Spain’s New Remote Worker Visa is Here, but Concerns Still Remain
In large part due to the COVID-19 pandemic and the rise of work-from-home options, many countries worldwide have created digital nomad-type visas in recent years. While these visas allow remote workers to reside in a country temporarily—usually a few years at a time—there are concerns about their presence's negative impact on residents. Many countries, including Croatia, Bermuda, Panama, Malaysia, and Namibia, have all released digital nomad-type visas, with many more countries in the process of doing so. Another country that has recently released a digital nomad-type visa is Spain.
In January 2023, Spain released its digital nomad visa. This new work authorization has been more than a year in the making, with plans previewing its existence emerging back in January 2022. The digital nomad visa is part of the new Startups Law, which aims to modernize the Spanish business economy by making it easier for highly skilled workers to move to Spain to work for a Spain or internationally-based company. It also aims to create incentives for new startup companies to begin operations in the country leading to increased tax revenue and investment. This visa differs from a standard tourist visa since tourists cannot work in Spain.
An individual must meet the following prerequisites to be eligible for the visa. First, they must be a citizen of a non-EU/EEA country and be working for a company based outside of Spain. These citizenship rules apply due to the Schengen Area, which allows EU and EEA citizens to work in any signatory country. A small caveat exists for freelancers who can earn up to 20 percent of their income from Spain-based companies.
Second, remote workers must have worked for their current employer for at least three months, and their company must have been in operation for at least one year. The company must provide written documentation stating that the employee is a remote worker. Due to the digital nomad visa's newness, there is still no complete clarification on how much money a remote worker must make. According to the published law, workers must make at least 200 percent of Spain’s monthly minimum wage, which is a little over 2,700 USD monthly. However, the Spanish government reserves the right to modify this percentage by March 31, 2023.
Other requirements to be eligible for the visa include not having residency status in Spain within five years of applying, no criminal record, enrolment in a private health insurance plan, at least a university degree or three years of professional experience, and proof of accommodation. Once the visa application is submitted and approved, remote workers can renew the year-long visa for up to five years and include dependents, like their spouse and children.
Spain has many reasons to be an attractive remote work destination. It has a temperate Mediterranean climate, a low cost of living compared to similarly sized cities in the U.S., and offers an environment conducive to remote work. Valencia, located on the country’s Mediterranean coast, was voted the best city in the world for remote workers, and Madrid finished in the top ten. One-bedroom apartments in the center of Madrid are available for less than 1,000 euros, with prices decreasing further towards the city limits.
Large metropolitan areas are not the only potential destinations for remote workers. Small towns and villages, anticipating the release of a digital nomad-type visa and in a fight to stave off population decline, are attempting to portray themselves as attractive destinations. In 2021, dozens of Spanish villages and towns united to create the National Network of Welcoming Villages (Red Nacional de Pueblos Acogedores in Spanish), whose goal is to attract remote workers. These villages number as small as a few hundred inhabitants and are spread throughout the country, including in Álava, Albacete, Las Palmas, Salamanca, and Zamora. As of early 2023, 42 towns and villages are part of this initiative.
However, in recent years, Spain has had a contentious relationship with foreigners, especially tourists. Barcelona has been the epicenter of anti-tourist backlashes, with locals blaming the influx of tourists for the increasing unavailability of affordable housing. Landlords have capitalized on increasing tourists, renovating their properties into short-term rentals where they can earn up to four times as much as renting it out to a resident or family. In 2022, the average rent increased by over 25 percent.
These anti-tourist and anti-foreigner outbreaks occur not only in Spain but worldwide. Areas that have a more developed remote work environment than Spain are starting to witness increased local discontent. In Lisbon, wealthy immigrants, including Americans, have flocked to Portugal in recent years due to the climate and low cost of living as well as friendly immigration laws, which allow an individual to gain Portuguese citizenship after only five years of legal residency. Over the previous decade, the number of foreigners in Portugal increased by 40 percent, while in 2021, the number of Americans increased by 45 percent. The growing number of wealthier foreigners has led to large-scale gentrification and an increase in housing costs, with the average Portuguese citizen no longer able to afford to live near the city center. In Lisbon, rent prices increase multiple times yearly, and evictions have more than doubled. Due in part to combat a lack of affordable housing, Portugal announced in February 2022 that it was ending its famous Golden Visa. This visa allowed non-EU citizens to purchase a set amount of real estate and, in exchange, receive Portuguese residency and potential citizenship.
The Spanish government needs to prepare itself for how a future influx of higher-income remote workers will impact an already stressed housing market, especially for renters. Spain has one of the smallest rental housing markets in Europe, with only 23 percent of people renting their homes, and average rental prices increased by 50 percent between 2015 and 2019.
Additionally, Madrid has the most expensive rental market in Spain, with the average rent being 10.4 euros per square meter in 2020. The local discontent in Lisbon, as shown above, provides warning signs for Spain if it does not ensure that an influx of high-income immigrants will not harm the local population. Spain has already started to remedy this problem by passing a “Right to Housing” Law in early February 2023, which allows autonomous communities to impose rent caps in areas deemed to have few housing options. However, it is still too early to determine its effect. In coordination with regional and local governments, the Spanish government must ensure that landlords follow the new law and that penalties are timely and regularly imposed on non-compliant landlords to ensure that the law’s goals become a reality. If not, what is happening in Lisbon will likely become a big problem for the Spanish government in the near future.
Author: Joshua Rodriguez
Managing Editor: Sebastian Reyes
Web Editor: Shreya Lad