The pandemic has pushed remote work to levels we have never seen in the world of work. From there emerged a figure that until then we barely knew: the digital nomad. Remote work opened up a range of possibilities for workers when it came to choosing where to settle, now untied from office chains. These teleworkers can live anywhere thanks to the Internet, but they have to face many requirements in order to normalize their situation. And well, better near the beach than in a crowded and polluted city, right?
There is no doubt that Spain is a unique tourist destination. The question now is whether teleworking from Spain is feasible. It will be: Spain plans a “digital nomad” visa program to attract foreign telecommuters that includes tax breaks.
a different visa. The government is developing a new digital nomad visa, a work and residence permit that will allow people to work remotely for foreign companies and settle here without needing a regular work visa. Framed in the “Startup Law”, whose draft is awaiting approval by Parliament, these new visas will be offered to people who obtain at least 80% of their income from foreign companies. As it has not yet been approved, details remain to be defined, but it is expected to be valid for one year and renewable up to five in some cases.
For whom? Although the visa for international teleworkers is open to all nationalities, there are certain requirements to be able to apply for it: proof that they carry out a work or professional activity remotely for companies based outside of Spain; be a highly qualified professional (university graduate or postgraduate, with vocational training and/or certificates); Have a minimum of 3 years professional experience.
In addition, they must have an employment contract or, if they are self-employed, demonstrate that they have been regularly employed by a company outside of Spain. Also prove that they will earn enough to be self-sufficient and that they have an address in Spain. And it is also indicated that applicants must demonstrate that there is a real and continuous work activity for at least one year. It is not yet clear if they will have to undergo a criminal background check.
Fiscal benefits. As we have previously commented in this Xataka article, one of the strengths of the visa lies in a specific tax regime for these people to submit to the non-resident income tax (IRNR). This is a rate levied on the income received in Spain by individuals and entities not resident in our country. That is, they must not remain on Spanish soil for more than 183 days a year. Currently, its tax rate for people with annual income of up to €600,000 is 24%, but with the law, it will be reduced to 15% over a period of 4 years.
In the cases of digital nomads who earn more than €600,000 gross per year, the tax will remain at 47%. To pay taxes in this way, the requirements will be lowered, going from 10 to 5 years the maximum period to have been a tax resident for the last time in our country. The period of enjoyment will also be extended, from 5 years to 10.
The tendency. In Europe, several countries have similar laws, dating even before the pandemic, as is the case in Estonia. It was a way to promote the sector of startups and digital entrepreneurs. Those who, because they could work remotely, chose their place of physical residence where bureaucracy was minimal and tax benefits were the best. At Magnet we have talked about the pioneering visas established by Estonia and Croatia for digital nomads.
In the first, the digital nomad must pay for their own health insurance but does not contribute or pay taxes (IRPF). Of course, applicants must earn at least € 3,500 per month. In Croatia, €2,300 per month. In other countries things change: in Iceland €7,100 and in Portugal only €700. It is thought that Spain will set a minimum monthly income of around €2,000. Greece introduced a digital nomad law in 2021, offering residence for one to three years with a monthly rent of €3,500. Some countries require you to have cash in the bank (€5,500 in the case of the Czech Republic), in addition to income.
Why Spain? For us, the objective is none other than to attract and retain talent. And in this way, to be able to compete internationally with other countries. For them, factors such as the cheap cost of living, the sun and beach climate, low crime rates and even the speed of broadband (it is among the fastest in Europe, with 148 Mbps, almost double the that of the United Kingdom of 75 Mbps) are determining factors in choosing to settle in our country.
However, things are not rosy for residents of cities like Madrid and Barcelona, as a clear negative effect is that nomads raise rents: people who work remotely for American or British companies, for For example, they have much higher salaries than the locals and can afford what others cannot.
Image: Unsplash