A U.S. expat residing in Spain who owns or participates in a U.S. LLC—whether it’s a sole proprietorship, partnership, or S-Corp—may be required to register as an autónomo (self-employed) in Spain due to several legal and tax reasons.

Worldwide Taxation Principle
Spain taxes its residents on their global income, regardless of where the income is generated. If you’re a tax resident in Spain (typically by spending more than 183 days per year in the country), you must declare all income, including that from a U.S. LLC.

Substance Over Form Doctrine
If the substance of your activity shows that you’re effectively running the business from Spain, Spanish tax authorities may treat the income as Spanish-source or as income earned through self-employment, regardless of the LLC’s legal form in the U.S.

Spanish tax authorities assess where the effective management of the LLC occurs. If the business decisions and operations are managed from Spain, the LLC is considered to be effectively operated from Spain, making its income taxable there.

Spanish Classification of U.S. LLCs

Spain often treats U.S. LLCs as transparent entities (similar to partnerships), meaning the income is attributed directly to the individual owner. This is especially true if the LLC has no real presence (e.g., office, staff) in the U.S. Under Spanish law, income from such entities is taxed under the IRPF (Impuesto sobre la Renta de las Personas Físicas), and must be reported as personal income as Attribution of Income (Régimen de Atribución de Rentas). This can result in high tax rates (up to 50%).

Spain generally treats U.S. LLCs as fiscally transparent (pass-through) entities, similar to Spanish partnerships or economic interest groups. This means that the income is directly attributed to the individual owner(s), not the entity itself (Income Attribution); Spanish tax residents must report the LLC’s income on their personal income tax return (IRPF), even if the income is not distributed; this income is taxed at progressive personal rates, which can exceed 50% and if the LLC is used to carry out business activity from Spain, the owner is considered to be self-employed and must register as autónomo. [US Tax Consultants]

Spain uses three criteria to classify a foreign entity as transparent when the entity is not a taxpayer in its country of incorporation, when income is attributed to the members under the laws of that country and when the income retains its original nature when attributed to the members.

In contrast, a U.S. C-Corp is treated as a corporate taxpayer in the U.S., and Spain recognizes it as a distinct legal entity. This has several tax implications, that the C-Corp pays U.S. corporate tax on its profits, also Spanish residents who receive dividends from a C-Corp must declare them as investment income, taxed under the savings tax regime (19%–28%). [US Tax Consultants], and as passive ownership of a C-Corp it is not require the registration as autónomo in Spain. Taxpayer must remember that ownership must still be declared if the value exceeds €50,000.

Feature	U.S. LLC	U.S. C-Corp
Spanish Tax Treatment	Transparent (pass-through)	Separate legal entity
Taxation	Personal IRPF (up to 50%)	Dividend income (19–28%)
Autónomo Required?	Yes, if business activity is conducted	No, if passive investor
Tax return	IRPF. Direct to owner as income attribution	IS. Retained by corporation
Reporting	Modelo 720 if > €50,000	Same

Why you need to be registered as Autónomo?

Because of the Legal Compliance for Business Activity, if you’re actively earning income through services or business activities—even remotely via your U.S. LLC—you are considered to be conducting economic activity in Spain. Spanish law requires individuals conducting such activity to register as autónomo.

Autónomos must contribute to the Spanish social security system, which is mandatory if you’re working independently. This also grants access to healthcare and pension benefits.

Operating without registering as autónomo while earning income can lead to penalties, audits, and back taxes. Spain has increased scrutiny on foreign business owners and undeclared income.

Then, any resident in Spain is required to file: Modelo 100, annual income tax return, Modelo 720, Reporting of foreign assets over €50,000 and the Modelo 714, Wealth tax return (if applicable).

So…

Even if your income is technically earned through a U.S. LLC, if you’re residing in Spain and managing that business from Spain, you’re likely required to: declare the income in Spain, pay Spanish taxes on it and register as autónomo to comply with local laws. If you have any questions, please contact us at US Tax Consultants