The Spanish Parliament has approved the special digital nomad visa, officially known as the international remote worker visa (Visado para Teletrabajadores de Carácter Internacional).
Although not yet in force, it has been given the green light by the Committee on Economic Affairs and Digital Transformation, the Spanish Cabinet, and the Spanish Parliament. It now only needs to be endorsed by the Spanish Senate before being published in Spain’s State Bulletin and therefore being in effect.
The new law for start-ups and digital nomads (Ley de Startups) is expected to come into force in January 2023 and will give non-EU freelancers and remote workers entry and residency rights in Spain, with less bureaucratic hurdles than are currently in place, as well as enticing tax benefits.
The legislation describes digital nomads as “people whose jobs allow them to work remotely and change residence regularly”.
This visa is especially promising for non-EU nomads from countries like the UK, Australia, and the US, who haven’t found it easy to get a residency permit to live and work in Spain.
The best option that has been available to them has been the self-employment visa which requires a business plan, proof of funds and guaranteed earnings, and more.
Remote workers who have a contract with an overseas company will also be allowed to apply for the visa.
The Spanish government wants to make “Spain a paradise for talent”, by removing the current bureaucratic restrictions these international workers face.
The new visa will initially be for a period of one year, but will then be available to renew for up to five years. At this point, it will then be possible to apply for a permanent residency.
When applying for the visa, applicants are required to earn at least 80 percent of their income from foreign companies and they must not have lived (been fiscal residents) in Spain for the previous five years.
International companies will be able to request a residency permit for a staff member through the digital nomad visa for non-EU remote workers, however, they will have to be deemed highly qualified with either graduate and/or postgraduate studies or three years of relevant experience.
Although specifics have not yet been released, residency rights will also be given to the applicant's partner and children.
Up until now, it is believed that Spain’s tax regime has put off many international workers from working in the country but the fiscal benefits that will be available with the new start-up law address this.
In fact with the new visa, they will pay less income tax than contract workers and those who are self-employed who already live and work in the country.
New digital nomads will be entitled to pay ‘Non-Residents Tax (IRNR)’ rather than the regular ‘Income tax (IRPF)’ that Spain’s resident workers pay.
Previously only ‘Non-Resident Tax’ was applicable to non-residents (such as second-home owners), an exception has now been made for digital nomad visa holders even if they spend more than 183 days a year in Spain and are therefore technically classed as fiscal residents.
In addition to that, digital nomads and remote workers will have the IRNR, which is generally 25 percent in Spain, reduced to 15 percent. This is as long as they earn below 600,000 euros per annum and they can prove that less than 20 percent of their income comes from companies based in Spain.
This tax rate will be available to them for four years.
There is still some clarification needed on some issues, for example, it is not yet clear if applicants need to meet the minimum income requirements, although this has been reported to be around 2,000 euros per month.
Clarity is also needed, as to what access digital nomad visa holders will have to healthcare in Spain.
The Spanish government has not yet mentioned whether they will need to pay social security fees in order to access public healthcare or will need to pay for private healthcare, as is required for non-lucrative visa applicants.
The law was passed by 177 members, with 88 votes against and 75 abstentions. It is expected to be approved without much discussion in the Senate during the coming weeks.
Economic Affairs Minister Nadia Calvino said “It’s one of the most enjoyable moments I’ve experienced in the Parliament. It’s a law that will allow Spain to be at the forefront in the push and promotion of talent in this rapidly growing digital economy.”