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Spain PEO: Benefits & Best Services in 2024

VERDICT: The best Spain PEO in 2024 is Horizons. Horizons is a top Spain PEO company through the strength of its SaaS platform and in-depth knowledge of Spain employment law. 

Key Takeaways

  • Spain PEOs provide comprehensive HR and employment solutions to businesses operating in Spain.
  • PEOs handle administrative tasks such as payroll, benefits, and compliance, allowing companies to focus on core operations.
  • The top 5 Spanish PEO companies are Horizons, Deel, Omnipresent, People2.0, and Remote. 

The strategic advantages of extending operations into Spain are significant: as the fifth-largest economy in the EU and with a diverse population of approximately 47 million, Spain offers a substantial commercial and consumer market. Its geographical positioning bridges Europe, Africa, and Latin America, and a well-educated, skilled workforce enhances its appeal.

To hire employees in Spain quickly and cost-effectively, many companies find it beneficial to engage a Spanish professional employer organization (Spain PEO). Read more about how these expansion services work and how using a PEO in Spain can save you time and money.

What is a Spain PEO?

what is a spain peo
How a Spain PEO Works


Expanding a business to a foreign country can be complex and challenging, especially when navigating local employment regulations, managing HR functions, and ensuring compliance with local regulations. This is where a Professional Employer Organization (PEO) can provide valuable support. In Spain, PEOs offer comprehensive HR and employment solutions to help businesses simplify their operations and successfully establish a presence in the Spanish market. 

A Spain PEO acts as an intermediary between an employer and its employees, taking on payroll administration, benefits management, tax compliance, and legal compliance. Companies can offload these administrative tasks by partnering with a PEO and focus on their core business activities.

Our Spain EOR guide describes the slightly different Spain HR outsourcing solution known as an Employer of Record. 

Is PEO Legal in Spain?

Professional Employment Organizations (PEOs) in Spain operate within the legal framework of the country’s employment laws and regulations. Spanish authorities recognize and authorize these organizations to act as the employer of record on behalf of client companies.

This arrangement is a compliant and legitimate way for domestic and international businesses to engage a workforce in Spain without needing to establish their own company in the country. It provides a flexible and efficient solution for companies looking to navigate the complexities of Spanish employment regulations while focusing on their core operations and expansion efforts in one of Europe’s prominent business destinations.

Spain PEO Services

Spain PEOs offer various services to support foreign workers and businesses operating within the country. These services include:

  1. HR Management: Like a comprehensive in-country HR department, EOR services cover benefits management, creating a formal contract to hire employees, adherence to working hours in Spain, resolution of HR-related concerns, and adherence to Spanish labor laws and management of legal liability.

  2. Payroll and Tax Management: PEOs take charge of payroll processing and tax administration, guaranteeing precise payments and deductions by Spanish regulations, which include compliance with the requirements of the relevant Social Security department.

  3. Compliance: PEOs bring their expertise in navigating Spain’s intricate legal landscape to the table, ensuring your company’s continued compliance. Often, a PEO will act as the official Employer of Record in Spain, legally employing local staff.

  4. Recruitment Support: Many PEOs provide recruitment services, aiding companies in sourcing, hiring, and onboarding new employees in Spain.

  5. Risk Mitigation: PEOs assist in mitigating the risks associated with employing personnel in a foreign country. This includes managing employment disputes and ensuring workplace safety measures are upheld.

Benefits of a Spain PEO

Engaging a Spain PEO offers several benefits for companies looking to expand or establish operations in Spain:

  1. Cost savings: By partnering with a PEO, businesses can avoid the significant costs of setting up a legal entity, establishing a local HR team, and managing payroll and benefits administration. PEOs leverage their existing infrastructure and economies of scale to provide these services cost-effectively.

  2. Streamlined operations: PEOs handle all administrative tasks related to HR and employment, allowing companies to focus on their core competencies and strategic objectives. This streamlined approach can improve operational efficiency and help businesses maintain their competitive edge.

  3. Access to local expertise: PEOs deeply understand the local labor laws, regulations, and business practices in Spain. They can provide valuable guidance and support, helping companies navigate the complexities of the Spanish employment landscape and ensuring compliance with all relevant regulations.

  4. Compliance assistance: Spanish labor laws and regulations can be intricate, and non-compliance can result in significant penalties. PEOs stay up-to-date with the latest legal requirements and ensure that companies operate within the boundaries of the law. They handle payroll tax calculations, employee benefits, and other compliance-related tasks, reducing the risk of errors and penalties. They can also often help with Spanish work visas for foreign employees and digital nomad visas for those working in Spain for a foreign employer.

