By Moustafa Daly
Spain has a Golden Visa program through which investors can get residency by buying property worth $500,000 or more. The program has recently witnessed an uptick in popularity, but remains on the expensive side, with competing programs in Europe costing half or less than that.
Over a year in the making, the Spanish parliament has recently approved the long-awaited Startup Act, which would come to the rescue of entrepreneurs and digital nomads seeking Spanish residency, with expectations that both visas will be officially available in January 2023 upon final approval by the Senate.
In the parliament, a clear majority of 177 MPs voted in favor of approving the act, against 75 abstentions and 88 rejections, according to local media reports, indicating the act is well en route to the Senate’s approval in January.
The law aims at attracting startups to the country’s booming startup ecosystem. It also aims at retaining local talent and attracting foreign talent to the market.
“The economic impact for Spain will be mainly in the enhancement of SMEs and their tax rates; these have always constituted an important part of our economy, explains Maria Luisa de Castro, director and founder at Costaluz Lawyers.
Is Spain going to become the new mecca for digital nomads?
The news are particularly relevant to digital nomads, with local media reports anticipating a slightly low minimum income requirement of €2000 for digital nomad visa applicants, almost 50% less than the similar scheme in neighboring Portugal.
Castro speculates the minimum income requirement for digital nomads may be as low as the Spanish minimum wage, at €1,000. “Therefore, a wide range of foreigners could be eligible for this visa,” she expects.
Successful applicants will also be subject to a reduced income tax of 15% for up to four years, as opposed to the current income tax for non-residents that stands at 24% - conditional upon earning €600,000 or less per year. Similarly, entrepreneurs and investors would benefit from a Corporation Tax reduction from 25% to 15% for up to four years.
However, digital nomads living in Spain can only get 20% of their income from companies located inside Spain, with at least 80% having to have been earned working for businesses in other countries.
The digital nomad visa is initially issued for a period of one year, but can be extended annually for up to five years. Thereafter, applicants can pursue permanent residencies in Spain.
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