The Government of Spain is immersed in the drafting of the so-called ‘Startup Law’ which introduces unprecedented new features and advantages for the international community, such as the creation of a special visa for digital nomads and foreigners who telework from Spain.
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The objective of this new law is to promote entrepreneurship, the creation of technology companies, attract investment and foreign talent and turn Spain into an international benchmark hub. To this end, this legal norm - currently in the draft law phase - provides tax incentives. It is about making Spain an attractive country for both emerging companies and foreign professionals who can develop their activity from anywhere in the world.
Who can apply for the Spanish visa for digital nomads?
Until now, many foreigners had problems coming to Spain to work remotely for a foreign company while enjoying the Spanish climate and lifestyle. There was no ad hoc permit and the so-called "non-profit visa" was the option that best suited these cases, although always subject to the interpretation of each consulate.
With the approval of the Startup Law in Spain - scheduled for a few months - all those citizens will have it much easier. Specifically, this new residence permit will benefit three professional profiles:
- Foreigners who work remotely from Spain for a foreign company
- Digital nomads
- Professionals who work for a foreign company located in Spain, including the audiovisual/media sector.
New residence permit
This new visa for digital nomads will facilitate obtaining residence in Spain. Why? Because it will authorize its beneficiaries to work remotely from Spanish territory for one year with the option to renew for two more years, successively, provided that the requirements are met. In short, the residence permit will be much easier and faster for this large community of teleworkers and foreign entrepreneurs.
Tax reductions
For foreign remote workers, digital nomads and startups to choose Spain as their destination, the new law also provides for tax benefits. Those who apply for the visa under the startup law will enjoy a new, more flexible tax regime to pay and access the Non-Resident Income Tax (IRNR), as well as a reduction in this rate. The IRNR is the tax levied on the income obtained on Spanish soil by non-resident workers and companies, that is, they do not stay in Spain for more than 183 days a year.
The new law will also reduce the IRNR tax rates. It will go from 24% to 15% for four years for income under € 600,000 per year. For higher figures it remains at the rate of 47%.
On the other hand, the conditions of access to the IRNR will be simplified, from 10 to 5 years the enforceable period of tax non-residence in the country; and the term of beneficiary of this tax framework will be extended from 5 to 10 years.
You can also request the deferral of the IRNR in the first and second fiscal years with a positive tax base and you will not have to make installment payments of the tax as a non-resident in the two subsequent years in which the tax base is positive.
Requirements in order to be a beneficiary of the new tax regime
Interested persons must demonstrate their status as international teleworkers:
- Being a foreign employee of a company located outside of Spain that travels to Spanish territory to carry out its work through telematic means.
- Or, be a foreign independent professional who works remotely through digital means and his income comes mostly (80% or more) or entirely from foreign companies.
When does the new ‘Startup Law’ and the visa for digital nomads come into force?
On July 6 of this year 2021, the Government presented the draft law (stage prior to the enactment of a law), which has already been submitted to public consultation, that is, citizens have already participated by providing suggestions, opinions and contributions. These contributions are currently being studied for their possible incorporation into the future law. When this evaluation process concludes, the Government will have the final text that it must present in the Congress of Deputies to submit it for debate and subsequent voting. It will be then when the law is approved and enters into force.
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If you need any more information regarding the non-lucrative visa or the new Startup Law, do not hesitate to contact our team:
