The new startup law: can I live in Spain with the new digital nomad visa?

On December 22, 2022, the new Startup Law came into force, a regulation that will allow many foreigners to live and work in Spain both as employees and as self-employed.

The Law regulates “digital nomads”, authorising them to remain in Spain to carry out remote work or professional activities for companies located outside the national territory, in their capacity as international teleworkers.

Why Spain?

Spain is the perfect destination for those who seek a good work/life balance. It is a country with an attractive climate, historical and cultural wealth, magnificent gastronomy, high safety rates, good educational quality and a free public health system.

In addition, Spain offers incredible landscapes, relatively low prices and residing here will open the door for you to learn one of the most important languages in the world, Spanish.

The country also has a good high-speed Internet connection network throughout practically the entire country, which makes it convenient to work from home.

Requirements to obtain the residence permit

The law requires that you be an employee of a foreign company that allows you to work remotely, or that you be self-employed and work with different companies throughout the world and your income derives from online activities from outside of Spain.

In addition, you must meet the following requirements:

- Proof of being a graduate or postgraduate from a prestigious university, professional training or recognised business schools, or prove you have at least three years of professional experience in the field.

-Demonstrate that during the past three months immediately prior to the application, you have been working for your company (as an employee) or have had a relationship as an independent professional for your clients (other companies). In both cases, it is also necessary that the employing company or the client have had a real and continuous activity for at least one year. In addition, if you are an employee, the company must authorize you in writing to telework.

- Although the company you work for or your clients must be from outside of Spain, there is an exception where you can work simultaneously for a company located in Spain, but need to ensure that it does not exceed 20% of your total professional activity.

- Have no criminal record and not be prohibited from entering Spain.

- Have a private medical insurance, without copayments or waiting periods and with coverage throughout the country.

- Demonstrate a minimum level of income. The set amount has not yet been revealed (coming March 31, 2023).

What are my rights as a digital nomad in Spain?

Firstly, you will be able to live anywhere in Spain and bring your spouse and minor children with you.

In addition, one of the most important benefits is that as long as your permit is valid you will have the right to travel throughout the Schengen Area of the European Union.

You will also benefit from important tax advantages, as explained below.

Main technical advantages of the new procedure

The digital nomad visa brings important advantages in terms of the approval procedure for its beneficiaries.

One of which is the ability to start the application directly from Spain. In other words, you can enter Spain as a tourist and apply for your residence permit from here without having to return to your country beforehand.

Another advantage is the resolution period for your application. The administration must reply within 20 business days, in comparison to many other residency authorizations where the resolution period can take three months (and often longer). In addition, in the event that the Administration does not respond within said period, the administrative silence is considered to be positive.

Lastly, the time spent in Spain with this residence authorisation as an international teleworker will be taken into account towards applying for permanent residency and Spanish nationality.

How long is the residency authorisation valid?

This depends on how you apply: for a visa or for the authorization directly.

The visa application will be granted to those who apply in their home country and who live abroad at the time of their residence application, while the authorization will be granted to those who are already in Spain.

For the visa, it is valid for one year, but once the visa has expired, you can request a residence permit as you will already be living in Spain, which is valid for three years.

For the authorisation for those who are already in Spain, It is valid for three years and renewable for periods of two years at a time.

As a general rule, once you have been here for five consecutive years, you can apply for your permanent residency and once you have been here for ten consecutive years, you can apply for  your Spanish nationality (there are certain exceptions for citizens of certain countries who can apply earlier).

Tax advantages

Digital nomads who are granted their residency authorisation under the new Startup Law are subject to an attractive tax regime that will allow them to save on taxes.

The special Beckham Law tax regime will apply. This means that, despite residing in Spain, you will be able to pay taxes under the IRNR as a non-resident instead of IRPF personal income tax.

There are specific criteria however that must be met in order to be eligible for these tax advantages. One of which is not having resided in Spain in the past five years. Another, is you must apply within the first six months of your arrival in Spain. If you meet these requirements, you will benefit from a fixed tax rate of 24% for the first 600,000€ you make per year.

In addition, you will not have to pay wealth tax nor will you have the obligation to declare your assets abroad (modelo 720).

You will be able to benefit from this special regime for five years, as long as you continue to reside in Spain as an international teleworker. After that time frame, you will be taxed under the general regime.

Nieto Jones: legal office for digital nomads

At Nieto Jones we are experts with extensive experience in immigration law. Contact us by phone 610632963 or email contact@nietojones.com and we will be happy to review your case, offer you the best advice and help you obtain your residence permit in Spain.