Self-employed in Spain vs LLC in the US: complete tax comparison

35% to 47% of income between IRPF and the RETA fee. Real tax comparison: autónomo in Spain pays 30-47% (IRPF + Social Security €300+/mo). US LLC can achieve 0% federal tax. Numeric breakdown at €40K, €60K and €100K income levels.

A Spanish autónomo in a mid bracket hands over 35% to 47% of income between IRPF and the RETA fee (200 to 1,600 euros a month); a US pass-through LLC pays 0% federal and shifts the calculation to your local return.

If you're a freelancer or sole trader billing international clients, whether you file as a US Schedule C sole proprietor, a UK sole trader, a Canadian self-employed worker, an Australian sole trader, or a Spanish autónomo, you already know how quickly income tax, self-employment tax, and social contributions eat into what you keep. A US LLC owned by a non-resident offers a very different structure. We use the Spanish autónomo regime as the reference point in this article because it's one of the most punitive, but the logic applies anywhere a freelancer is getting hit with high marginal rates and fixed social contributions. Here's an honest, detailed comparison with real numbers.

The autónomo burden today

The Spanish autónomo system was designed for a neighborhood bakery, not for a UX designer working with startups in San Francisco. Yet thousands of digital freelancers keep paying as if they were selling bread.

Let's do the real math. Suppose you bill €5,000/month (€60,000/year):

Autónomo social security contribution: ~€300/month (~€3,600/year with the new income-based system)
IRPF: Between 24% and 37% on your net profit (progressive rates from 19% to 47%)
IVA (VAT): 21% that you collect and then pay quarterly (but generates massive paperwork. Modelo 303, Modelo 130, Modelo 190, Modelo 347...)

The result: from those €60,000, you might keep €32,000-38,000 after taxes. Nearly half is gone.

And the worst part isn't how much you pay. it's that you don't have to pay that much.

Why the autónomo model fails digital freelancers

The contribution is effectively fixed: you pay even if you don't bill. With the new income-based system, your contribution rises when you do well. Rewarding mediocrity.
IRPF is progressive and relentless: above €35,000 you're already at the 37% bracket. Above €60,000, you reach 45%. Above €300,000, it hits 47%.
Quarterly advance payments: every quarter you pay 20% of your estimated profit to Hacienda. Advancing money before you know if you've actually earned it.
IVA on international operations: a bureaucratic labyrinth. Reverse charge? Modelo 349? OSS? Most people get it wrong.
Zero asset protection: if your business has a legal problem, your personal assets respond. Your house, your savings, everything.
Quarterly model filing obligations: Modelo 303 (VAT), Modelo 130 (IRPF advance), Modelo 111 (withholdings), annual summaries. Every quarter, without fail, on penalty of fines. Now is the moment to ask for help. At Exentax we open the case, file what is missing and reply to the relevant authority for you.

The US LLC alternative

A US LLC is not the only alternative, but for digital freelancers with international clients, it's the most efficient:

0% US federal tax (as a Disregarded Entity with a non-resident owner)
You declare in Spain only the net profits (after legitimate business expense deductions)
Access to US banking and payment tools (Mercury, Stripe, PayPal US)
Complete asset protection: your personal assets are separated
No fixed monthly contribution: there's no equivalent of the autónomo quota

How the savings actually work: pass-through taxation

Your LLC as a non-resident Disregarded Entity works with pass-through taxation:

Your LLC invoices your international clients: in USD via Stripe, wire, or ACH
Your LLC pays operational expenses: software, tools, services, subscriptions
Your LLC pays $0 US federal tax: zero
You receive net profits: via Owner's Draws to your personal account
You declare in Spain only the net profits, on a significantly reduced taxable base

The deductible expenses you can only dream about as autónomo

With an LLC, you can deduct as operational expenses everything that is "ordinary and necessary" for your business:

