Can a UK Company Hire an Employee in Spain After Brexit?

Yes, a UK company can hire an employee in Spain. The person works in Spain, under Spanish employment law, and is paid through Spanish payroll. The UK company does not need any UK immigration permission for this, because nobody is coming to the UK. What it needs is a route to employ the person compliantly inside Spain.

That route is either a Spanish entity or an Employer of Record. Once one of those is in place, employing a Spain-based person is much like employing anyone else, just under Spanish rather than UK rules.

Brexit ended free movement between the UK and the EU, which mainly affects people relocating across the border. It changed the rules for a Spanish national who wants to move to the UK to work, and for a UK national who wants to move to Spain. It did not remove the ability of a UK company to employ someone who stays in Spain.

Crucially, a UK sponsor licence, the thing UK employers now need to bring overseas workers into the UK, is irrelevant here. The employee is not entering the UK immigration system at all. They live in Spain, they have the right to work in Spain, and that is where the employment sits.

A tempting shortcut is to keep the person on UK payroll and pay them through PAYE. It does not work. Someone who lives and works in Spain must be employed under Spanish law, with a Spanish contract, IRPF withholding, and Spanish social security. UK PAYE does not discharge any of those Spanish obligations, and running it instead creates tax and compliance exposure in Spain.

In short, the employment has to be Spanish. That is the whole reason a UK company needs a Spanish employer of some kind, rather than just adding the person to its existing payroll.

There are three ways to make the employment Spanish.

• Set up a Spanish entity and employ the person directly, taking on all the payroll, tax and compliance yourself.
• Use an Employer of Record, which employs the person on its own Spanish entity on your behalf and handles the compliance.
• Engage the person as a self-employed contractor, which is only genuinely appropriate if they are truly independent.

The contractor route is the one to be careful with. If the role is really a job, with set hours and direction, Spanish rules can treat it as employment, creating falso autónomo risk. For a genuine hire, that leaves the entity or the EOR.

For most UK companies making one or a few hires in Spain, the Employer of Record route is the practical choice. It avoids the cost and delay of setting up and running a Spanish company, and it makes the person a properly employed Spanish worker in a matter of days. You keep the working relationship and manage them day to day, exactly as you would a UK employee.

Spain is well suited to UK teams: it is only an hour ahead, so the working day lines up almost perfectly, and the talent pool is deep and competitively priced. Our comparison of an EOR versus a Spanish entity weighs the routes, and how to hire an employee in Spain covers the steps.