In November last year, the Spanish Parliament approved the new digital nomad visa with the aim of attracting international talent to Spain and its islands.
Expected to come into force at some point in early 2023, the digital nomad visa will open the door to thousands of freelancers who wish to move to Spain and who might otherwise struggle to obtain one of the other residency visas currently available.
But why would a freelancer want to move to Spain in the first place and what are the incentives for doing so?
Below we cover what we believe to be the main benefits of moving to Spain as a freelancer and why the digital nomad visa is set to be a huge hit for foreign workers in 2023.
One of the main benefits of the new digital nomad visa is that freelancers will be entitled to pay a reduced amount of income tax.
Under the new scheme, foreign freelancers will pay Non-Residents Tax (IRNR) instead of the usual income tax known as IRPF.
As long as the freelancer spends more than 183 days per year in the country, they will be eligible for the reduced rate which will be dropped from 25% to 15%.
Furthermore, the reduced rate will be available for up to four years!
The only stipulation is that they earn less than 600,000 euros per year and that no more than 20% of their income is generated from companies based in Spain and its territories.
Although the minimum income requirements have yet to be announced, it is believed that the applicant will need to prove that they have an income of around 2,000 euros per month which is similar to the current minimum required to obtain a residency visa.
Residency rights for family members
Another great benefit of the new digital nomad visa is that the holder's partner and children will also be granted residency rights under the scheme.
Furthermore, the digital nomad visa can be renewed each year for up to five years at which time the holder and their family members can apply for permanent residency in Spain.
Lowest inflation rate of any EU country
We all know that the cost of living has been soaring in recent months due to the higher energy costs, however, in November 2022, Spain was in the enviable position of having the lowest rate of inflation in the whole of the Eurozone at around 6.8%.
This is far lower than other countries including Italy (12.6%), Germany (11.3%), and Portugal (10.2%).
Although the rate touched a high of 10.8% in July of 2022, by the end of the year it had fallen considerably due to a range of economic measures announced by the government which has seen the cost of fuel and food fall significantly.
Other financial aid packages were also brought in including a ceiling of 2% on the amount that rent can be increased by, a 200 euro food cheque for struggling families, financial assistance for mortgage holders, and the state pension increased by around 8.5%.
VAT scrapped for key food items
Although the cost of food in Spain increased by more than 15% year-on-year in November 2022, the government has been making huge efforts to bring this down.
In a move to help cut the cost of living for citizens, the government recently announced that it would be scrapping the VAT on essential food items in 2023 such as bread, milk, eggs, cheese, cereals, fruits and vegetables, and more.
The country’s Prime Minister Pedro Sanchez announced at the end of the year that the usual rate of 4% would be cut to zero percent for at least six months helping to reduce the average cost of the shopping basket.
Other essential items will also have the rate of VAT cut from 10% to 5% including pasta and cooking oil.
Free bus and train travel in 2023
Due to the current cost of living crisis, the Spanish government has been making it cheaper for citizens to get out and about with a number of financial incentives introduced for travel on buses and trains.
For example, until the end of 2023, medium-distance train journeys will be free on trains operated by state-owned network Renfe, including Cercanias, Media Distancia, for local and medium-distance journeys and Rodalies in Catalonia.
But it’s not only trains, long distance bus journeys will also be free for the whole of 2023 following a recent government announcement.
The above are just a few of the great reasons why freelancers may want to consider moving to Spain in 2023.
The state concession network of buses operates on many long-distance routes including Madrid to Segovia, Guadalajara to Madrid, Teruel to Barcelona, Gijón to León, Zaragoza to Castellón de la Plana, Jaén to Madrid, Irún to Tui and Logroño to Soria.
Spanish city rated as best in the world by expats
Described by expats as livable, friendly, and affordable, Valencia was rated in 1st position in the ‘quality of life’ category.
But Valencia wasn’t the only city that fared well in the survey. The capital Madrid finished in 5th place with the Catalan capital of Barcelona coming in 11th.
So there you have it, just a handful of great reasons to consider moving to Spain as a freelancer in 2023.
September 22, 2023
September 12, 2023