Digital Nomads in Spain and Portugal

Oct 27, 2022 | AEAT, AT Autoridade Tributária e aduaneira, Portugal, Spain | 1 comment

SPAIN: Do you want to move to Spain as Digital Nomad? VISA and Tax implications?

 The Spanish Government has already approved the draft Law on Startups to attract investment, talent, and innovative entrepreneurship. The bill has two different components: the residence that let you live in the country and its tax implications.

Can be Spain an option for Digital Nomads?

According to the InterNations annual Expat Insider survey on expat destinations around the world, Spain was listed the fifth in the overall ranking, and it was voted top expat destination for quality of life.

Those surveyed said they loved the variety of culinary and dining options on offer, the opportunities for sports and the culture and nightlife. Spain also ranked high for climate and weather, beaten only by Portugal.

The affordability of its healthcare system is a highlight for expats – almost four out of five rated it positively. Of those surveyed, 77 per cent said that they can access all the kinds of healthcare services they need. 70 per cent of those surveyed are happy with the cost of living, compared to 45 per cent globally.

Residence and VISA.

A new digital nomad visa could let you stay up to 5 years. Spain’s plans for a digital nomad visa could make it easier and cheaper for remote workers to live in the country, reducing and even eliminating bureaucratic obstacles and makes procedures more flexible to encourage the creation and investment in technology-based emerging companies (startups) and, to favor the establishment of teleworkers and “digital nomads” and their families, in Spain.

According to Economic Affairs Spanish Minister Nadia Calviño past September, with this Act the country was hoping to “attract and retain international and national talents by helping remote workers and digital nomads set up in Spain,”.

It is expected that the VISA could be introduced as soon as January next year 2023.

Would you be able to apply for Spain’s Digital Nomad VISA?

Though details are still being finalized, it’s thought that the scheme will be open to people who work remotely for non-Spanish companies. Anyone looking to apply for a digital nomad visa will only be able to get a maximum of 20 per cent of their income from Spanish entities.

Applicants will need to be from outside of the European Economic Area. They will also need to be able to demonstrate that they have been working remotely for at least a year and have a contract of employment or, if freelancing, have been regularly employed by a company outside of Spain.

Anyone wanting to take advantage of the digital nomad scheme will have to prove that they earn enough money to be self-sufficient – likely to be around €2,000 a month – and will need an address inside of the country.

How long will digital nomads be allowed to stay in Spain?

Official sources have indicated that digital nomad visas in Spain will originally be valid for 12 months. After that, remote workers may be able to extend their stay for up to five years depending on their circumstances. Close relatives, like children and spouses, will also be able to join the visa holder in the country.

Special Tax Regime for Digital Nomads in Spain.

Until the draft becomes Law, with the Residence permit for digital nomads, everything is on the air, but the development of the “Startup Act” recently passed on the Spanish parliament is expected to have an offer of tax breaks for digital nomads working and living in Spain under the visa scheme.

It will be another special tax regime, like the Beckham Law, which offers residents in Spain to be treated as nonresidents for Tax porpoises. The Special Non-Resident Income Tax for regime for the Digital Nomads will cover up to four/five years.

The bill also includes important tax measures, to favor the establishment of teleworkers and “digital nomads” in Spain.

Remote workers may only pay a 15 per cent tax rate during the first four/five years of their stay in Spain, instead of the usual 24 per cent rate if current plans go ahead.

Notable tax measures are introduced, such as the reduction of Corporate Tax (from 25% to 15%) and the deferral of the payment of the tax debt without interest or guarantees.

To attract talent, the tax regime for Non-Resident Income Tax applicable to directors and employees of startups, investors and “digital nomads” – people in telecommuting temporarily displaced to Spanish territory – and their families, who will be able to access a special visa for up to 5 years. Likewise, the return of talent is favored by reducing the previous non-residence in Spain to 5 years to access this special regime.

The double contribution to Social Security is eliminated for those entrepreneurs who simultaneously maintain a job as an employee.

The Startups Law in Spain

The Startups Law is one of the milestones foreseen in the Recovery, Transformation and Resilience Plan and allows Spain to align itself with the European standards of excellence of the ‘EU Startups Nations Standard’.

If you need more information on the tax regime, please do not hesitate to contact us at US Tax Consultants. Phone +34 915 194 392

PORTUGAL: Digital Nomads will be able to live and work in Portugal full-time thanks to a new VISA

Portugal is also launching on October 30th a new digital nomad VISA. Under the new scheme, remote workers will be able to live and work in Portugal for up to 12 months.

To qualify, applicants must earn at least €2,800 per month – four times Portugal’s minimum wage.

“Portugal is a country for immigration. Every year, we receive thousands of immigrants, seeking opportunities in our country,” said Ana Catarina Mendes, a Portuguese Cabinet minister.

What is Portugal’s Digital Nomad VISA?

The new visa, officially called the “residence visa for the exercise of professional activity provided remotely outside the national territory” – is designed for working professionals. It’s an alternative to the existing ‘D7’ VISA which is a popular residency permit, mostly aimed at retirees and ‘passive income’ earners.

The new VISA was created after the Portuguese government amended immigration law in July 2022.

Applicants will need to be from outside of the European Economic Area; also be self-employed or employed by a company based outside Portugal and earn at least four times the Portuguese minimum wage per month, around €2,800.

D7 VISA holders only need to earn the Portuguese minimum wage (€822.50 per month) per month from ‘passive’ income streams like pensions, rents or investments. The earning requirement for the Digital Nomad VISA must be earned income.

How to apply for Portugal’s digital nomad visa?

As well as showing proof of income for the last three months, applicants must submit tax residency documents and a contract of employment or proof of self-employment.

You can apply at a Portuguese Consulate in your home country, or at Portugal’s immigration agency: Serviço de Estrangeiros e Fronteiras.

Is Portugal suitable for Digital Nomads?

Portugal frequently features in online listicles about ideal remote working locations and with good reason. The major cities feature an abundance of co-working spaces and the country the 17th fastest wifi in the world. With its buzzing cities, rugged coastline, and relatively low cost of living, Portugal is extremely popular with digital nomads.

Major cities Lisbon and Porto are perhaps the most popular destinations for digital workers. In Ponta Do Sol – on the coast of Madeira island – remote workers have set up a dedicated digital nomad village.

1 Comment

  1. Kevin Pilz

    Now that the Spanish Digital Nomad law has been published in BOE, what does it say is the tax implications for those with Digital Nomad-based residency? Much appreciated!


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