Disadvantages of a Spain PEO

Alongside the benefits, it is worth considering the potential downsides of hiring in Spain using a PEO. These include:

  1. Cost: Utilizing a PEO service can be more expensive than managing employees in-house, particularly if your company is large or plans to scale significantly in Spain.
  2. Control: While a PEO takes care of many administrative aspects, it also means you cede a certain level of control over your human resources operations. This could impact your company culture and the level of direct communication and engagement with your employees.
  3. Dependence: There’s a risk of becoming overly reliant on the PEO for important HR functions. If the PEO performs poorly or the relationship sours, it can disrupt your operations.

5 Best Spain PEOs

  1. Horizons is an international EOR provider headquartered in Europe with a long history and reputation as a hiring partner in Spain. With its user-friendly platform and additional hiring support through visa services, recruitment, and contractor support, Horizons is our choice for the top Spain PEO. Read more in our detailed analysis of the Horizons PEO service. 
  2. Deel provides a user-friendly platform that streamlines HR processes and compliance management. They offer localized payroll, contractor management, and HR support to simplify international expansion for businesses in Spain. Read more in our breakdown of Deel’s services and products.

  3. Omnipresent focuses on providing global employment solutions, including PEO services in Spain. Their platform offers a single interface for managing HR, payroll, and compliance, helping businesses scale internationally. For more information on what makes Omnipresent different, look at our Omnipresent review. 

  4. People2.0 specializes in providing flexible employment solutions for international businesses. With their PEO services in Spain, they offer tailored solutions, compliance support, and a robust technology platform. For more information, see our People2.0 Review. 

  5. Remote: Remote is a PEO platform that offers comprehensive HR, payroll, and compliance services for businesses expanding to Spain. They combine technology-driven solutions with localized expertise, ensuring smooth operations in the Spanish market. Read our Remote Review.

Is a Spain PEO the Same as a Spain Employer of Record?

Indeed, in Spain, a Professional Employment Organization (PEO) is frequently used interchangeably with a Spain Employer of Record (EOR). Both PEO and EOR terms pertain to entities or services that aid businesses in Spain with various HR-related duties, such as payroll management, compliance, and overseeing local employment obligations for their workforce. 

These organizations serve as intermediaries, enabling companies to hire and manage employees in Spain without establishing their own legal entities within the country. The specific services provided may vary among providers. Still, the fundamental role of both PEOs and EORs in Spain is to assist foreign companies in navigating local employment regulations and responsibilities.

Do Spain PEOs Help with Employment Contracts?

Yes, Spain Professional Employment Organizations (PEOs) typically assist with creating an employment contract as part of their comprehensive HR and employment services. In Spain, all employees must have a valid and compliant employment contract. When a company partners with a Spanish PEO, it often takes on the responsibility of drafting, managing, and ensuring compliance with employment contracts for the local workforce.

PEOs in Spain have expertise in the country’s employment laws and regulations, and they use this knowledge to help companies create employment contracts that adhere to the legal requirements and protect the interests of both the employer and the employee. This includes specifying terms and conditions of employment, such as job responsibilities, employee’s salary, working hours, benefits, notice period, sick leave, severance pay, observance of public holidays (there are around nine national public holidays in Spain, depending on which region you are in), social security contributions, paternity leave, maternity leave, and termination procedures.

By relying on a Spain PEO for employment contract management, businesses can benefit from the PEO’s local expertise and ensure that their employment agreements align with Spanish labor law and tax regulations (including minimum wage rules), contributing to legal compliance and smooth workforce management.

Spain PEOs — choose wisely

Spain PEOs are vital in helping businesses expand and establish a presence in Spain. By outsourcing HR and employment-related tasks, companies can focus on their core activities while enjoying cost savings, streamlined operations, and access to local expertise. However, it’s important to consider the potential trade-offs, such as reduced control over HR functions and the need to navigate cultural differences.

When selecting a Spain PEO, businesses should evaluate their specific needs, industry requirements, and the level of support required.

The top five Spain PEOs mentioned above, Safeguard Global, Deel, Omnipresent, People2.0, and Remote, offer a combination of expertise, technology, global coverage, and tailored solutions, making them excellent choices for businesses seeking comprehensive HR support in Spain.

FAQs

Yes, Spain PEOs can often assist with local talent acquisition and recruitment. They have access to local networks and can provide guidance on recruitment strategies, job market conditions, and local hiring practices. To find out whether a PEO provides recruitment support in Spain, you will need to contact that company. 

Yes, Spain PEOs cater to businesses of various sizes. Whether you are a small startup or a large multinational corporation, PEOs can adapt their services to meet your specific needs and help you navigate the complexities of the Spanish employment landscape.

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