Startup act: the new reality of remote work
The recent Startup Act represents Spain’s definitive adaptation to the new reality of remote work, which has become increasingly prevalent in the business ecosystem, especially since the pandemic. This law introduces some modifications to the 2013 Entrepreneurs Law, which was the first step in attracting foreign capital and talent and also launched the Golden Visa program for capital investors, among other measures.
In this scenario, Spain gains particular importance as a country where the perfect formula for foreign workers comes together in one place: good weather and a style and quality of life that are virtually unparalleled.
We invite you to continue reading this article, where we will explain what the nomad visa entails, its requirements, and the primary tax benefits that make it the focal point of attention for remote workers and digital nomads from around the world.
What is the digital nomad visa?
According to the Startup Act, it is defined as a residency permit for third-country nationals, i.e., those from outside the European Union, authorizing them to stay in Spain to engage in remote work for companies located outside the national territory, using exclusively computer, telematic, and telecommunications means and systems.
It is a residency permit processed through an express procedure, with a resolution time of 20 days, similar to the Golden Visa application. It can also include the spouse or partner in a similar relationship, as well as financially dependent children and dependent ascendants. Therefore, it is applicable not only to remote workers but also to their families.
Who can apply for the nomad visa
The first aspect to highlight is that the law distinguishes between employment activity (work as an employee for a company or on someone else’s behalf) and professional activity (work as a self-employed or independent professional). It establishes specific guidelines for each type of activity:
- In the case of employment activity, the holder of the international teleworking authorisation can only work for companies located outside the national territory.
- In the case of professional activity, the holder of the international teleworking authorisation may work for a company located in Spain, provided that the percentage of such work does not exceed 20% of their total professional activity.
Therefore, this residency permit for remote workers applies to both employees and self-employed professionals. However, you can only apply for the visa or digital nomad authorisation if you can demonstrate that you are a graduate or postgraduate from reputable universities or business schools, have vocational training, or have a minimum of three years of professional experience.
Specific and general requirements
To apply for the digital nomad visa in Spain, you must meet specific requirements, which are described below:
- The company you work for must have been operating for at least one year with real and continuous activity.
- Documentation proving that the work can be performed remotely.
- The company must not be located in Spain.
- For labor or employee activity, you must prove your employment relationship with the company for at least the three months before the application and provide documentation demonstrating that the company allows remote work.
- For professional or self-employed activity, you must demonstrate that you have a commercial relationship with one or more companies for at least the last three months, as well as the terms and conditions under which you will work remotely.
Among these specific requirements, one deserves special mention: it is essential to understand that you must comply with social security obligations in Spain. There are two scenarios to consider:
- If you work as an employee for a foreign company, that company will need to open a contribution account and register you as a worker in Spain unless there is a social security agreement between the country where the company is located and Spain.
- If you are a self-employed worker, you will need to register in the Special Regime for Self-Employed Workers (RETA) in Spain once you obtain the residence authorization and pay the corresponding monthly contributions.
In addition to these specific requirements, you must meet the general requirements established by the Entrepreneurship Law in Article 62, namely:
- Not being irregularly in Spanish territory at the time of the application.
- Being of legal age.
- Having no criminal record in Spain or in the countries where you have resided during the last two years.
- Having private health insurance with an entity authorized to operate in Spain, with full coverage.
- Having sufficient economic resources for yourself and your family during the residency period. In this regard, the amount to be proven by the main applicant would be 200% of the minimum wage (31,752 euros/year) and at least 75% of the minimum wage for the first dependent family member and 25% of the minimum wage for each additional member.
- Finally, you will need to fill out the application form and pay the fee.
Visa VS. Residency
The application for the digital nomad visa can be made either in your home country or in Spain:
- At the Spanish consulate in your home country, you can obtain a one-year visa, which can be converted to a three-year residence permit upon your arrival in Spain.
- Directly in Spain if you are legally and effectively in the country at the time of the application (with a tourist visa). In this case, you will directly receive a three-year residence permit, renewable for two-year periods if the conditions that granted the right remain unchanged.
It is important to note that the residency permit for digital nomads in Spain counts toward obtaining permanent residency (which can be applied for after five years) and for applying for Spanish nationality, provided you meet the deadlines and requirements established by the law for nationality applications based on residency.
Taxation of Digital nomads
Finally, you should know that one of the most interesting aspects of the digital nomad visa is its taxation. If you are an employee (for example, worker of a multinational who works remotely in Spain) and have not been a resident in Spain during the five years before the application, you can benefit from a special regime that allows you to tax your work income at a flat rate of 24% up to 600,000 euros, avoiding the progressive general tax regime, which can go up to 47%.
However, please note that this regime does not apply to self-employed individuals, and you must apply for it to the tax agency within six months of obtaining the residency authorisation. It is valid for five years, after which you will transition to the general tax regime.
Still haven't applied for your digital nomad visa in Spain?
Contact us, and we will guide you through the entire process. Discover Spanish culture and advance your professional career while surrounded by spectacular landscapes, rich gastronomy, and a Mediterranean and healthy lifestyle for you and your family.
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