The good news? Globalization, airplanes, and the internet have expanded our connections with clients from all over the world. The bad news? If you're living in Spain, working freelance for a foreign client can sometimes make you feel dizzy (and a little cranky too). As if the time zone difference wasn't enough, right?
But don't sweat it. You, more than anyone, can do this. If you want to freelance like a pro, just learn from my past mistakes! I've carefully picked all the valuable information I wish someone would have guided me through when I started my journey working for a foreign client.
Let's start on a positive note. According to the National Social Security office, more than three million people are registered as self-employed in Spain. You're not the only one that got lured into the benefits of working freelance! Here's what makes me smile (and maybe even occasionally want to do dorky dances) about working freelance for a foreign client:
1. Being my boss! My client is from the United States, and I don't have to commit to a strict work schedule because of the big-time difference. Instead, I set deadlines and establish goals in weekly meetings ahead of time.
2. Global mindset. Working for foreign clients means having more opportunities abroad. Instead of just limiting myself to Spain, I’ve opened a way to connect with clients from all over the world.
3. An above-average salary. Yes, some foreign clients pay more than Spanish clients. A big win if your expenses aren't that high either!
4. I meet entrepreneurs and digital nomads every week. If you're looking to meet more freelance workers, join Corgee's #meet-the-others group on Slack.
There's always a downside, of course. These are the things that make me cringe about working freelance for foreign clients:
1. Being personally liable for my business. Being self-employed in Spain, means that I'm putting my assets at risk if any legal action is taken against my business or professional activity. This can be prevented if you opt for Limited Society (called a Sociedad Limitada in Spain)
2. Less VAT benefits. Most of my clients aren't European, which means that they aren't extent from Value Added Tax or VAT (known as Impuesto sobre el Valor Añadido or IVA in Spain). Therefore, I have less tax-reduction benefits.
3. Spain has the highest self-employment fee in the European Union. Eek!
4. Difficulties when accessing pension benefits. If you're not a Spanish resident, you're still not entitled to the same pension as your contracted counterparts.
I'm an optimist and if you're self-employed, I'm sure you are too. If you start looking at the bigger picture, you’ll notice that all of these ups and downs, bright and obscure aspects about working freelance for a foreign client will make you a pro at financial planning and management. Experience is the toughest and most valuable teacher.
1. Seek help if you're just getting started. There are plenty of financial advisors that work for freelance workers. I recommend Activa Barcelona, this entity offers free personalized attention to help you on your self-employment paperwork. All you have to do is take a quick online course with them.
2. Get informed about your legal and financial procedures. If you want to save time looking for reliable information, I recommend you watch Corgee's latest seminar: Freelancer Tax based in Spain & non-EU clients
3. Save up! Don't let your self-employment taxes get you down, plan numbers and save up every month. You'll want to stay alert for your quarterly and annual tax since the amount might surprise you. Corgee app is an easy way to estimate how much money to put aside for your taxes in real-time.
4. Get tax relief! You can reduce the amount of taxes you're obliged to pay each quarter (meaning your VAT, or IVA) by submitting invoices for all the products and services that you buy for your business. Of course, we're talking about office material, software, and technology.
As uncle Ben once told young Peter Parker once in Spiderman: With great power comes even greater responsibility. When the time comes, you'll be managing foreign clients like a pro. You don't have to do it all alone. Keep up to date with the latest freelance news and join a supportive community of Corgee Freelance workers!