How to Hire in Spain Without an Entity (2026): EOR vs Entity vs Contractor

A foreign company can hire employees in Spain without a Spanish legal entity in 2026. There are three routes: an employer of record (EOR) that employs the person on its Spanish payroll for you, registering your foreign company as an employer with Spanish Social Security, or engaging the person as a contractor (autónomo). An EOR is the fastest for the first hires; an entity becomes worthwhile once the team grows.

This guide compares the three routes on cost, speed and legal risk, with 2026 figures from Spanish official sources. It is written for US and other foreign companies hiring engineers in Spain, and it is not legal advice: confirm the structure with a Spanish employment lawyer before the first contract.

Can a foreign company hire employees in Spain without an entity?#

Yes. Spanish law does not require a foreign company to incorporate a subsidiary before employing someone in Spain. The company needs a way to run Spanish payroll, pay Social Security contributions and withhold income tax, and it can do that through an employer of record, by registering directly as a non-resident employer, or by not employing the person at all and contracting an autónomo.

The choice depends on how many people you will hire, how fast you need them and how much compliance work you are willing to own. For one to a few engineers, most foreign companies start with an EOR.

What an employer of record is in Spain#

An employer of record (EOR) in Spain is a provider that becomes the legal employer of a worker who does the day-to-day work for another company. The worker signs a Spanish employment contract with the EOR, is paid through the EOR's Spanish payroll and receives full Spanish employment rights, while the client company directs the work and pays the EOR a monthly fee plus the employment cost.

Deel, Remote and Oyster are the best-known EOR providers operating in Spain. An EOR removes incorporation, local payroll and Social Security registration from the client's side, which is why an EOR hire can start in weeks rather than months.

EOR vs entity vs contractor in Spain (2026 comparison)#

The table compares the routes for hiring an engineer in Spain without a Spanish subsidiary, plus the entity option for reference.

Route	Who is the legal employer	Time to first hire	Monthly cost on top of salary	Main legal risk	Best for
Employer of record	The EOR provider	Weeks	Employer Social Security (about 30.65%) plus EOR fee from $599	Choosing a provider without its own Spanish entity	First 1–5 hires, testing the market
Non-resident employer registration	Your foreign company	Slower: NIF and Social Security registration first	Employer Social Security plus a payroll provider (gestoría)	Permanent establishment, compliance gaps	A few hires, long-term, no EOR fee
Contractor (autónomo)	Nobody: it is a services contract	Days	None; the contractor pays their own contributions	Reclassification as false self-employment	Genuinely independent, project-based work
Spanish entity (SL)	Your Spanish subsidiary	Weeks to months	Employer Social Security plus accounting and payroll	Ongoing corporate compliance	Teams of roughly five or more, or an office

Is an employer of record legal in Spain?#

Yes. An employer of record is a legal way for a foreign company to employ someone in Spain, and the Spanish rule that often worries foreign companies, the ban on illegal transfer of workers (cesión ilegal de trabajadores), covers a different situation. Article 43 of the Workers' Statute says that hiring workers in order to cede them temporarily to another company can only be done through a licensed temporary work agency (empresa de trabajo temporal, ETT).

The ETT rule applies when someone hires a worker for you in Spain and places that worker at your disposal in Spain. It does not affect the usual ways a foreign company builds an engineering team in Spain:

• Using a recruitment agency or headhunter to find the person. The agency finds and screens candidates, and the hire is employed by you or by your EOR, never by the agency.
• Engaging the person as a contractor (autónomo). A freelance contract is a services contract between you and the professional, with no third party in between.
• Employing the person through an EOR such as Deel. According to Deel, its Spanish EOR service operates through its own wholly owned Spanish entity, which acts as the employer and handles Social Security registration.

The differences between the two models, and when a company does need an ETT, are explained in Kulturo's guide to EOR vs ETT in Spain.

How much an employer of record costs in Spain#

An employer of record in Spain costs the employer's Social Security contributions plus a monthly fee per employee. In 2026 the published EOR fees are $599 per employee per month at Deel, $699 at Remote and $699 at Oyster, according to each provider's pricing page.

Employer Social Security in Spain adds about 30.65% of gross salary in 2026, before the workplace-accident premium. According to the Spanish Social Security and Cuatrecasas, the employer pays 23.60% for common contingencies, 5.50% for unemployment on a permanent contract, 0.20% for FOGASA, 0.60% for training and 0.75% for the intergenerational equity mechanism (MEI). Contributions stop rising at the 2026 maximum base of €5,101.20 a month.

For an engineer on €60,000 gross a year, that means:

• Salary: €60,000
• Employer Social Security (30.65%): €18,390
• EOR fee at Deel: $7,188 a year ($599 × 12)
• Total before the accident premium: about €78,400 plus $7,188

The salary bands themselves are in Kulturo's guide to developer salaries in Spain, and the full employer cost by role is in average salary USA vs Spain.

