B Law & Tax
29 November 2023

Tax Advisor: Spain as a Top Destination for Digital Nomads: Unraveling the Emerging Business Law

Spain advances in the ranking of the most attractive places for digital nomads after this modification in the regulations, as a result of the recent approval of the law promoting the development of the emerging business ecosystem (Law 28/2022, of December 21) or Startup Law. The changes and advantages introduced in the new regulation of the special regime for displaced workers aim to attract the growing community of digital nomads to Spain.

 

From the Beckham Law to Modernization with the Emerging Business Law

In 2005, Royal Decree 687/2005 introduced changes to the Spanish tax regulations by reforming the special regime for displaced workers, known as the Beckham Law. This change benefited prominent figures such as the footballer David Beckham and offered tax advantages to high-net-worth individuals. Following that path, the Emerging Business Law, approved with the purpose of attracting international talent and high foreign incomes, modifies the regulation of the special regime for displaced workers, giving rise to the Beckham Law 2023 and the visa for digital nomads in Spain. The application is extended to various profiles, requirements are adjusted to facilitate visa access, and fiscal conditions are reformed, making Spain more attractive as a residence destination.

Fiscal Optimization for Digital Nomads: The Advantages of the Emerging Business Law in Spain

The Emerging Business Law provides significant fiscal advantages, allowing taxpayers to be subject to a more favorable Non-Resident Income Tax (IRNR) and maintaining their status as taxpayers in Personal Income Tax (IRPF). This entails a taxation rate of 24% for the first 600,000 euros of income from work, compared to 54% in the IRPF. Additionally, it highlights the extension of the permit to the applicant’s family, ensuring similar tax conditions for children and spouses. In summary, the legislation aims to benefit non-European Economic Area digital nomads.

The Emerging Business Law 2023 offers fiscal modifications and facilitates visa access, along with additional attractions such as culture, gastronomy, and a more affordable cost of living in Spain. The visa’s duration, 12 months and renewable up to 5 years, makes it easier for foreigners to establish themselves in the country. It is noteworthy that the direct family members of the applicant also enjoy the benefits of the visa.

Beyond the economic aspects, the legislation provides opportunities for professional development by attracting international talent and skilled professionals. Culturally, the arrival of foreigners contributes to mutual enrichment and learning. The visa’s duration allows the relationships established between Spain and digital nomads and their families to not only be temporary but also to consolidate over time.

 

Process and Requirements for Obtaining the Digital Nomad Visa in Spain

The digital nomad visa in Spain can be applied for electronically through the online platform of the Ministry of Inclusion, Social Security, and Migrations by completing the corresponding form. Other alternatives include initiating the process from the embassy or consulate of the country of origin or entering Spain with a tourist visa and starting the procedures there.

Requirements for the digital nomad visa:

  1. Resident outside the European Union
  2. Have not resided in Spain during the previous 5 tax periods
  3. Demonstrate a work relationship exceeding 3 months in the case of remote workers
  4. The foreign hiring company must have been in operation for more than 1 year
  5. Acquire the status of administrator of an entity
  6. Demonstrate professional qualification
  7. Engage in a professional activity that can be carried out remotely
  8. Have a valid and current health insurance in Spain
  9. Lack of criminal records
  10. A maximum of 20% of revenue with Spanish companies
  11. Financial self-sufficiency: income of at least double the minimum wage in Spain.

 

Guide to Successfully Obtain the Digital Nomad Permit: Tips and Procedures

To obtain the digital nomad permit successfully, it is necessary to submit the documentation and carry out the procedures accurately, and it is advisable to seek professional guidance. Similarly, seeking legal advice during the review of requirements is recommended to initiate the application with the certainty and peace of mind of a successful outcome. Likewise, the provided documentation should be supervised, paying special attention to that which demonstrates compliance with the requirements and ensuring the achievement of obtaining the permit.

 

 

B Law & Tax International Tax & Legal Advisors.

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“In B LAW&TAX we specialize in international tax advisory services for both companies and individuals. If you would like to obtain further information, we would be delighted to assist you at 917817194 or at  [email protected]