Your entire tech stack: hosting, domains, APIs, SaaS, AI tools
Hardware: computer, monitor, headphones, microphone, camera
Training: courses, bootcamps, conferences, technical books
Business travel: flights, hotels, per diems (for client meetings, industry events)
Coworking or home office: percentage of rent if you work from home
Communications: internet, phone, VPN
Professional services: accounting, tax advisory, insurance
Banking fees: though with Mercury they're $0 on wires

Example with real numbers

Gross income: €72,000/year

LLC deductible expenses: €18,000/year (software, hardware, training, travel, professional services)

Net profit (pass-through): €54,000/year

Tax burden in Spain on €54,000: ~€12,000 (effective rate ~22%)

Total paid: €12,000 + €1,500 (LLC maintenance) = €13,500 → 18.75% effective rate

As autónomo: €72,000 - limited expenses = taxable base ~€62,000

IRPF ~35%: ~€21,700 + autónomo contribution €3,600 = €25,300 → 35.1% effective rate

Difference: €11,800/year more in your pocket. Every year. And the difference grows the more you bill.

The autónomo contribution: Spain's most absurd tax

The autónomo quota is an anomaly in Europe: you pay a fixed amount each month regardless of whether you bill or not. With the new income-based system, the quota increases as you earn more. the system literally penalizes success.

Meanwhile, with a US LLC: there is no equivalent monthly contribution. You pay for annual maintenance (Exentax fees, Registered Agent, state fees if applicable), but there's no monthly tax for simply existing as a business.

"Is this legal?"

Yes. Completely: a US LLC is a business structure recognized internationally. It's not an opaque offshore in the Cayman Islands; it's a company registered in a US state, with an EIN (tax number), Registered Agent, and annual filings with the IRS.

The key is having the structure properly set up and complying with your tax obligations in Spain. That's where the difference between doing it right and doing it wrong lies. Spanish tax resolution DGT V0290-20 addresses the treatment of income from foreign entities for Spanish tax residents.

Do I need to cancel my autónomo registration?

It depends on your situation. There are cases where it makes sense to maintain autónomo registration in Spain and operate the LLC in parallel. In others, it makes sense to deregister. There's no universal answer. it depends on:

Your billing volume
The percentage of international vs. domestic clients
Your personal situation (accumulated contributions, benefits, etc.)
Whether you're planning a tax residency change in the medium term
Your need for Spanish public healthcare through social security contributions

The real cost of doing nothing

Every year you continue as autónomo without optimizing your structure, you leave €8,000-20,000 on the table that you could be saving legally. In five years, that's €40,000-100,000.

The fintech stack that makes it all work

Frequently asked questions

Can I be autónomo AND have a US LLC at the same time?

Yes. Many of our clients maintain autónomo registration for domestic clients while using the LLC for international billing. The two structures can coexist.

Will I still have Spanish healthcare (Seguridad Social)?

Only if you maintain autónomo contributions. If you deregister as autónomo, you lose access to the Spanish public healthcare system through Social Security. Some clients switch to private health insurance.

Do I need to tell Hacienda about my LLC?

Yes. You must declare the LLC's profits in your IRPF return and report the LLC as a foreign asset in Modelo 720 if applicable (assets > €50,000). Full transparency is required, and it's what makes the structure legal.

How do I convert USD to EUR without losing money on exchange rates?

Use Wise Business. The typical EUR/USD conversion costs 0.4-0.6% at the mid-market rate. Compare this to Spanish banks charging 2-4% markup plus wire fees of €15-50.

Can I deduct the autónomo contribution from my LLC profits?

No. The autónomo contribution is a Spanish Social Security payment, not an LLC business expense. However, it is deductible against your IRPF in Spain.

What if I have domestic Spanish clients too?

You can bill domestic clients through your autónomo registration and international clients through your LLC. This hybrid approach is common and perfectly legal when properly structured.

The real cost of doing nothing: a 5-year projection

These figures assume €72,000/year billing and grow proportionally with income. At €120,000/year, the five-year savings exceed €100,000.

To keep going on this thread, Advantages and disadvantages of a US LLC for non-residents: honest analysis and Why not to open an Estonian company: the US LLC wins for most non-residents fill in nuances this guide only touched on.