Registering as a non-resident employer in Spain#

A foreign company without a Spanish entity or permanent establishment can register as an employer with Spanish Social Security and run Spanish payroll directly. The company obtains a Social Security employer account (código de cuenta de cotización), appoints a representative domiciled in Spain, and needs a Spanish tax identification number (NIF) from the Agencia Tributaria.

The registration requires the company's deeds of incorporation, proof of registration and a power of attorney, translated and legalised. Conesa Legal notes that EU companies can do this more easily than non-EU companies. Most foreign employers that take this route hire a Spanish payroll provider (gestoría) to run monthly payroll and filings, which costs less per employee than an EOR but leaves the compliance with the foreign company.

Can you hire developers in Spain as contractors?#

You can hire developers in Spain as contractors (autónomos), but only if they genuinely work independently. Under Article 1.1 of the Workers' Statute, anyone who works for another's account, within that company's organisation and direction, is an employee, whatever the contract says. A full-time developer with fixed hours, your tools and your manager is an employee in substance.

Spanish law has a specific category for contractors who depend on one client. A dependent self-employed worker (TRADE) is one who earns at least 75% of their income from a single client, under Article 11 of Law 20/2007, and that contract must be in writing and registered.

Reclassification is expensive. Failing to register a worker with Social Security is a serious infringement under the Spanish law on social order offences (LISOS), with fines of €3,750 to €12,000 per affected worker, on top of the contributions that should have been paid.

Permanent establishment risk when you hire remotely in Spain#

Hiring one remote employee in Spain does not automatically create a permanent establishment (PE) for a foreign company, but it can. Under the 2025 update of the OECD Model Tax Commentary, a home office is generally not a place of business of the employer if the employee works there less than 50% of their working time over 12 months, as EY summarises it.

The risk rises in two situations. The first is when the employee works mainly from home in Spain for a commercial reason, such as serving Spanish clients. The second is when the employee habitually concludes contracts on the company's behalf, which makes them a dependent agent. Engineers who build product and do not sell to Spanish customers carry a lower PE risk than sales or country-manager hires, but the analysis is fact-specific and worth a tax adviser's review.

At what headcount should you open an entity in Spain?#

Open a Spanish entity once you expect around five or more employees in Spain or plan a physical office. In Kulturo's experience with foreign clients, below roughly five hires the cost of incorporation, accounting and labour compliance rarely pays for itself against EOR fees; above that, the fixed costs of an entity spread across enough people.

Setting up the entity is easier than many foreign companies assume. Since Law 18/2022 ("Crea y Crece"), a Spanish limited company (sociedad limitada, SL) can be incorporated with share capital of €1, although companies with less than €3,000 must allocate 20% of profits to a reserve until capital and reserve reach €3,000. Switching from EOR to entity is common: the worker moves from the EOR's payroll to the new SL's.

Spanish employment rules every foreign employer must follow#

Whichever route you choose, the Spanish employment contract must follow Spanish law. These are the rules foreign employers most often miss:

• Fourteen payments. Under Article 31 of the Workers' Statute, employees receive two extra payments a year, one at Christmas, unless the collective agreement spreads them across 12 monthly payments.
• Minimum wage. The 2026 minimum wage (SMI) is €1,221 a month in 14 payments, or €17,094 a year, under Royal Decree 126/2026.
• Remote work. Under Law 10/2021, anyone working remotely at least 30% of the time needs a written remote-work agreement before starting, and the company must pay or compensate the expenses of remote work.
• Working hours and time tracking. Spain caps working time at 40 hours a week and requires daily time records, as explained in Kulturo's guide to working hours in Spain.

Hiring non-EU engineers: the highly qualified professional permit#

A company hiring an engineer from outside the EU can use Spain's highly qualified professional (PAC) residence permit, created by Law 14/2013. Under Article 76 of that law, the authorities must decide within 20 days of an electronic application, and silence counts as approval; the permit is valid for three years under Article 71.

The same law also covers the EU Blue Card, which requires a salary between 1.0 and 1.6 times the average gross annual salary in Spain. Relocated engineers may also qualify for the special tax regime for inbound workers (the Beckham Law), which taxes employment income at 24% up to €600,000, according to the Agencia Tributaria.

Using a recruitment agency together with an EOR in Spain#

A foreign company without a Spanish entity needs two things to make its first hire: someone to find the engineer and someone to employ them. Some recruitment agencies in Spain combine both, so that the company signs one search and receives a hired, compliant employee.

Kulturo, a Barcelona tech recruitment agency with clients in more than 8 countries, works this way with foreign companies. Kulturo runs the search, employs the hire through its employer-of-record partner Deel, supports relocation and, with an immigration partner, manages the highly qualified professional (PAC) permit for non-EU engineers. The recruitment fee is charged only on success, and Kulturo's published target is 30 days from kick-off to signature.