What is a Digital Nomad Visa?

In these times of technological advances and with the world becoming more connected every day, you’ve probably heard about the telecommuting visa or digital nomad visa.

A telecommuting visa (digital nomad visa) allows applicants working for foreign companies to exercise a remote professional activity, meaning they can work using technology like a computer or laptop, while living in Spain. This allows them to stay in the country while working for an employer outside of Spain. It's important to note that individuals who are self-employed (freelancers) in Spain or abroad can also work under this visa, but they may only work for Spanish companies if the income from these activities does not exceed 20% of their total earnings.

For example, if your monthly income is $3,000 USD, the income you receive from working for a company in Spain cannot exceed $600 USD.

This type of visa can be processed at any Spanish Consulate General in the United States, but because it is relatively new and has only been recently approved by the Spanish government (Law 28/2022 of December 21), it has raised many questions regarding the required documents for this type of visa.

Some of the most frequently asked questions from applicants are:

• How and where can I obtain the Social Security Coverage Certificate?

• What does it mean to register with Spanish Social Security?

• Where should I pay my taxes?

The first thing to consider is that if the country of origin (where you usually reside) has a Social Security agreement with Spain, based on that agreement, the country of origin must issue a Certificate of Applicable Legislation for digital nomads or teleworkers, so that the worker is covered by healthcare in Spain during the validity of their residence, which is initially approved for one year.

If the country of origin does not have an agreement with the Spanish government, the employer must register with Spanish Social Security and the Large Companies Unit so that their employee can benefit from healthcare. However, this is very difficult for foreign companies to accept because they must pay 33% of the employee's gross salary to Social Security, plus other bureaucratic costs.

Regarding taxes, if you are an employee, the company is obligated to withhold taxes from the employee. If the country of origin, where the tax is withheld, has a tax agreement with Spain, the employee must declare that they have already paid taxes in their home country.

In the case of a self-employed worker, they must directly register with Social Security and the Large Companies Unit, paying at least 80 euros in the first year, and later approximately between 300 and 600 euros depending on their family situation. Therefore, it is recommended that applicants seek professional assistance in these matters.

Self-employed digital nomads adhering to the general tax regime must pay taxes on their net income (income - expenses = net income, and the corresponding tax is applied). This tax is paid quarterly, with an advance of 20%, and then an annual tax is filed for personal income tax.

If they follow the special regime and their income exceeds 60,000 euros per year, they will pay 24%.

It’s important to remember that these are just examples, and each case is different. Therefore, it’s crucial to hire a specialist for advice on these matters.

Finally, we should note that the easiest way to obtain the Digital Nomad Visa is to apply for it once already in Spain, as long as all the required documentation is in order. Why do we say it’s better to apply once in Spain? Because Spanish Consulates abroad issue a one-year visa that is not renewable, which means that after the visa period expires, you must return to your home country. However, if you apply once you are in Spain, the resolution is valid for three years, with the possibility of applying for residency after two years of living in Spain (for Ibero-American citizens).

At SVA, we are committed to helping our clients gather all the necessary documentation before heading to Spain and connecting them with the best lawyers to submit their application and secure their Digital Nomad or Telecommuting visa quickly and safely.

Written by Ángeles, our CEO