As Spain prepares to launch its new Digital Nomad Visa, what do you need to know about moving there in 2023? The country also has a new start-up law that encourages entrepreneurship abroad, and currently has the lowest inflation in the EU and several new social policies. Retirees have historically been a large demographic of foreigners in Spain, but now there are more and more young people in their 20s and 30s.
The new startup law encourages foreigners to become entrepreneurs or investors in the country
In December 2022, the Spanish Parliament gave final approval to the new startup law and the Digital Nomad Visa covered by this law. Legal 500 reports that Spain's secretary of state for digitization and artificial intelligence, Carme Artigas, said the law should come into effect by the end of January 2023.
What exactly is this action? Spain is trying to become a technology centre. The southern European country is known for its agricultural and tourism sectors but is also trying to diversify its economy. At the end of 2021, at the height of the pandemic, the head of the Spanish International Labor Organization, Joaquín Nieto, gave an interview with Hosteltur magazine, where he said that the fragility of the tourism industry during Covid emphasized the importance of diversifying the economy. for the country.
Barcelona has become a dynamic business centre in recent years. It was ranked third in Europe in the 2022 Startup Heatmap report. EU-Startups describe the Catalan city as a hotspot for initial start-ups and "unicorns", i.e. privately held startups valued at over a billion dollars. The start-up law of the Spanish government clearly wants to accelerate this development. Startup Law offers significant tax benefits to new businesses. Law firm Balcell summarizes that young companies receive a discount of 15-25% on corporate income tax for years and can defer their tax debt for two years. Barcelona-based business school ESADE says early-stage investors can now also get a 30-50% tax deduction for the risks they take.
Red tape, for which Spain is notorious, is reduced for entrepreneurs. First, according to the immigration agency Newland Chase, the initial residence permits are approved only 10 days after the application, if the project has been approved by the national agency for initiation (ENISA).
In Spain, any foreigner can set up a company, as long as he is a legal resident - even if he is not a permanent resident. If you are still outside Spain, you can apply for a business visa. All you have to do is present a realistic business plan that is in line with the welfare of the country. As the law firm Balcells says, you can show how your company creates jobs for Hispanics or uses cutting-edge technology.
The Enterprise Committee of the State Council also says that residence visas for entrepreneurs and investors operating abroad are now valid for 3 years instead. They no longer have to go through the bureaucratic hassle of renewing it after just one year. Obtaining a foreign identification number (NIE) is also procedurally easier for applicants under the Start-up Act.
Digital Nomad Visa continues to attract younger remote workers and freelancers to Spain
One of the most exciting aspects of the Standing Act is of course the new Digital Nomad Visa. As several southern European countries from Greece to Portugal and Malta introduce these very popular visas, Spain does not want to be left behind. It is clear that the Spanish Digital Nomad Visa is mainly aimed at foreigners from outside the European Union and the European Economic Area, who do not have the privilege of free movement in Spain.
This Digital Nomad Visa gives foreigners the right to live and work in Spain for 5 years. It is initially granted for one year, after which it can be extended times. Although it cannot be extended until the sixth year, foreigners can apply for a permanent residence permit during that time if they wish. Their spouses and dependent children can also travel with them on the same visa.
To obtain a visa, foreigners must earn twice the Spanish minimum wage or at least 2,100 euros (about 2,300 USD) per month. They must earn at least 80% of this income from abroad either as remote workers for non-Spanish companies or as freelancers with foreign clients. They can only earn 20% of their income from Spanish sources and this ensures that they are not competing with Spanish workers, including Spanish freelancers. They must also have worked remotely for at least a year to show that they are used to this way of working.
An interesting result of the post-Covid rise in digital nomadism is that the expat population is getting younger. American insurance company Cigna's Burned Out Overseas - The State of Expat Life 2022 report shows that 71% of expats are currently under 35 years old. On the other hand, older foreigners, over 50 and 60 years old, are returning home. This is not limited to Spain; this has been a global trend since at least 2015. As reported by the British consulting firm Forth Capital, a study by NatWest Bank revealed that a third of British expatriate pensioners plan to return to the UK. This must surely include many retired Brits in Spain.