Self-employed worldwide: international comparison of contributions and tax
Being an autónomo in Spain is nothing like being self-employed in London, a Freiberufler in Berlin or a sole proprietor in New York. In some countries you pay from day one, in others only when you actually earn; in some social coverage is robust, in others almost non-existent; in some you register online in minutes, in others the process is Kafkaesque. This guide compares seven key jurisdictions — Spain, the United Kingdom, Germany, the United States, Australia, Portugal and Estonia — by monthly contributions, taxation, social security, VAT, registration formalities and coverage, with a twofold goal: to understand where Spain really stands and, if you are thinking of relocating or structuring your activity abroad, to flag the common pitfalls (tax residence, double taxation, permanent establishment).
In short
- Spain still applies a mandatory monthly contribution from registration (€200-590 depending on income bracket under the progressive system in force since 2023). Social coverage is comprehensive, but the fixed cost is high for those just starting out.
- The UK, US and Australia follow the opposite model: no fixed monthly contribution; income tax and social contributions are settled at year-end on actual profits. Lower social coverage, but a cheaper start.
- Germany distinguishes between Freiberufler (liberal professions) and Gewerbetreibender (commercial activities): health and pension contributions are more complex and, in many cases, voluntary.
- Portugal offers the simplified trabalhador independente regime, with low social contributions during the first 12 months and competitive effective rates.
- Estonia, via e-Residency, is not strictly self-employment, but it is a popular alternative for digital professionals who prefer to operate through an Estonian company.
- Moving out of Spain as a self-employed worker is not just about contributions: it requires planning tax residence, permanent establishment, double taxation and, where relevant, the Beckham Law.
Why being self-employed in Spain is so expensive (and what is changing)
The Spanish model starts from a different premise than the Anglo-Saxon world: mandatory social security contributions from day one. Before 2023, almost every self-employed worker paid a flat contribution (around €295) regardless of income; since Royal Decree-Law 13/2022 there has been a progressive system with 15 brackets based on actual net earnings, with contributions ranging between €200 and €590 per month. Even so, it remains a regulated, mandatory fixed-monthly-contribution system.
In return, Spanish self-employed workers enjoy very comprehensive social coverage: contributory pension, sick leave, maternity/paternity, cessation of activity ("self-employed unemployment benefit") and free public healthcare. In Anglo-Saxon models, that coverage has to be purchased separately (private medical insurance, private pension plans).
Quick comparison: contributions, taxation and procedures
| Country | Monthly social contribution | Tax on profits | Social coverage | Registration |
|---|---|---|---|---|
| 🇪🇸 Spain | Mandatory fixed (~€200-590) | Progressive IRPF (19-47%) | Comprehensive | Complex |
| 🇬🇧 United Kingdom | No contribution; annual NICs on profits | Income tax (20-45%) | Medium (public NHS) | Simple, online |
| 🇩🇪 Germany | Variable health and pension insurance | Einkommensteuer (14-45%) | Medium-high | Bureaucratic |
| 🇺🇸 US | No contribution; self-employment tax 15.3% | Federal + state (10-37%) | Low (private insurance) | Immediate |
| 🇦🇺 Australia | No contribution; annual PAYG | Income tax (19-45%) above AUD 18,200 threshold | Medium (Medicare) | 5 minutes online (ABN) |
| 🇵🇹 Portugal | ~€149 first year, progressive afterwards | IRS (14.5-48%) or simplified regime | Medium | Simple |
| 🇪🇪 Estonia (e-Residency + OÜ) | Not self-employed; tax only on distribution | Corporate 20% only when dividends are paid | Low (to be arranged) | 100% online |
🇪🇸 Spain (RETA)
Spain's Special Scheme for Self-Employed (RETA) is the backbone of the Spanish autónomo regime. Since 2023 you contribute on the basis of your actual net earnings, with 15 brackets and contributions ranging from €200 to €590/month. There is a flat rate of €80/month for 12 months upon registration, extendable for a further 12 months if earnings remain below the minimum wage. The Spanish Social Security Treasury (TGSS) reconciles annually by cross-checking with the Spanish Tax Agency (AEAT).
- Mandatory fixed monthly contribution even if you invoice €0, except for specific reductions (work-life balance, maternity).
