk, because Parakar acts as the local employer on behalf of the Dutch company.
How an EOR or payroll provider makes the difference
An Employer of Record (EOR) makes it possible to hire employees in Spain without having to set up an entity yourself as a Dutch company.
In concrete terms, this means:
- Parakar becomes the formal employer in Spain.
- You retain full control over the work, the position, and day-to-day management.
- We take care of all local obligations: contracts, payroll, taxes, and social security.
This allows your company to focus on growth, while we ensure that everything is legally correct and compliant.
Advantages of working with an EOR such as Parakar:
- No need for a Spanish entity.
- Full compliance with local legislation.
- Fast onboarding of talent in Spain.
- A single point of contact for HR, payroll, and compliance.
Common mistakes when working abroad
Even experienced HR teams sometimes encounter pitfalls when it comes to international employment. Here are a few examples:
- Using contracts in Dutch: these are often not legally valid in Spain.
- Continuing to pay taxes in the Netherlands, even though the employee is a tax resident of Spain.
- No local registration, which can result in fines from the Spanish authorities.
An EOR or local payroll partner prevents these kinds of problems and ensures that everything is properly arranged from day one.
Parakar’s approach: effortless international growth
At Parakar, we believe that HR should not be a bottleneck for international growth. For more than 20 years, we have been helping companies hire staff in 10 European countries, including Belgium, France, Germany, Ireland, Italy, the Netherlands, Poland, Portugal, Spain, and the United Kingdom.
Our local experts know Spanish labor law inside out. Whether you want to have an existing employee work from Spain for your Dutch company or hire local talent in Spain without an entity, we make sure everything runs smoothly and compliantly.
Our services include:
- EOR (Employer of Record): local employment without an entity.
- Payroll: accurate and timely wage payments in accordance with Spanish regulations.
- HR Support: guidance on contracts, fringe benefits, and compliance.
- Immigration and relocation: support with visas and residence permits.
Working in Spain for a Dutch company is easier than you think
Working in Spain for a Dutch company offers enormous opportunities, for both employers and employees. With the right guidance, there is no need to get caught up in legal or administrative complexities.
With Parakar as your multiservice provider, you have one reliable partner who takes care of everything: from contracts to payroll administration. This allows you to focus on what really matters: growth, people, and international opportunities.
Ready to grow internationally?
Would you like to know more about working in Spain for a Dutch company or how Parakar can support your organization with international employment?
Contact us, our local experts are happy to help.
