Spain plans to launch a digital nomad visa program that’ll give millions of non-EU citizens the chance to work in the sun and enjoy a lower cost of living with tax breaks thrown in for good measure.
The visas will be offered to people who work remotely for enterprises outside Spain and who derive a maximum of 20 percent of their income from Spanish firms.
As the law has yet to be passed, some details still need to be hammered out. Still, it is expected that the visa – essentially a residency permit – will be initially valid for one year and renewable for up to five years, depending on the applicant’s circumstances. Close relatives, such as spouses or children, will be eligible to join the applicant.
Applicants must be from outside the European Economic Area and be able to demonstrate that they have been working remotely for at least a year.
They must also have a contract of employment. However, if freelance, one must show that a company outside Spain regularly employs them.
Spain’s digital nomad visa
They must also demonstrate that they will earn enough to be self-sufficient and that they have an address in Spain. It is unclear whether they will have to undergo a criminal record check.
The digital nomads will be taxed at 15 percent for the first four years rather than the standard 25 percent base rate.
Spain joins 15 other European countries offering a digital nomad visa version. Each country has its own set of conditions.
In Croatia, for example, applicants must be earning at least €2,300 a month, in Estonia €3,500, Iceland €7,100, and Portugal only €700. It’s thought that Spain will set a minimum monthly income of about €2,000.
Greece introduced a digital nomad law in October 2021, offering residency of one to three years. Applicants must have a monthly income of €3,500.
Other digital nomad destinations
Some countries demand that you have cash in the bank – €5,500 in the case of the Czech Republic – and income. Some may also insist on private health insurance.
Madrid, Valencia, and Barcelona are already popular among the EU’s digital nomads. The latter is a favored destination for startups as the city aspires to become a technology hub less dependent on tourism.
“It’s easy to attract talent. Barcelona is small and densely populated and it’s cosmopolitan,” says Sacha Michaud, who co-founded the Glovo food delivery business in the city.
Staff at Glovo are international, so, in common with other startups in the city, the company’s lingua franca is English.
The Start Up in Spain law aims to smooth entrepreneurs’ paths through the notorious Spanish bureaucracy. At present, it takes an average of 20 to 30 days to set up a company in Spain, compared with one day in the Netherlands or the UK.
Spain was ranked 30th in the World Bank’s ease of doing business report in 2020.
Excellent 4G cover almost everywhere in Spain is tempting some nomads to set themselves up in rural areas where rents are very low. Internet speed is among the fastest in Europe and, at 148Mbps, almost double the UK speed of 75Mbps.
However, for residents of cities such as Madrid and Barcelona, one negative effect is that nomads push up rents as people working remotely for US or UK companies can command much higher salaries and pay higher rents than locals. According to a report published this year, the average monthly salary in Spain is €1,751, 20 percent less than the EU average of €2,194.