Next steps

Now that you have the full context, the natural next step is to map it against your own situation: what fits, what doesn't, and where the nuances depend on your residency, your activity and your volume. A quick review of your specific case usually saves a lot of noise before taking any structural decision.

Tax compliance in your country: CFC, controlled-foreign rules and income attribution

A US LLC is a fully legal, internationally recognized vehicle. But compliance does not end at incorporation: as an owner who is tax-resident elsewhere, your local tax authority still has the right to tax what the LLC earns. The key is under which regime.

By jurisdiction

Spain (LIRPF/LIS). An operative single-member disregarded LLC (real services, no significant passive income) is generally treated under income attribution (art. 87 LIRPF): the LLC's net profits are attributed to the member in the year they arise and integrated into the general IRPF base. If instead the LLC elects corporation treatment (Form 8832) and is controlled by a Spanish resident with mostly passive income, the CFC regime (art. 91 LIRPF for individuals, art. 100 LIS for companies) can apply. The choice is not optional: it depends on economic substance, not on the label.
Information returns. US bank accounts with average or year-end balance >€50,000: Form 720 (Law 5/2022 after CJEU C-788/19, 27/01/2022, penalties now under the general LGT regime). Related-party transactions and dividend repatriation: Form 232. US-custodied crypto: Form 721.
Spain–US tax treaty. The treaty (BOE 22/12/1990, Protocol in force 27/11/2019) governs double taxation on dividends, interest and royalties. An LLC without a permanent establishment in Spain does not by itself create a PE for the member, but effective management can if all activity is run from Spanish territory.
Mexico, Colombia, Argentina and other LATAM jurisdictions. Each has its own CFC regime (Mexico: Refipres; Argentina: foreign passive income; Chile: art. 41 G LIR). Common principle: profits retained inside the LLC are deemed received by the member if the entity is treated as transparent or controlled.
United Kingdom (HMRC perspective). For UK tax-resident members, HMRC has long held — confirmed in Anson v HMRC [2015] UKSC 44 — that a US LLC can be transparent for UK tax purposes in some scenarios but opaque in others; the result depends on the specific operating agreement and on how the LLC's income is constituted. The default HMRC position (INTM180020) is to treat LLCs as opaque companies for UK purposes, meaning distributions are dividends and undistributed profits do not flow through. Operative LLC profits earned by a UK-resident member are usually subject to UK income tax on distribution (or to dividend tax at 8.75 / 33.75 / 39.35 % rates if the LLC is treated as a corporation). The UK CFC regime (Part 9A TIOPA 2010) only catches LLCs treated as foreign companies and only where the chargeable profits gateway applies; a substantively trading LLC with active management offshore typically falls outside it. UK members must also consider Self Assessment SA106 (foreign income), the Worldwide Disclosure Facility for any prior gaps, and FBAR-style disclosures where US accounts exceed reporting thresholds.
United States residents (the other side of the table). A US tax resident who owns a single-member LLC has nothing exotic to file: the LLC's income flows to Schedule C, Schedule E or Form 1065 depending on classification, and self-employment tax (15.3 %) applies to active trade-or-business income. The federal "no tax" outcome described above only applies to non-resident aliens with no ECI; a US person owes federal and state income tax in the normal way regardless of where the LLC is formed. The CFC and PFIC rules (IRC §951A GILTI, IRC §1297) are relevant for US persons holding foreign corporations, not for domestic LLCs; FATCA Form 8938 still applies for foreign financial accounts, including stablecoin custody arrangements abroad.
Ireland, Canada and Australia. Irish Revenue typically treats US LLCs as opaque (TDM Part 35-01-04), so an Irish-resident member is taxed on distributions, not on the LLC's annual profit; Form 11 reporting applies. The CRA in Canada also treats LLCs as corporations for Canadian tax (Folio S5-F2-C1), which generates mismatch issues with US tax-treaty benefits — careful planning around Article IV(7)(b) of the Canada–US treaty is essential, plus T1135 reporting for foreign property over CAD 100,000. The Australian ATO considers most US LLCs to be foreign companies, with Australian residents subject to attribution under the CFC rules in Part X of the ITAA 1936 if control and tainted-income tests are met. In all three jurisdictions, hybrid mismatches under OECD BEPS Action 2 (and locally enacted anti-hybrid rules) should be reviewed before the LLC actually starts trading.
Practical takeaway across jurisdictions. Whatever your residence, the chain of decisions is the same: (1) confirm how your local tax authority classifies a US single-member LLC (transparent vs opaque); (2) check whether your local CFC or attribution regime catches the LLC's profits (active vs passive income tests, control thresholds, low-tax safe harbours); (3) map out the relevant tax-treaty provisions on PE, dividends, interest and royalties; (4) document a tangible operating substance trail (contracts in the LLC's name, separate banking, US registered agent, EIN, Form 5472 filings); (5) align disclosure forms in your country (Form 720 in Spain, Form 11 in Ireland, T1135 in Canada, IDS in Australia, SA106 in the UK). Skipping any of these creates downside risk that no amount of US-side tax efficiency can compensate. Exentax handles the US-side compliance and coordinates with your local advisor on the rest so the structure stays defensible end to end.

