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In recent times, the most significant changes to our daily lives have been the implementation and promotion of remote work. Bringing the work to the worker, instead of the other way around.
In recent years, remote work has become an increasingly popular practice. All companies, regardless of their sector, have been forced to reinvent themselves and the way they work. Companies have had to discover how to continue in an upward performance trajectory without their employees working in person. Working from home, or remote work has become an almost universal solution.
Several studies have confirmed that working at home increases productivity and can encourage employees to increase the amount of time they dedicate to their work.
The ¨WFH¨ lifestyle has led many citizens to rethink their way of life, some have even moved across states and counties, as their new work performance model can be applied almost anywhere in the world, without affecting their job status. Workers around the world have moved to places with better quality of life, better weather and more affordable housing or medical care; in response to the increase of these kinds of workers, a new term defines them as digital nomads.
Digital Nomad visa Spain
Because of Spanish Consulates’ criteria, digital nomads are usually unable to develop this new lifestyle in Spain because Consulates do not allow to reside in Spain while working remotely as foreign employers. However, once legally in Spain, there are no restrictions in this regards, but at the application stage it is very hard to achieve a favorable resolution when the main source of income comes from a job position.
Third-country nationals who intend to reside in Spain at present, and work remotely for their foreign clients, must register with Social Security as self-employed professional. According to Spanish law, they must apply for a residence and self-employment permit, confirming the viability of their project, and complying with requirements such as creating jobs or relationships with future clients in Spain. Many such digital nomads will not be authorised. Furthermore, foreigners who wish to reside in Spain and work remotely for their foreign employers will not be able to do so either, given that applications for Non-Lucrative residence permits (which, according to the law, could be obtained by digital nomads with non-Spanish employers) are being denied by the Spanish consulates, as they do not allow a foreigner to work remotely as an employee of a foreign company while residing in Spain on a Non-Lucrative Residence Permit.
Therefore, to accommodate digital nomads in Spain, it will be necessary for the administration to develop a permit that allows these foreigners to have residency in Spain while working remotely for their clients or employers in another country. Spain should follow in the footsteps of other European countries, such as Germany and Portugal, who have already taken steps to authorize special residence permits for these professionals. This would undoubtedly boost digital and technological talent in Spain, as well as the creation of business projects that can have an economic and social impact on the country and promote job creation, all of which will help the government to gradually emerge from the financial crisis in which the pandemic we are experiencing is leaving us.
Digital Nomad visa in Portugal
If, however, digital nomads work remotely and live in PORTUGAL, the country has relatively comprehensive legislation when it comes to residence visas, regardless of nationality. Because of the country’s beauty, mild weather, security and quality of life, Portugal is an excellent choice for all kinds of people. People can adapt easily to a life that balances productivity and leisure, with the beach and the countryside being an easily accessible retreat from the busy virtual world.
There are several types of residence visas, from the most general to the most specific. This short article will outline the residence visas that are tailored towards digital nomads.
The most requested type of visa is one commonly known as the passive income residence visa. To be granted this visa, one must prove that they have a source of income sufficient enough to live in Portugal. Other requirements that must be met include proof of accommodation, a clean criminal record, and travel insurance.
As an alternative to the aforementioned, digital nomads can apply for an independent professional residence visa. In this case, applicants must register as freelancers before the Portuguese tax authorities, have a registered service agreement, and be qualified to work independently as authorised by law.
Interested digital nomads may apply at the Portuguese consular office in their country or city of residence. After the residence visa is issued, the applicant will have an appointment with Immigration and Borders Authority to apply for the residence permit. When the residence permit card is granted, it will be valid for 2 years and can be renewed for successive periods of 3 years. After five years of residence in Portugal, the citizen may request a permanent residence permit or Portuguese citizenship. As soon as the first residence permit card is granted, the holder may work remotely in Portugal for a foreign company with a service agreement.
As a resident in Portugal, the digital nomad can benefit from a favorable tax regime known as the Non-Habitual Resident (NHR) Regime. The NHR Regime is valid for ten years and allows the taxpayer to benefit from a special reduced tax rate of only 20% on income derived from high value-added activities. This tax regime might also allow remote workers and digital nomads to benefit from a tax exemption on foreing passive income, depending on the type of income and where the income is generated.
Portugal is an attractive choice for digital nomads looking to relocate due to its natural, cultural, and social conditions, among a plethora of other advantages.
Immigration lawyers make relocation easy!
At Lexidy, we can help you to explore your options for relocation to both Spain and Portugal; from helping you to considering the differences between the two countries to reviewing the tax implications that either country would require. Contact the Lexidy team, today – we will be glad to assist you in making your relocation simpler.
Since there are over 20 different Digital Nomad Visas around the world with different requirements and tax implications, and running a business from abroad may require more complex cross-border issues, you may want to speak with an international tax consultant, like the ones at Wanderers Wealth, to learn about the different options available. International consulting firms like this one can help you take control over your finances and freedom of movement by leveraging global solutions.