- Option to change bracket up to 6 times per year to adapt to the business cycle.
- Comprehensive coverage: pension, temporary incapacity, maternity, cessation of activity, public healthcare.
- Quarterly VAT (Modelo 303) if the activity is taxable; quarterly Personal Income Tax (IRPF) (Modelo 130) and annual (Modelo 100).
🇬🇧 United Kingdom (self-employed)
The British self-employed registers with HMRC via a Self Assessment and operates under a "pay as you earn" principle: there is no mandatory monthly contribution, everything is settled annually.
- Online registration in minutes, generally free.
- Class 2 and Class 4 National Insurance Contributions (NICs) settled together with income tax in January of the following year.
- Progressive income tax from 20% (basic rate) to 45% (additional rate), with a tax-free personal allowance of around £12,570.
- Free public healthcare (NHS) by residence; no specific mandatory monthly contribution.
- VAT only mandatory if turnover exceeds the threshold (~£90,000).
🇩🇪 Germany (Freiberufler / Gewerbetreibender)
Germany distinguishes two figures: Freiberufler (liberal professions: doctors, lawyers, architects, journalists, translators, and in many cases programmers) and Gewerbetreibender (commercial activity). Freiberufler enjoy advantages: they do not pay Gewerbesteuer (local trade tax) and their accounting is simplified.
- No mandatory fixed social contribution: public social security (Krankenkasse) is optional for the self-employed; many opt for private insurance (PKV).
- Public pensions: voluntary for most professions, mandatory for some (artists via Künstlersozialkasse, certain healthcare professionals).
- Progressive Einkommensteuer from 14% to 45% (plus solidarity surcharge).
- VAT (Umsatzsteuer) at 19% (or 7% for reduced-rate services); exemptions for certain liberal professions.
- Registration is more bureaucratic than in the UK/US: it requires tax registration (Steuernummer) and, in many cases, a professional declaration.
🇺🇸 United States (sole proprietorship / 1099 contractor)
In the US, being self-employed is the simplest possible form: if you have an EIN or SSN, you can invoice directly as a sole proprietor. Taxation is federal + state, and the real cost depends heavily on the state (California ~ +13%; Texas, Florida or Washington ~ 0% state tax).
- No monthly contribution: everything is settled in the annual return (Form 1040 + Schedule C + Schedule SE).
- Self-employment tax of 15.3% (Medicare + Social Security) on net profits, in addition to income tax.
- Progressive federal income tax from 10% to 37% + state tax depending on jurisdiction.
- Private health insurance required for reasonable access to healthcare (no public system comparable to Spain's SNS or the UK's NHS).
- Quarterly estimated tax payments to avoid penalties.
🇦🇺 Australia (ABN)
The Australian Business Number (ABN) can be obtained in minutes on the Australian Business Register website. It is the fastest way to start invoicing as a self-employed worker in any developed country.
- Free, online registration (ABN granted almost instantly).
- No fixed monthly contribution: tax is paid via PAYG (Pay As You Go), quarterly or annually.
- Tax-free threshold up to AUD 18,200 per year; thereafter, rates from 19% to 45%.
- Medicare funded by all residents (no specific self-employed contribution required).
- Pensions (superannuation) are voluntary for the self-employed; many are arranged privately.
🇵🇹 Portugal (trabalhador independente)
Portugal has become a popular destination for European self-employed workers thanks to its simplified regime and stable IRS. The simplified regime allows taxation on a presumed percentage of income (75% for professional services, for example), simplifying bookkeeping.
- First year of activity exempt from Segurança Social contributions; thereafter, a variable monthly contribution depending on income (~€149/month at the minimum base).
- Progressive IRS from 14.5% to 48% (2025 scale); the simplified regime or organised accounting can be chosen.
- VAT (IVA, the Portuguese one, not the Spanish IVA) at 23% standard rate, with exemptions for certain activities up to €15,000 turnover.
- Simple registration with Finanças + Segurança Social.
- Note: the former NHR (Non-Habitual Resident) regime stopped accepting new applications in 2024; it has been replaced by the IFICI regime for highly qualified professionals, with different requirements.