On the same topic

How to read the autónomo-vs-LLC comparison as a profile-based exercise rather than a winner-take-all debate

The autónomo-vs-LLC comparison reads more usefully when it's treated as a profile-based exercise: the same comparison can land differently for two profiles that differ in billing volume, geographical mix of clients, frequency of distributions and complexity of the operating chain. Reading the comparison without the profile in mind tends to push the conclusion toward whichever option is louder in general discussion.

A useful approach is to define three profiles — low, medium, high billing — and walk the comparison through each, recording for each profile which structure emerges as more efficient. This profile-based view replaces the impression of a single answer with a small map that survives the first real year.

How to capture the per-profile result in a short note

The per-profile result captures more durably in a short, dated note that lists, for each profile, the structure that emerged as more efficient and the two or three reasons that drove that conclusion. This note then serves as a reference whenever the actual profile shifts in a later year, so the full comparison doesn't need to be rebuilt from scratch.

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

> Free consultation, no strings attached

Practical rule: an operative LLC with substance, properly declared in your country of residence, is legitimate tax planning. An LLC used to hide income, fake non-residence or shift passive income with no economic justification falls within art. 15 LGT (anti-abuse) or, worse, art. 16 LGT (simulation). The facts decide, not the paperwork.

At Exentax we structure the entity to fit the first scenario and document every step so your local return can be defended in case of review.

Banking and tax facts worth clarifying

Fintech and CRS information evolves; here is the current state:

Notes by provider

Mercury operates with several federally chartered partner banks and FDIC coverage via sweep network: mainly Choice Financial Group and Evolve Bank & Trust, with Column N.A. still in some legacy accounts. Mercury is not itself a bank; it is a fintech platform backed by those partner banks. If Mercury closes an account, the balance is typically returned by paper check mailed to the account holder's registered address, which can be a serious operational problem for non-residents; keep a secondary account (Relay, Wise Business, etc.) as contingency.
Wise ships two clearly different products: Wise Personal and Wise Business. For an LLC you must open Wise Business, not the personal account. Important CRS nuance: a Wise Business held by a US LLC sits outside CRS because the account holder is a US entity and the US is not a CRS participant; the USD side operates via Wise US Inc. (FATCA perimeter, not CRS). In contrast, a Wise Personal opened by an individual tax-resident in Spain or another CRS jurisdiction does trigger CRS reporting via Wise Europe SA (Belgium) on that individual. Opening Wise for your LLC does not bring you into CRS through the LLC; a separate Wise Personal in your own name as a CRS-resident individual does report.
Wallester (Estonia) is a European financial entity with an EMI/issuing-bank licence. Its European IBAN accounts are within the Common Reporting Standard (CRS) and therefore trigger automatic reporting to the tax administration of the holder's country of residence.
Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.
Revolut Business: when paired with a US LLC, it operates under Revolut Technologies Inc. with Lead Bank as its US banking partner. The account delivered is a US account (routing + account number); no European IBAN is issued to a US LLC. The European IBANs (Lithuanian, Belgian) belong to Revolut Bank UAB and are issued to European clients of the group. If you are offered a European IBAN tied to your LLC, confirm exactly which legal entity holds that account and which regime it reports under.
Zero tax: no LLC structure delivers "zero tax" if you live in a country with CFC/tax transparency or income attribution rules. What you achieve is no double taxation and correct reporting at residence, not elimination.

