After January 2023, the new startup law should allow digital nomads to obtain a visa to work in Spain and benefit from reduced rates of income tax.
The short answer to that question is, yes, you can be a digital nomad in Spain but you should wait until after January 2023 when the Ley de Startup legislation should apply.
The Ley de Startup, or Startup Laws, are a whole raft of legislation that aims to attract international investors, digital nomads and new companies to Spain with visa incentives, tax breaks, fewer bureaucratic hoops and other benefits.
The legislation was first proposed back in 2019 and has since been amended 217 times whilst passing through the Committee on Economic Affairs and Digital Transformation, the Spanish Cabinet and the Spanish Parliament. The Law now needs ratifying by the Senate to allow it to come into force in January 2023. The bill is supported by most of the political parties so is very likely to be passed.
The law defines a digital nomad as “people whose jobs allow them to work remotely and change residence regularly”.
Spain is keen to encourage digital nomads, and not just for the tax those nomads will pay, nor the skills they will bring to the country. A major factor making the Startup Act acceptable to all the major political parties in Spain is the prospect of re-populating what is known as España Vaciada – or Emptied Spain, those villages that have seen their population move on over the years. There are dozens of villages in Spain in terminal decline.
Most similar digital nomad visas in other countries require a digital nomad to have a minimum monthly income. As yet, (20th November 2022), Spain has not revealed a minimum income figure for the new digital nomad visa.
The new Spanish digital nomad visa is expected to last for 1 year after approval. Additionally, under the current proposals, residents holding the visa will be able to renew it for a further 2 years if they continue to the meet the necessary requirements, extendable to 5 years.
The new Spanish visa for remote workers has been created for foreign employees from Non-European Economic Area (EEA) countries. People with EU passports or arriving from Schengen countries can already work remotely in the country for up to 6 months of the year without needing to register officially.
For those arriving from non-EU countries the new digital nomad visa will allow applicants to apply who are either:
• Employed by non-Spanish companies
• Have an income with less than 20% earned from Spanish companies
• The new visa will also ease the process of applying for residency on arrival. As it stands, it is necessary to register for a permit with local municipalities within 30 days of settling in Spain.
The digital nomad visa will be a perfect option for people working remotely as freelancers or entrepreneurs with multiple clients. It will also benefit people employed full time with foreign companies, with the ability to work from home or abroad.
The proposal is that holders of the Digital Nomad Visa will pay a Spanish non-resident tax rate (IRNR) of 15 per cent for the first four years. They will have to demonstrate that at least 80 percent of their income comes from foreign companies for this IRNR tax to apply.
When it is available, applications for the Digital Nomad Visa will be made in the same way as existing visas, at Spanish Embassies and Consulates in countries outside the EU.
Around 34 towns and villages across Spain have decided to join the Red Nacional de Pueblos Acogedores para el Teletrabajo (or National Network of Welcoming Villages for Remote workers) to encourage digital nomads to visit. They all have under 5,000 residents and want to attract new residents to repopulate their streets.
In Andalucia, Genalguacil, Benarraba and Tolox, all in Malaga province and Santa Ana La Real in Huelva province are members of the Red Nacional de Pueblos Acogedores para el Teletrabajo.
Those municipalities all offer incentives to digital nomads including 4G connectivity, free WIFI areas, teleworking centres and in some cases, subsidised living and workspaces, all measures that help reduce the cost of living for the digital nomad to an estimated 131 Euros per week per person (in Genalguacil).
Instead of having to find their own way, the programme provides remote workers with a host who can welcome them to the town or village and connect them with community life.