Spain to offer digital nomads with tax breaks
Spain will issue digital nomad visas to give 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 those who work remotely for businesses outside Spain and have a maximum income of 20% from Spanish firms.
As the law is yet to be passed there are still some details to be hammered out, but it is expected that the visa essentially will be valid for a year and can be renewed for up to five years depending on the applicant's circumstances. Close relatives, such as a spouse or children, are eligible to join the application.
The 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 employed regularly by a company outside Spain.
They must show that they will earn enough to be self-sufficient and 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 a version of a digital nomad visa. Each country has its own set of conditions.
In Croatia, for example, applicants must have at least €2,300 a month, in Estonia €3,500, in Iceland €7,100 and in Portugal only €700. It is thought that Spain will set a minimum monthly income of around €2,000.
In October 2021 Greece introduced a digital nomad law that allows residents to stay for a period of one to three years. Some countries demand that you have cash in the bank of the Czech Republic, as well as income, in order to have €5,500 in the bank. Some people insist on private health insurance.
Madrid, Valencia and Barcelona are already popular among the EU's digital nomads, with the latter being a favoured destination for startups as it aspires to become a technology hub and less dependent on tourism.
It is easy to attract talent. Sacha Michaud, who co-founded Glovo food delivery business, says that Barcelona is small and densely populated and it is cosmopolitan.
The staff at Glovo are international and in common with other startups in the city, the company's lingua franca is English.
The Start Up law aims to smooth the path of entrepreneurs through the notorious Spanish bureaucracy. It takes an average of 20 to 30 days to set up a company here, compared to one day in the Netherlands or the UK.
Spain was ranked as 30th in the World Bank's ease of doing business report in 2020.
In rural areas, where rents are very low, excellent 4 G cover is almost everywhere in Spain which is tempting for some nomads to set themselves up in rural areas. The Internet speed is among the fastest in Europe and is almost double the UK speed of 75 Mbps at 148 Mbps.
For residents of cities such as Madrid and Barcelona, a negative effect is that nomads charge higher rents as people working remotely for US or UK companies can command higher salaries and pay higher rents than locals.
According to a report released this year, the average monthly salary in Spain is €1,751 1,516 20% less than the EU average of €2,194.