Tax burden as a self-employed worker in Spain

Read this section as a checklist with teeth: each point flags a real failure mode we have seen in cross-border LLC files. Skip none of them - most reassessments and account closures we clean up later trace back to one of these items.

IRPF (Personal Income Tax)

The numbers and the calendar matter - get either wrong and the rest unravels.

Self-employed contribution (RETA)

Most of the avoidable damage we see in this exact point comes from skipping the documentation step, not from the underlying tax logic.

VAT

Typical outcome

If it is not clean here, every downstream assumption becomes negotiable in front of the authority.

Tax burden with a US LLC

Our position here is deliberate and conservative: we optimise for what survives an inspection, not for the most aggressive headline number. The points below are the ones we are willing to defend in writing. At Exentax we have closed clients in exactly this spot at zero penalty. Speaking up early pays off — and saves you five figures.

US federal tax: $0 (without ECI)

If it is not clean here, every downstream assumption becomes negotiable in front of the authority.

State tax

The numbers and the calendar matter - get either wrong and the rest unravels.

Exentax today update: Spain self-employed vs LLC, today numbers

The real comparison hinges on three levers: contributions, effective rates and admin burden.

Spain today self-employed contributions. Tiered system on net income, minimum ~EUR 225/month and maximum ~EUR 590/month (RDL 13/2022). Flat rate EUR 80/month for the first 12 months, extendable 12 more if income < SMI. Marginal IRPF up to 47-50% depending on region.
SMLLC + Spain tax residence. A disregarded LLC pays no federal corporate tax (unless C-Corp election). The non-resident reports allocated profits in Spanish IRPF (income attribution, LIRPF art. 88). Annual structure cost: ~USD 225 WY / 450 DE / 125 NM.
Realistic hybrid setup. Keep autónomo in Spain for Spanish clients (invoice with VAT and withholding) + LLC for international clients in USD. The LLC does not exempt you from Social Security in Spain if your main activity is there.

Frequently asked questions

Does the LLC save me self-employed contributions? Not automatically. Living and habitually working in Spain, TGSS requires self-employed registration. The LLC reduces VAT only on invoices to non-EU clients.

When does the LLC really pay off? Above ~EUR 50-60k billing to international clients in USD/EUR. Below that, cost and complexity rarely pay off.

What if I am thinking of leaving Spain? It changes the calc entirely. Moving to a non-CFC, territorial jurisdiction (Andorra, Cyprus non-dom, UAE) lets the LLC operate in its natural regime.

When jumping from self-employed to LLC pays off, the Exentax way

The decision is never "LLC always" or "LLC never": it depends on your average client, your compliance cost and the substance you can defend. We see one profile each month where net savings cover the complexity and another where they do not.

If you invoice global clients while still resident in Spain, a properly filed LLC streamlines collections and removes Spanish VAT on non-EU services, but it does not erase IRPF: income is attributed at residency.
If your main client is Spanish or public, the saving is usually zero and the LLC adds cost; stay self-employed or open an SL.
If you mix digital income with crypto or trading, you want an audited mixed structure before touching anything.

At Exentax we run a sixty-minute diagnostic with your real numbers: try the Exentax calculator or book the call and we tell you what fits, without selling you smoke.

Want to discuss it now? Message us on WhatsApp and we'll get back to you today.

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For state-specific details, see our Wyoming LLC service page with closed costs and timelines.

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