Understanding The Pros And Cons of Spain's Digital Nomad Visa

Since its launch earlier this year, Spain's digital nomad visa (DNV) has garnered substantial attention and proven to be a highly sought-after opportunity for those looking to move to Spain.

As part of the country's new Startups Law, the DNV aims to attract fresh talent and investment, providing a pathway for digital nomads to relocate to Spain and embrace the unique blend of work and lifestyle the country offers.

While the visa presents an enticing prospect for remote workers and aspiring expats, it is crucial to carefully consider various factors before embarking on the application process.

Understanding the advantages and disadvantages of the DNV can empower prospective applicants to make informed decisions and navigate the complexities associated with this novel visa program.

In this comprehensive overview, we delve into the pros and cons of Spain's digital nomad visa, shedding light on its benefits and potential challenges, thereby assisting individuals in their evaluation and preparation for this exciting opportunity.

Spain's digital nomad visa has gained significant popularity since its launch earlier this year. However, before applying, there are important factors to consider. Here is an overview of the advantages and disadvantages:

PROS

1. New Opportunity for Non-EU Citizens: The digital nomad visa offers a fresh avenue for non-EU citizens to relocate to Spain. Previously, options were limited to non-Lucrative visas or the Golden Visa (now unavailable), which required substantial property investment. The DNV allows individuals to work remotely while residing in Spain.

2. Flexibility in Applying: Applicants can choose to apply for the visa either from their home country or while already present in Spain. This flexibility enables prospective nomads to explore the country before making a decision.

3. Extended Residency: Successful DNV applicants initially receive a one-year visa, followed by the opportunity to obtain a 3-year residency permit. This permit can be renewed for an additional two years, allowing a maximum residency period of five years.

If applying while in Spain, the initial validity will be for 3 years, extendable for a further 2 years.

4. Pathway to Permanent Residency and Citizenship: The DNV can serve as a stepping stone towards permanent residency and, eventually, Spanish citizenship. After five years of residency, individuals can apply for permanent residency, and after ten years, they become eligible to seek Spanish citizenship.

5. Spouse's Work Authorisation: If a spouse or civil partner is included in the application, they are authorised to work in Spain under the residence permit.

6. Inclusion of Family Members: The visa permits the inclusion of spouses or civil partners, as well as dependent children, on the application. Additional proof of financial capability is required for each family member.

7. Travel within the EU: Once the DNV is obtained, individuals can apply for a residency card, such as the TIE, enabling travel within the EU during their stay in Spain.

8. Tax Incentives: One of the significant advantages of Spain’s digital nomad visa is access to a favourable tax regime under the Special Expat Regime (commonly known as the Beckham Law). Approved digital nomads are taxed as non-residents, paying a flat 24% income tax on Spanish-sourced income up to €600,000. Income above this threshold is taxed at 47%. These reduced rates apply for up to six years—the year of arrival plus the following five—and can result in substantial savings. After this period, individuals switch to the general progressive tax system. To benefit from this regime, applicants must register with Spanish Social Security and apply within six months of starting work in Spain.

CONS

1. Complex Application Process: The DNV application process can be challenging, especially considering it is still in its early stages. Some applicants have reported lengthy response times, translation and apostille requirements for numerous documents, and more extensive proof than initially stated.

2. Potential Lawyer Fees: Due to the complexity and document-intensive nature of the process, many applicants may choose to seek legal assistance, which can be costly. Lawyer fees can range from €1,000 to €3,000 or more.

3. Challenges for Remote Employees: Citizens from certain countries, particularly the US, may face difficulties when applying for the DNV as remote employees. Social security certificate requirements from the country of origin pose a hurdle, as some countries may not issue these certificates for this type of visa.

4. Employer Cooperation for Social Security: Employees from countries without social security agreements with Spain may require their employers to register with the Spanish social security system and contribute on their behalf. Convincing companies to fulfill this requirement for remote work can be challenging.

5. Self-Employment Obligations: Self-employed applicants have a relatively easier process, bypassing some challenges faced by remote workers and employees. However, they must register as "autónomos" (self-employed) in Spain and shoulder their social security payments, which can be expensive.

6. Limitations on Spanish Income: The DNV eligibility criteria restrict earning more than 20% of income from Spain. This means individuals relying on building a client base within Spain may find it impossible to obtain the visa, as they must rely on existing or new clients from abroad.

7. Income and Financial Requirements: Applicants must demonstrate a minimum monthly income of at least €2,762 or €33,144 per year to qualify for Spain’s Digital Nomad Visa. If family members are included, the required income increases: the first accompanying family member adds 75% of the minimum wage (an additional €1,035 per month), and each subsequent family member adds 25% (an extra €346 per month per person). In addition to meeting these financial thresholds, applicants must provide supporting documentation such as employment contracts, bank statements, or proof of ongoing business activities. It’s also important to factor in extra expenses, including social security contributions, taxes, legal fees, and a private health insurance plan that meets visa requirements. All financial documentation must reflect the current income standards to comply with eligibility criteria for the Digital Nomad Visa in Spain.

8. Restrictions on Recent Residents: Individuals who have lived in Spain during the previous five years prior to applying for the DNV may not be eligible for the visa. Similarly, current residents in Spain who wish to switch their status to a DNV may not qualify.

Considering these pros and cons is crucial for individuals contemplating Spain's digital nomad visa. It allows prospective applicants to make well-informed decisions, adequately prepare for the application process, and understand the challenges and benefits associated with the DNV.

To learn more about Spain’s digital nomad visa, please see our article, Becoming A Digital Nomad In Spain: Requirements For The Visa And How to Apply

Applying for Spain’s Digital Nomad Visa?

To be approved, you must show proof of private health insurance with no co-payments — covering hospital, outpatient, and emergency care from day one. Sanitas offers fully compliant policies designed for expats working remotely in Spain.

Sanitas no-co-payment health insurance plans for Digital Nomad Visa applicants