Clients, contracts and late payment

It is for anyone considering, planning or carrying out a move to Spain who will work with clients there. You will win clients, agree terms that protect you, and know your next move when an invoice goes unpaid.

Start with "Finding your first clients in Spain as a newcomer". It shows how to build a pipeline through networks, platforms, coworking spaces and language. After that, read the pages on payment habits, contracts and deposits before you take on work. Keep the pages on late-payment law and chasing an unpaid invoice close by for when you need them.

Disputes over false self-employment, court procedures and invoice layout are not covered here.

Key rules

• Late interest: Late payment earns interest automatically from the day after the due date, at the European Central Bank rate plus 8 percentage points, reset every half-year.
• Recovery fee: When a business pays late you can also claim a fixed 40 euros for recovery costs without proving them, plus further costs you can prove.
• TRADE threshold: You count as economically dependent (TRADE) when at least 75% of your income comes from a single client.
• Payment term: Businesses must pay within 30 days of delivery of the work, and you can agree a longer term of up to 60 days at most, never more.
• Formal demand: A formal demand by burofax gives the client 8 to 10 days to pay.
• VAT on advances: IVA is due when you receive an advance, so invoice the advance with IVA and make the final invoice cover only the balance.

Clients, contracts and late payment: the whole process, step by step

• Find your first client through contacts, former colleagues, LinkedIn and local events, then platforms (Finding your first clients in Spain as a newcomer): Referrals and former contacts often bring a first client within 1 to 3 months; cold outreach and platforms often take 3 to 6 months

• If one client will give you at least 75% of your income, check the economically dependent (TRADE) rules (Relying on one main client: economically dependent freelancers (TRADE)): Before you sign the contract

• Agree the contract in writing: scope, fees, payment term, intellectual property, termination (What to put in a Spanish freelance contract): Before you start work

• Register a TRADE contract with the public employment service: Within 10 working days of signing

• Ask for a deposit or split the fee into milestones (Deposits and milestone payments to reduce unpaid-work risk): On signing or at the start of work; advances of 30% to 50% are common on projects

• Invoice each milestone separately and set the payment deadline in the contract (How Spanish clients actually pay: terms, approvals and August): On approval of each deliverable

• Expect payment inside the legal term: 30 days, or up to 60 days if agreed (Late payment law: maximum payment terms and interest owed to you): 30 days from delivery, 60 days at most

• Send a friendly reminder (Chasing an unpaid invoice from reminder to formal demand): Within a few days of the due date

• Send a firmer reminder with the invoice and a note on interest: About 7 to 15 days after the first reminder

• Claim interest at the European Central Bank rate plus 8 percentage points, and the fixed 40 euros recovery fee: Interest runs from the day after the due date

• Send a formal demand by burofax or certified email: Gives the client 8 to 10 days to pay

• File a payment order (monitorio) or a court claim: If the demand deadline passes unpaid; the claim must come within 5 years of the due date

Documents you may need

Income and work

• Your signed contract with the client — Deposits and milestone payments to reduce unpaid-work risk, Chasing an unpaid invoice from reminder to formal demand
• Proof that at least 75% of your income comes from that client — Relying on one main client: economically dependent freelancers (TRADE)
• Registration of the contract with the public employment service — Relying on one main client: economically dependent freelancers (TRADE)

The home and the lease

• Written TRADE contract that states you are a TRADE — Relying on one main client: economically dependent freelancers (TRADE)

Payments and receipts

• Burofax with certified text and acknowledgement of receipt — Chasing an unpaid invoice from reminder to formal demand

Other documents

• A written notice that you intend to suspend work — Chasing an unpaid invoice from reminder to formal demand

Clients, contracts and late payment: questions that cross several articles

Do I need a written contract to work as a freelancer in Spain?

No, a written contract is not legally required for most freelance work, but it is much easier to prove than oral terms. The exception is a TRADE contract, which must be in writing. Read "What to put in a Spanish freelance contract" and "Relying on one main client: economically dependent freelancers (TRADE)".

Who owns the work I create for a client?

You own the work as its author until you assign the economic rights in writing. If the contract does not state the term, territory or uses, the assignment is limited, and software needs an express assignment too.

Can a client end my contract early?

Yes, a client can end a contract early, but the contract's own notice and penalty terms come first. For a work contract the client must pay for work done and expenses, and TRADE freelancers are owed damages if there is no just cause.

Why do Spanish clients often pay later than the legal limit?

Many Spanish companies pay later than the legal limit, and average payment periods are around 50 to 60 days, with small firms paying slower than large ones. Set the term in the contract and ask for a deposit. Read "How Spanish clients actually pay: terms, approvals and August" and "Deposits and milestone payments to reduce unpaid-work risk".

What should I put in the contract about payment so I can chase a late invoice?

Put a payment term within the legal limit and a late-interest clause in the contract, so a demand later has a clear basis. Interest is owed automatically anyway. Read "What to put in a Spanish freelance contract", "Late payment law: maximum payment terms and interest owed to you" and "Chasing an unpaid invoice from reminder to formal demand".