🇪🇪 Estonia (e-Residency + OÜ)
Estonia does not fit the classic "self-employed" label, but its e-Residency programme allows non-residents to incorporate and run an Osaühing (OÜ) — a limited liability company — entirely online. It is popular among digital professionals who prefer to operate through a company.
- No tax on retained profits: 20% corporate tax is only triggered when dividends are distributed.
- 100% online incorporation in 1-2 days, without residency requirements.
- Useful for digital nomads invoicing EU clients.
- However, your personal tax residence remains where you actually live: if you reside in Spain >183 days, you are taxed in Spain on worldwide income despite owning an Estonian company.
- Risk of permanent establishment in the country from which you operate: the Spanish Tax Agency (AEAT) may attribute the profits to Spain if the company's real substance is here.
When relocating or structuring abroad is worth it
Simple arithmetic usually says: "I'll pay less abroad". But the real calculation requires factoring in three variables that are often ignored: tax residence, double taxation and permanent establishment.
Heads up: Relocating your activity is not the same as relocating your tax residence. In Spain, you are a tax resident if any of these criteria applies: (i) more than 183 days of presence, (ii) centre of economic interests in Spain, (iii) non-separated spouse and minor children in Spain. Without an effective change of residence, the AEAT can keep claiming Personal Income Tax (IRPF) on your worldwide income even if you invoice through an Estonian or US company.
Some typical scenarios where evaluating other jurisdictions does make sense:
- Effective relocation to another country (living and working there more than 183 days, with housing, bank accounts and social life). In this case the applicable Double Tax Treaty (DTT) should be analysed and, if you return to Spain in the future, the Beckham Law should be assessed.
- Digital nomads with clients in different countries: the Spanish international teleworking visa + Beckham Law can be more efficient than structuring abroad.
- Digital professionals with EU clients who prefer to operate through a company: an Estonia OÜ may make sense, provided personal tax residence is properly handled.
- Professionals with high one-off income (consultants closing large projects): the marginal tax rate gap between Spain and other jurisdictions can be significant, but the tax cost of leaving must be considered (Spain's IRPF "exit tax" on latent capital gains in some structures).
Case studies
Case 1 — Freelance developer considering Lisbon
Marta, a Madrid-based self-employed worker with €45,000 of annual turnover and EU clients, is considering relocating to Lisbon. Her current RETA contribution is ~€390/month (bracket 12). In Portugal, under the simplified regime, her Segurança Social contribution would be around €200-280/month after the first year. Estimated saving: ~€1,500-2,000/year. But she must effectively move her tax residence (183 days + centre of interests), not just invoice from there; and, above all, the old Portuguese NHR regime no longer accepts new applications.
Case 2 — Designer with US clients
Jorge, a Spanish self-employed worker with 70% of his clients in the US, is considering setting up a Delaware LLC to invoice. If he does not physically relocate, the AEAT will treat the LLC as a sham entity and attribute the profits to him. If he wants real tax savings, he must move to the US (with the appropriate visa) or accept that the LLC will be taxed in Spain as a de facto Spanish company.
Case 3 — Consultant with Estonian e-Residency
Elena, resident in Spain, opens an Estonian OÜ to invoice consultancy work to European clients. Appeal: 20% corporate tax only when dividends are distributed. Reality: if she lives in Spain, her personal tax residence remains Spanish; any dividends she distributes will be taxed at 19-28% IRPF. In addition, the AEAT may argue permanent establishment in Spain if real operations are here. The structure only makes sense if activity and effective management are in Estonia.
Case 4 — US engineer moving to Spain
Jake, a software engineer in San Francisco on a 100% remote contract, obtains the Spanish international teleworking visa and moves to Valencia. By meeting the digital nomad requirements of the Beckham Law, he is taxed at 24% on his Spanish salary (up to €600,000), not as self-employed. This is the mirror image of relocating abroad: Spain can be a competitive jurisdiction for inbound non-residents.
Common mistakes when structuring abroad
- Invoicing from another jurisdiction without moving tax residence: the AEAT can claim IRPF on all your worldwide income. Having a company abroad is not enough.
- Forgetting permanent establishment: if effective management, the team or operations are in Spain, the foreign company may be reclassified as Spanish de facto.
- Ignoring DTTs: each Double Tax Treaty has its own rules on where each type of income is taxed. Assuming the most favourable jurisdiction applies automatically is a mistake.
