When the pandemic came, we moved our business to being wholly remote in a matter of hours. All the systems and processes for remote working had been put in place way back in 2015.
I know this because I was the one who put them in place for my first adventure as a digital nomad.
Myself, my wife and our 11 month year old daughter upped sticks and moved to Spain for an extended period. I continued to work on my business, but I did so from the centre of Malaga city.
My business continued to flourish during my time abroad and we repeated this extended travel for a few years after.
Since 2015, the popularity of those leaving their home country and working remotely has increased exponentially. This was compounded by the pandemic where many businesses moved to a fully remote and distributed workforce, allowing their employees to work from anywhere. Some of course chose to work from home, but many chose to travel to a different country where allowed.
One of the major drawbacks to being a digital nomad for an extended period of time is the situation around getting a VISA from your host country, legally allowing you work and live there for the duration of your stay.
Recently digital nomadism has hit the news again as Spain has updated and somewhat relaxed their Spanish Digital Nomad Visa requirements.
What is a digital nomad?
Digital nomads are workers who leverage the use of technology to perform their job regardless of their physical location. Digital nomads often consider themselves location-independent and often travel during their remote working schedule. A digital nomad can also refer to someone who telecommutes from a single location away from their employers registered offices.
Technological advances and adoption of cloud based networking, coupled with the widespread acceptance of digital meetings, means the barrier to becoming a digital nomad is lower than ever.
What is the new Spanish digital Nomad visa?
In an effort to bring international talent and skills into the Spanish economy, the Spanish government has agreed to a new and unique digital nomad visa that will be passed into law from January 2023.
This has been widely welcomed by business leaders and remote workers / digital nomads who will now find the process of living and working in Spain a much easier process to navigate.
The Spanish digital nomad visa has been created to allow non-resident individuals to legally work remotely from Spain. The visa and its accompanying residence permit will allow holders to stay for up to 5 years.
Alongside the new Spanish digital nomad visa, the government has also approved a draft law that will make starting a business in Spain much more streamline, additional support with paperwork for start ups and assistance with taxes on companies and entrepreneurs.
Who can apply for Spain’s Digital Nomad Visa?
The digital nomad visa is focused on any country outside of the European Union. While not directly targeted at British nationals, it will have a huge impact for those from Britain looking to live in Spain where freedom of travel is restricted due to the exit from the European Union.
Are there tax benefits with the Spanish digital nomad visa?
As part of the new legislation surrounding the visa, a specific focus has been placed on making Spain financially attractive for digital nomads.
Those who hold the Spanish digital nomad visa will receive a reduction in income tax from 25% to 15% for up to 4 years.
What are the rules for my family?
As part of the digital nomad visa, there has been provision made for immediate family members, such as your spouse and dependent children under 18 to be included on your visa. Children over 18 years old will need to prove that they are financially dependent on you or in your care. Otherwise they will need their own visa application.
What is particularly attractive about this visa is that your spouse will be able to work in Spain without restriction if they choose to.
Spanish digital nomad visa requirements 2023 onwards
The digital nomad visa is available for:
- People from outside the European economic area
- Who work for companies outside Spain
- Or who’s work for Spanish companies does not exceed 20% of their total income.
In addition to the above, applicants for the Spanish digital nomad visa must also prove the following
Employees of companies
- They have worked remotely for more than 12 months
- That they have been an employee for more than 3 months
- That the company allows remote working
Freelancers
- That they work for at least one company outside of Spain
- Provide the terms and conditions of their contract with this company including how remote work is facilitated.
How to apply for the Spanish digital nomad visa?
You can apply for the Spanish digital nomad visa by visiting the Spanish consulate in your home country. Alternatively you can apply for the visa when you are in Spain on another visa, such as the 90-day Schengen visa.
While you don’t need to consult a lawyer in Spain for the purpose of this visa application, it may be a consideration if you want them to check over your application. There are a good number of lawyers well versed in the Spanish digital nomad visa application process and these can be easily found online.
How will taxes work for the digital nomad visa?
This is one of the most important unanswered questions at this time. To make the digital nomad visa work, there needs to be little or no resistance for foreign companies in managing this visa for their workers.
The final law is due to be passed in January 2023 and this will outline how taxation will be treated.
What are the benefits of working from Spain on the digital nomad visa?
The benefits of living and working in Spain will be personal to you, but some of the key benefits we would give consideration to include:
- Quality of life
- Weather
- Lower income taxes
- Lower cost of living
- Spouse can work unrestricted
- Residency after 5 years
With everything stated above, the new digital nomad visa is very attractive for anyone outside of the European Economic Area. Those European nationals already have free and unrestricted movement within the the EU.
What about those from Northern Ireland?
If you’re from Northern Ireland and have the ability to carry both UK and Irish passports, it would make sense to get a clearer picture on the income tax implications of working under an Irish passport or UK one. It may be that one holds a greater advantage over another.
I can tell you personally that being a digital nomad is awesome. It is not without its challenges, but the benefits for me, massively outweigh any of the disadvantages I’ve faced.
Good luck on your journey. Wherever it takes you.
