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Spain seeks to attract digital nomads and startups with new law

After many months of waiting, Congress approved on 3 November 2022 the draft Law for the Promotion of the Entrepreneurial Ecosystem (in spanish 'Ley de Fomento del Ecosistema de las Empresas'), commonly known as 'Startup Law', with the intention of attracting foreign talent and investment.

Spain seeks to attract digital nomads and startups with new law
Categories Lifestyle,News
1 Dec, 2022

A few years ago, few people believed that teleworking was possible, or at least productive. Fewer still thought that going abroad, with a computer and a backpack, and creating content for websites, selling products online or running a business from your own computer could be considered a successful job. Nothing could be further from the truth. The pandemic has shown us that teleworking is possible and that it means both savings for companies, improved work-life balance for workers and all this without losing productivity. And it is here to stay and, of course, to evolve.

There are already many people today who, for whatever reason, work outside their home country in search of new cultures and tax breaks. For those entrepreneurs and workers from outside the European Union who meet certain requirements, the Spanish government has passed a bill granting a special visa to reside in Spain while working remotely for their foreign companies.

This law is called in spanish Ley de Fomento del Ecosistema de las Empresas (Law for the Promotion of the Entrepreneurial Ecosystem), although it is also known as the 'Startup Law', which will attempt to regularise the legal vacuum in which many workers and companies in Spain find themselves. This new law is expected to come into force on 1 January 2023.

These types of tax advantages for digital nomads and startups have already been in place for some time in countries such as Estonia (which was the first to issue this type of visa for new companies and foreign workers in 2020), Portugal or Croatia.

What or who is a digital nomad?

Man working remotely from a coworking in Spain

Digital nomad is the colloquial name we have for those remote workers who work thanks to the Internet (freelance or for a company), away from their place of origin. Since they are not tied to any place and have the means to travel and see the world, they spend short periods of time in different countries of residence, often resulting in 'tax statelessness', i.e. they are not taxed in any state.

Advantages of the visa for digital nomads and startups in Spain

  • The main advantage is the very recognition of the existence of such companies and workers.
  • To be able to live in Spain for up to 3 years.
  • To be able to register a company with tax benefits.
  • Being able to defer debts and some tax rebates.
  • It is an opportunity for Spaniards who have been working for foreign companies and for Britons fleeing Brexit to return.
  • It is a way to obtain a permanent residence permit in Spain or the NIE.
  • The IRNR (Non-Resident Income Tax) lowers its general rate from 25% to 15% in the first four years after the base is positive.
  • As for the maximum deduction for investment in newly created companies (which are now considered to be up to five and seven years old and up to €5 million in turnover), it is increased from €60,000 to €100,000 per year. This deduction is also increased from 30% to 50%.

Visa requirements for digital nomads and startups who want to operate in Spain

  • To carry out work or professional activity at a distance for companies located outside Spain, through the use of telematic tools.
  • At least 80% of the income must come from abroad.
  • Only companies that have been in business for less than 5 years are eligible.
  • In the case of workers, they must provide proof of their employment contract (at least 3 months old and 1 year in duration), authorisation to work remotely, a document proving that they have more than 3 years of work experience and a higher education diploma proving that they are qualified.

Procedures for obtaining a visa

This new law has not yet entered into force. It is expected to do so from 1 January 2023. In Luxinmo Real Estate we will be attentive to offer you all the news about the digital nomad visa in Spain.

Golden Visa in Spain

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Living on the Costa Blanca as a Digital Nomad

Views of Benidorm Poniente, a potential financial centre on the Costa Blanca Views of the Poniente area in Benidorm. An important financial centre on the Costa Blanca

Who wouldn't like to live in Spain? It is a country that has everything: good weather all year round, different cultures, paradisiacal beaches, good infrastructures, beautiful cities and towns...

That's why the Costa Blanca is always among the most sought-after tourist and new home destinations around the world. And more and more people are looking to move here to work as a digital nomad.

Apart from leisure tourism, the province of Alicante is one of the major business centres with the greatest potential in Spain, with the headquarters of the EU Intellectual Property Office (EUIPO) in the city of Alicante itself.

Another city where you can find an important business centre on the Costa Blanca is Benidorm, Spain's tourism capital par excellence. Benidorm is home to many digital nomads due to its good climate, its location by the sea and close to the cities of Alicante and Valencia, and its unrivalled year-round leisure offer. It's a great attraction if you're looking to telecommute in Spain. Some of the most affluent digital nomads are starting to live in the Poniente area, the most luxurious area of Benidorm, where you can find luxury developments such as Intempo or Delfin Tower.

You can find coworkings with all the services you need in practically all the major towns on the Costa Blanca. Here are some of them:

  • La Nucía: LAB Nucía
  • Alicante: ULab
  • Altea: LAB Altea Coworking
  • Benidorm: Tourist Lab
  • Calpe: Coworking Calpe
  • Denia: Knowhere Denia
  • Jávea: Coworking Jávea
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