Spain plans ‘digital nomad’ visa scheme to attract remote workers

Spain plans to issue “digital nomad” visas giving Britons and other 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% of their income from Spanish firms.

As the law has yet to be passed there are still some details to be hammered out but it is expected that the visa – essentially a residency permit – will be initially valid for one year, renewable for up to five years depending on the applicant’s circumstances. Close relatives, such as a spouse 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 have a contract of employment or, if freelance, show that they have been regularly employed by a company outside Spain.

They must also demonstrate that they will earn enough to be self-sufficient and that they have an address in Spain. It is not clear yet whether they will have to undergo a criminal record check.

For the first four years they will be taxed at 15%, rather than the standard 25% base rate.

Spain joins 15 other European countries that offer some version of a digital nomad visa. 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, in Iceland €7,100 and in 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.

Some countries demand that you have cash in the bank – €5,500 in the case of the Czech Republic – as well as income. Some may also insist on private health insurance.

Madrid, Valencia and Barcelona are already popular among the EU’s digital nomads, with the latter proving a favoured destination for startups as the city aspires to become a technology hub and 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 and so, in common with other startups in the city, the company’s lingua franca is English.

The Start Up law aims to smooth entrepreneurs’ path through the notorious Spanish bureaucracy. At present, it takes an average of 20 to 30 days to set up a company here, 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, in Spain the average monthly salary is €1,751 (£1,516), 20% less than the EU average of €2,194.