The Spanish Digital Nomad Visa: combine residency and tax efficiency in Spain

The Spanish Digital Nomad Visa is designed for non-European Union and European Economic Area (EU/EEA) nationals who wish to live in Spain and work remotely for foreign companies or clients.

It was introduced in 2023 as part of Spain’s Law of ‘Fomento del Ecosistema de Empresas Emergentes’, commonly known as the ‘Start-up Law’, which was designed to boost the Spanish economy by attracting international talent and entrepreneurs.

To qualify, applicants must be non-EU/EEA citizens who work remotely via information and communication technology for non-Spanish companies and who have been employed or contracted by their current employer for at least three months.

They must also have an undergraduate or postgraduate degree from a recognised university, college or business school, or have at least three years of work experience in their current field of activity.

Self-employed freelancers are also eligible, provided they primarily work with foreign clients and not more than 20% of their total income from professional activities is derived from Spanish companies.

The visa, if granted, can include a spouse and minor, as well as any dependent older children or dependent parents or grandparents.

Applicants must demonstrate a stable income, generally a minimum of around €2,646 per month (twice the Spanish minimum wage) to prove financial self-sufficiency.

Additional sums are also required to cover dependants. For the first family member they must prove additional financial means of at least €993 (75% of the Spanish minimum wage) per month, with a further €331 (25% of the Spanish national minimum wage) per month required for each additional dependant.

A Digital Nomad Visa is initially granted for between one and three years, with the possibility of renewal for up to five years. After this period, visa holders may apply for long-term residency in Spain.

Digital Nomad Visa holders may also be able to benefit from a reduced tax rate because most successful applicants will be eligible for the attractive ‘Beckham’ regime.

The Beckham Law

It should be noted that the Beckham Law, officially known as the Special Expats’ Tax Regime (SETR), is not an immigration status. It is a special tax regime available to Spanish tax residents who meet certain conditions, which can only be applied for after the right to reside to Spain has been obtained – i.e., only after a Spanish visa has been granted.

The SETR regime is applicable during the first six years of tax residency in Spain and the applicant must not have been a tax resident in Spain during the five years prior to their relocation for employment purposes.

Eligible persons under the SETR must be relocating to Spain for work purposes and either:

• Hold an employment offer prior to entry into Spain.
• Hold a Spanish Digital Nomad visa.
• Move from a foreign company.
• Are a director of a Spanish company without owning more than 25% of its shares (unless you hold a Start-up or Entrepreneur visa).

The work carried out in Spain must constitute most of the applicant’s professional activity. A maximum of 15% of the work can be carried out abroad.

The employer may be a Spanish or foreign legal entity, but the income must not be attributed to a permanent establishment in Spain.

These conditions extend to the applicant’s spouse and dependent children under the age of 25, as well dependent parents and grandparents who move with the taxpayer within the first year of the application.

Individuals are resident in Spain for tax purposes if they meet at least one of the following criteria:

• Spend more than 183 days in Spain during a calendar year. In determining the period of stay, temporary absences are included in the count, except when the tax residence in another country can be proven. There are special anti-avoidance rules in place for tax havens.
• Spain is the main base or centre of their activities or economic interests.

It is also presumed that a taxpayer’s habitual place of residence is Spain if the taxpayer’s spouse and minor dependent children are tax resident in Spain.

Spain does not allow for split-year treatment and the tax year coincides with the calendar year. So, a person is deemed either tax resident or non-tax resident for the whole year from 1 January to 31 December.

Ordinary Spanish tax residents are liable to:

• Income and capital gains tax on their worldwide income and capital gains
• Wealth tax on their worldwide net wealth
• Inheritance and Gift tax on the acquisition of assets by way of gift or inheritance (Spanish inheritance and gift tax is payable by the beneficiaries).

Under the Beckham Law, qualified individuals are subject to income, capital gains and wealth tax only on a territorial basis (i.e., derived or accrued in Spain), except for employment income which is taxed on a worldwide basis at a flat rate of 24% up to €600,000 per year, instead of the progressive personal income tax (IRPF) which ranges from 19% to 47%. Any employment income exceeding the €600,000 threshold will be taxed at the top IRPF rate of 47%.

There is no special treatment under inheritance and gift tax, but the Spanish regions can set their own rates and reliefs. Some regions – notably Madrid, Andalusia, the Balearic Islands and Valencia – have introduced 99% or 100% exemption reliefs for next-of-kin transfers.

An application for the SETR regime must be made within six months of registration with the Spanish Social Security and must include the following documentation:

• Your passport and Foreigner Identity Number (NIE). The NIE is a unique personal identifier that is assigned to foreigners who, for economic, professional or social reasons are engaged in activities related to Spain.
• Spanish Social Security number.
• Contract of employment.

Digital Nomad Visa requirements

Applicants for a Digital Nomad Visa (and their family members) must be able to evidence that they have:

• Valid passport.
• Clean Criminal Record Certificate.
• Proof of legal residence.
• Health insurance.

In addition, they are also required to provide:

• Certification of working for a foreign company for at least three months prior to the visa application.
  • If the applicant is an employee – length of the contract and explicit consent to work remotely in Spain.
  • If the applicant is self-employed – length of the contract and the terms and conditions to work remotely in Spain.
• Certificate issued by the relevant foreign Companies Register, declaring the date of creation of the company (or companies) and the nature of its business.
• Responsible declaration by the company (if the applicant is an employee) or the applicant (if self-employed), stating their commitment to comply with the Spanish social security obligations before starting any work-related activity.
• Registration with the Spanish Social Security.
  • If the applicant is an employee – certificate proving the company and employee’s registration with the Spanish Social Security.
  • If the applicant is self-employed – certificate of registration with RETA (Régimen de Trabajadores Autónomos de la Seguridad Social española).
    This requirement may be exempted for applicants that work in a country that has an international Social Security agreement with Spain.
• Documents proving sufficient financial means for the applicant and family members – work contract, bank statements, payslips, etc.
• Copy of university degree or professional certificate confirming that the applicant has at least three years of experience in their business activity. To practice a regulated profession, your foreign qualifications may need to be officially recognised.
• Documents proving family relationship with the applicant: birth or marriage certificates, certificate of registration as an unmarried couple, documents proving financial dependence and civil status in the case of adult children, parents or grandparents.

Foreign documents must be legalised or apostilled and must be submitted together with an official translation into Spanish.

Applicants can apply either within Spain or at a Spanish consulate or embassy in the applicant’s home country.

Sovereign Residency and Citizenship solutions

Sovereign’s extensive network of offices, experienced local teams and professional service partners ensure that we are well placed to assist clients in the development and implementation of the most suitable overall residence strategy for their needs.

We will work closely with applicants during each stage of the planning and implementation process.

When combined and managed correctly, the following Sovereign Group services will also enable clients to develop and implement a comprehensive, flexible and tax efficient strategy:

• International residency and citizenship programmes
• Tax residency programmes and planning
• Trusts and foundations
• Estate and succession planning
• International retirement plans
• Wealth management
• Corporate structures and banking
• International life and medical insurances.

If you have any questions or would like to discuss how you and your family could benefit through the creation and implementation of an international residency, tax residency or citizenship-based strategy, please contact Sovereign’s Residency and Citizenship Planning team below.