Madrid, Spain – A remarkable development is shaping the Spanish labor market: nine out of ten new self-employed individuals in Spain are foreigners. This phenomenon sheds light on the dynamics of entrepreneurship in the country and the diverse motivations behind self-employment.
Florin, a 44-year-old Romanian, exemplifies this trend. Every morning at eight o’clock, he opens the doors of his bar, Sirio 28, in Madrid’s Estrella district. What began in 2019 as a freelance project was the realization of a dream he had harbored since arriving in Spain in 2014. “In my country, I was a waiter for many years, as an employee, and also in Spain, but we had always thought about having our own bar,” Florin explains. This, he says, was one of the main reasons he came to Spain.
Foreign Self-Employed: A Growing Force in RETA
Florin is one of over 481,000 foreigners affiliated with the Special Regime for Self-Employed Workers (RETA). According to social security data, they account for 14% of the total 3.4 million self-employed individuals in Spain. Although still a minority, the group of foreign self-employed is growing rapidly. In the last year, it increased by more than 33,000 workers, significantly contributing to Spain breaking a historical record for affiliated self-employed individuals in May 2025.
In contrast, the number of new national self-employed individuals is low: only 4,200 Spaniards registered as self-employed last year. While Spaniards still constitute the majority of self-employed individuals in RETA (2.9 million of the total), their decline, as opposed to the increase in foreign registrations, is a continuing trend. Between 2021 and 2025, foreign registrations in RETA accounted for 96.5% of the total during that period, according to social security data compiled by the Association of Self-Employed Workers (ATA). This means that over the last four years, 104,338 foreigners registered, while only 3,817 nationals did. This trend clearly indicates that 9 out of 10 new self-employed individuals are foreigners.
Why the Boom in Foreign and Decline in National Self-Employment?
Celia Ferrero, Vice President of the Association of Self-Employed Workers (ATA), identifies two main reasons for this development: the massive influx of foreign entrepreneurs and a lack of generational change among national self-employed individuals. “On the foreign side, there is this feeling, an entrepreneurial culture that is much more deeply rooted than ours,” Ferrero explains. Many immigrants, she adds, were already entrepreneurs in their home countries and are more inclined to work independently than to be employed.
María José Landaburu, Secretary General of the Union of Associations of Self-Employed Workers (UATAE), adds that for many immigrants, self-employment is often the “only real possibility for labor integration given the obstacles to accessing employment as an employee.” She emphasizes: “It is a sign of effort, resilience, and contribution to the economy, but it also points to a structural deficit: if national entrepreneurship does not grow at the same pace, it is because there are significant obstacles, from a lack of social protection to economic insecurity.”
The ATA points out that national self-employed individuals naturally leave the sector, for example, through retirement, without enough new people joining. “There is a clear aging of the business world and national self-employed individuals, and there are problems of generational change; we see a brake on young entrepreneurship,” says Ferrero. She highlights that national workers are more risk-averse, and considering the difficulties of self-employment, this does not balance the imbalance.
Contribution and Challenges: False Self-Employment and Adaptability
The contribution of foreign self-employed individuals is crucial to offset losses in many autonomous communities, according to Landaburu. “The Spanish economy is largely sustained thanks to the entrepreneurial efforts of thousands of migrants, and it is important to recognize this role.” However, UATAE warns of a “worrying” phenomenon influencing the figures: false self-employment. Often, people who register as self-employed do so not out of an entrepreneurial calling but are forced by companies outsourcing their tasks to cut costs. This fraud, they explain, “hides a common employment relationship under the guise of self-employment and artificially inflates foreign affiliation statistics.” Therefore, they deem it “urgent” to expand inspections, regulations, and guarantees to protect vulnerable workers.
Florin, who manages his bar and also works in it when needed, is aware of the challenges. “I have to take care of everything and try to worry, manage, and be there if necessary.” Although self-employment is difficult, he emphasizes that it is “something everyone does in their own way and depends on the benefits they can get from it.”
The hospitality and construction sectors are traditionally areas with many RETA members. Iván, a 44-year-old Ukrainian freelancer, knows both well. Since arriving in Spain in 2004, he worked freelance in construction until the crisis forced him to adapt and open a bar with his wife. In 2014, he returned to construction. “It has always gone well for me because I could adapt to what I had to do,” Iván explains. He agrees with Florin that self-employment is worthwhile if one is well-organized and has savings. “And to have a mattress, money in case something happens, you have to have that,” he admits. However, bureaucracy is often complex: “It’s very tight with taxes, with laws… They are good because safety comes first, but I think there are things that are superfluous.”
Language and culture are reasons why nationals from Latin American countries constitute the second-largest group (after Chinese citizens and before Europeans themselves) of foreign self-employed individuals. Yolanda Sandona, owner of the Latin American products shop La Huerta in Arganzuela, came from Ecuador years ago. The idea of starting a business came spontaneously. The business, which has been autonomous for years, is her second project in Spain. “Although it’s many hours, we feel it’s ours, and we are happy to already have a portfolio of customers from Mexico, Colombia, Bolivia, Ecuador… who find products from their countries here that are not available everywhere.”
New Forms of Self-Employment and the Future of Entrepreneurship
In addition to traditional sectors, new types of self-employed individuals have contributed to the growth of RETA affiliations in recent years, especially among foreigners. Landaburu explains: “New forms of self-employment associated with digitalization, creative services, remote work, and so-called digital nomads are strongly on the rise.” A young, well-educated, and internationally oriented profile that advocates for flexible and remote work is also consolidating. Therefore, she advocates for “adapting regulations and social protection to this new reality.”
In its report, the ATA also highlights the freelance, scientific, and technical activities sector as the second fastest-growing sector among foreign self-employed individuals. “We see how foreign investments in general are increasing and how many people, especially since the pandemic, come to Spain to work as digital nomads, who are also self-employed.”
However, the associations emphasize that the historical balance of affiliations must not overshadow the decline in national self-employed individuals. Ferrero calls this “a system failure” and advocates for a dual strategy: “facilitating foreign entrepreneurship to continue attracting talent from abroad” and “promoting the culture of entrepreneurship among domestic workers.” The goal is to find measures that bring fresh blood into businesses and produce young entrepreneurs who vitalize the economy.
UATAE emphasizes that much remains to be done to make self-employment dignified. It must cease to be a “refuge job” for people forced to leave the labor market and become “a choice with rights, stability, and future.” To this end, they demand legislative changes, the consolidation of the new contribution system based on real income, better social protection, and addressing the “high costs of renting premises” to “make self-employment a viable option” and, above all, to protect “the most vulnerable.”
