Imagine late evenings in tapas bars and weekend trips to some of Europe’s best beaches. Spain’s new digital nomad law has been anticipated for over 16 months, and finally the Spanish parliament has given the go-ahead to a new startups and digital nomad law which paves the way for a new generation of visitors and nomads to use Spain as a home base.
If you’ve dreamed about or are seriously considering living and working in Spain, this new law will bring tax benefits and other perks to digital nomads, entrepreneurs, and remote workers. Perhaps most compelling for remote workers, are the details of Spain’s New Digital Nomad Law.
The world is beginning to embrace this new exciting trend, it appears Spain wants in on it too.
Startups & Spain’s New Digital Nomad Law
The expectation is that this long discussed, but brand new digital nomad law will take effect on January 1st, 2023. The nuance of the tax laws and when new fiscal laws will take place for handling taxation from 2023, which is a significant motivator for fast approval.
Basically, there’s a financial incentive for the Spanish authorities to have the law operating by January 1st.
The startups law, known as Ley de Startups, still needs approval in the Spanish Parliament, which is expected in January 2023. With significant legislative support, the law should be easily ratified within the coming weeks.
Broadly, the law will be open to those from the EU or third countries, those outside of Europe where there will be considerable interest, as long as they have not been a Spanish resident within the past five years.
Major Points of Spain’s New Digital Nomad Law
The most interesting part of the legislation is Spain’s New Digital Nomad Law, is that the legislation has several exceptional benefits for digital nomads.
There is a specific definition of a digital nomad used in the law, and the new law defines a digital nomad as “people whose jobs allow them to work remotely and change residence regularly.”
The significant points include the following:
- Tax Breaks For Digital Nomads
- A New Visa for Digital Nomads
- Extension of Foreign Student “Stay Period” Following Graduation
New Digital Nomad Visa Tax Breaks
Benefits under the new law include a tax rate reduced to 15 percent for investors, start ups, and remote workers who generate income in Spain, as long as they comply with the residency rules and do not stay for more than 183 days in a year.
The tax rate is a further reduction of the non-resident income tax (IRNR) of approximately 25%, and specifically applies to digital nomads. Digital nomads will also enjoy this 15% tax rate and will be able to stay for a longer period.
The new law creates a digital nomad visa offering a year in Spain, which can be extended to a residence authorization of two years. Then an additional five years. So, maybe stay awhile?
While the Digital Nomad Law section of Ley de Startups is relatively straightforward, you should study things further if you’re considering a base in Spain.
Several requirements need to be met, including “a need for innovation,” which must be accredited both for this status and that of an ’emerging’ company. There is the potential for a corporate tax rate reduction to 15 percent for up to four years.
More and More Digital Nomad Offerings
The digital nomad life is a fun and adventurous lifestyle, it’s fabulous for those who can take advantage of the freedom, even if only for a few years. There’s nothing quite like the joy of travel, of immersion in the local culture, and deeply understanding a destination.
From Portugal to Vietnam to Dubai, Barbados, Malaysia and many-many more, there’s been a huge uptick in destinations attempting to lure long term visitors in with new digital nomad visa programs.
Countries are now starting to believe that it’s much better to have people spending money in the country, thus supporting local businesses and creating tax revenue than arbitrarily being kicked out. Nomads typically bring robust support to cafes, restaurants, and neighborhood shops, while also filling vacant apartments.
With Spain’s big announcement, there’s more good news for digital nomads. But that leaves a tough yet exciting decision. That decision is where you may want to live in Spain. In the winter, it’s tough to beat Valencia or Mallorca, but Madrid or Barcelona is a classic debate.
