In 2021, the Spanish government approved the Startups Law which aimed at encouraging the development of the booming startup industry. The new law seeks to make Spain one of the most desirable destinations not only for tourists but for innovative entrepreneurs too.
Having a special digital nomad visa, foreign professionals and their close family members will be able to live in Spain for five years and be eligible for a special tax regime (Non-Resident Income Tax) with lower rates.
Spain’s Startup Law has already been approved by the government but is not up and running yet. But according to the draft law by Telework Andalucia, a company that provides legal advice to remote workers and digital nomads in Andalusia, the following points are among the key benefits and implications which can be expected from Spain’s digital nomad visa:
- Digital nomads who come to Spain to work for a local startup, work independently, or are digital entrepreneurs will benefit from quicker visa processing.
- Specific visa requirements will be launched to cover different profiles. The majority will benefit from favorable taxation and a lower tax rate. The tax regime of the Non-Resident Income Tax will be applicable to managers and employees of startups, investors, and digital nomads and will provide visa holders and their family members with the ability to access a special visa of up to five years.
- Non-Resident Income Tax will be reduced from 25% to 15% during the first four years. Important that anyone residing in Spain for more than 183 days is considered by the law as a resident, and is liable to pay tax on all the revenues they earn, regardless of where that money comes from. Meaning that there are risks of double taxation for nationals from countries which Spain hasn’t signed a double taxation agreement with.
- Non-resident Spanish nationals and expats who have been abroad for more than five years will also be eligible for the digital nomad visa. The period of enjoyment for them will be extended from five to ten years, and their family members will be able to benefit from it.
Spain’s Startups Law is currently going through parliamentary processing and is scheduled to come into force by the end of 2022 – the beginning of 2023.