Self-employed in Spain with a US LLC
You live here, you work from here and you get paid through a US LLC. It is legal and it is common, but hardly anyone has told you what Spain sees when it looks at that LLC. We run it for €100 a month, on one rule that puts everything in order: you invoice your LLC for 100 % of what the LLC earns from your work.
Paul, a developer in Valencia, and his Wyoming LLC
Paul is tax resident in Spain. In 2024 he opened a Wyoming LLC because his clients are American companies that prefer to contract with a US entity and pay by domestic transfer. The LLC has a Mercury account, takes in about €8,000 a month and has no staff and no office: Paul does everything, from home. Part of the money stays in the LLC account and part he transfers to himself "when he needs it".
In the United States his LLC is disregarded and he, a foreigner with no business there, pays no federal tax. Paul took that to mean that whatever stayed in the LLC was taxed nowhere. It is not, and that is exactly where the trouble starts.
What Spain looks at
| What it looks at | Why it matters to you |
|---|---|
| Where the work is done | You do it, in Spain. The income from that work is income from a business carried on here. |
| Where the LLC is run from | If decisions are taken at your home in Valencia, the place of effective management is in Spain, and an entity managed from Spain can be treated as resident here (article 8 of the Corporate Income Tax Act). |
| What the member is paid for the work | What a member does for his own entity is valued at market price, invoiced or not (article 18 of the Corporate Income Tax Act and article 41 of the Personal Income Tax Act). |
On top of that, the Spanish tax authorities classify each LLC case by case: sometimes as a pass-through entity whose results are taxed directly on the member, sometimes as a foreign company. On either reading, the profit that comes from your work in Spain ends up having to be reported in Spain.
Our rule: 100 % to the LLC
You register as self-employed and invoice your LLC, every month, for everything the LLC has earned from your work: what it took in less its own expenses. Not 60 %, not "a reasonable salary": 100 %.
| If you leave a margin in the LLC | If you invoice 100 % | |
|---|---|---|
| Profit left in the LLC | Money taxed nowhere | None: it has all left as your fees |
| Market price of your work | You must justify charging less than you generate | Nothing to argue: you charge all you generate |
| Place of effective management | If treated as resident, there is profit to tax in it | Even if challenged, there is no profit to tax |
| What you report in Spain | Part of it, the rest in limbo | All of it, in your income tax, as business income |
It is the most prudent approach we know for this structure, and the only one we work with. It does not make the LLC invisible or rule out every possible discussion with the tax office; what it does is make sure that anyone who looks finds the whole income reported where it belongs.
One of Paul's months
| Item | Amount |
|---|---|
| What the LLC takes in from its clients | €8,000.00 |
| Expenses paid by the LLC (software, registered agent, bank fees) | €600.00 |
| Paul's invoice to his LLC (100 % of the result) | €7,400.00 |
| Spanish VAT on that invoice | €0.00 · outside the scope |
| Income tax withholding | €0.00 · the LLC does not withhold |
| Profit left in the LLC | €0.00 |
As nobody withholds, every quarter he files form 130: 20 % of his cumulative net income (what he invoiced less his own expenses, social security included). He also files form 303, even with no VAT to pay, and form 390 in January.
VAT on your invoice. Services supplied by a professional to a business established outside the EU are outside the scope of Spanish VAT (article 69.Uno.1 of the VAT Act), which is why your invoice to the LLC carries none. That rule assumes the LLC is established abroad. If your LLC has clients in Spain or is run entirely from here, we review it before the first invoice is issued.
What still needs watching
- Form 720. Your interest in the LLC and the foreign accounts you hold or sign on are reported if their group exceeds €50,000. We check it every 31 December.
- Social security. You contribute on your real income, which is now all of it.
- Spanish clients of the LLC. They change the VAT analysis and the residence analysis. Tell us before signing the first one.
- United States. Your LLC has its own information returns with the IRS, with heavy penalties if they are missed. We do not file them: whoever looks after the LLC there does, and we coordinate with them.
What we ask you for
For your books as a self-employed person and the LLC's books to say the same thing, we need to see both. At the start: the LLC documents (formation, operating agreement and EIN), its accounts for the last closed year, whatever it has filed with the IRS and the contact details of whoever looks after it there. And every month: the statement of the LLC's account or payment provider, its expenses and its books up to date. With that we reconcile what the LLC earned with what you invoice it, and we coordinate with whoever files its US returns so that both versions match.
What €100 a month includes
- The monthly reconciliation between the LLC's books and your invoicing, and coordination with whoever looks after the LLC in the United States.
- Your monthly invoice to the LLC, numbered and with the right legal wording, worked out from what the LLC took in and spent that month.
- Forms 130 and 303 every quarter and the annual 390, filed.
- Your income and expense books as a self-employed person.
- A check, at every year end, of whether form 720 applies.
- A warning when something in the LLC changes the analysis.
Not included: setting up the LLC, its US filings, your annual income tax return, or assistance in an audit or a tax notice, which are quoted separately.
Who this is not for
If your LLC has several members, staff, sells goods from stock, or you want to leave profits inside to reinvest, your case needs its own study rather than a monthly fee. Tell us and we will say what applies.