- Confusing legal incorporation with tax residence: the company can be in Estonia and your tax residence in Spain; these are two different things.
- Failing to plan the tax exit from Spain: the change of residence can trigger the "exit tax" under art. 95 bis LIRPF on shares and latent capital gains in certain cases.
- Ignoring reporting obligations: Spanish residents holding foreign assets have obligations (Modelo 720, Modelo 721 for crypto-assets) whose breach carries penalties.
- Forgetting social and healthcare coverage: relocating activity without planning health insurance, pension and sick leave can prove very expensive in the medium term.
Checklist before changing jurisdiction
Analyse your real situation
- Are you going to move your tax residence (physically living more than 183 days a year in the new country) or just invoice from there?
- Where is your centre of economic interests (family, main home, clients, bank accounts)?
- Do you have relevant latent capital gains (shares, crypto) that could trigger the exit tax when leaving Spain?
- Does your activity work online and independently of physical location?
Review the destination jurisdiction
- What DTT does Spain have with the destination country and what does it say about your type of income?
- What are the real costs (social contributions, taxes, private health insurance, accounting, advisors)?
- What social coverage will it give you (pension, sick leave, unemployment) compared to the Spanish one?
- Does the visa or residence permit allow you to work as self-employed there?
Plan the exit and the landing
- Notify the AEAT of your deregistration from RETA and loss of tax residence (Modelo 030 + obtain a certificate of residence in the new country).
- Review outstanding reporting obligations (initial Modelo 720 on foreign assets) and asset traceability.
- If you return to Spain in the future, assess the Beckham Law: you must not have been a tax resident for the previous 5 tax years.
- Get advice from local professionals in the destination country, not only from Spanish advisors.
Frequently asked questions
Can I be self-employed in Spain and in another country at the same time?
Yes, but be careful: within the EU there is a principle of single applicable social security legislation. Regulation 883/2004 sets out rules to avoid double social contributions. The A1 form has to be used and, in many cases, you only contribute in one country even if you work in several.
Is it legal to invoice from an Estonian company while living in Spain?
It is legal to incorporate the company, but tax residence and permanent establishment are separate tests. If you live in Spain, your IRPF is determined by your personal residence; and if the Estonian company is effectively managed from Spain, the AEAT may reclassify it as a Spanish-resident company with all the tax consequences.
Which country has the lowest real tax burden for the self-employed?
It depends on income level and the coverage you need. At high income levels, the US (states with no state tax such as Florida or Texas) and the United Arab Emirates tend to be lower. At medium levels, Portugal and Estonia are competitive. The UK and Australia have higher rates but a cheaper start. And, in some cases, the Beckham Law makes Spain a competitive option for inbound professionals.
What happens to healthcare if I stop being self-employed in Spain?
If you deregister from RETA and move your residence, you lose the right to Spanish public healthcare (except for grace periods). Within the EU, the European Health Insurance Card or the S1 form can cover the transition; outside the EU you will need private insurance.
Is it better to open a Delaware LLC or an Estonian OÜ?
It depends on the client and the profile. A Delaware LLC has a good reputation with US clients and offers pass-through taxation (the member is taxed, not the company). An Estonian OÜ is better for European clients and for deferring tax on retained profits. Both require analysing your tax residence and permanent establishment risk.
Do digital nomad visas allow you to be self-employed?
Yes, in most countries that offer them (Portugal, Spain, Estonia, Croatia, Dubai, Costa Rica…). Each has its own minimum income and duration requirements. In Spain, the international teleworking visa allows access to the Beckham Law, which makes it particularly attractive.
Conclusion
There is no "best country" to be self-employed in absolute terms: there is a country that best fits your income level, type of activity, need for social coverage and willingness to actually relocate. Spain is expensive in monthly contributions but offers comprehensive coverage; the UK and Australia are cheap at the start but demand self-managed social planning; Estonia and Portugal are alternatives for digital profiles; the US rewards high billing but penalises with healthcare costs. The golden rule: before making the decision, model the real situation (tax residence included) and understand that moving your invoicing is not the same as moving your life. And if you plan to return to Spain, consider the Beckham Law as a key piece of the return.
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