If you’re employed by a company outside of Spain and are considering relocating there, understanding your visa and tax options is crucial. Unless your employer is based in the UK, Russia, or certain EU countries with social security agreements with Spain, your options may be limited. Here’s a breakdown of the different pathways available to you.
1. Intercompany Transfer Visa
- If your company has a branch or entity in Spain, you may be eligible for an intercompany transfer visa. This allows you to stay employed while working in Spain without needing to switch to a contractor role. This visa is suitable if your employer is willing to facilitate your move through their Spanish entity.
2. Highly Skilled Professional Visa
- Similar to the intercompany transfer visa, the highly skilled professional visa is available if your company has an established presence in Spain or is willing to hire you through an Employer of Record (EOR) in Spain. EOR services, such as those offered by companies like Remote.com, handle the employment logistics, including payroll and visa processing.
3. Digital Nomad Visa
- The Digital Nomad Visa (DNV) is another option for employees who wish to work remotely from Spain. However, there are specific requirements:
- You must be from a country with a social security agreement with Spain (e.g., UK, Russia, or some EU countries), allowing you to import your social security contributions.
- Alternatively, your company must set up a representative office in Spain (without a physical presence) and pay social security contributions on your behalf.
- If your company is unwilling to take these steps, the only viable option might be to switch to a contractor role.
4. Switching to a Contractor Role
- Transitioning from an employee to a contractor role is a common solution for employees who want to relocate to Spain but face limitations with their current employer. If you choose this route, you must be able to show that you have been receiving payments as a contractor for at least three (3) months before applying for the residence authorization.
- This shift can also help avoid the complexities associated with social security obligations for foreign companies, as you’ll be responsible for managing your own contributions as a self-employed individual.
- This will also allow you to directly apply for the Digital Nomad Visa (DNV) without worrying about any issues with social security as you will be responsible for your own tax payments.
- For many Americans who are W-2 employees, switching to a contractor role is the most straightforward and popular way to meet the Spain digital nomad visa requirements.
5. Tax Obligations
- Employees: If you remain an employee, you’ll typically only need to file an annual tax return in Spain. Employees may also be eligible for the 24% fixed tax rate under the Beckham Law, which can be advantageous for higher earners.
- Contractors: If you switch to a contractor role, your tax obligations will change. You’ll need to file quarterly tax returns and manage your own tax payments. The tax rate for contractors is progressive, but for those earning below €50,000 annually, the rates can actually be more favorable compared to the fixed rate of 24%.You can use this calculator to calculate how much you will owe in taxes: https://autonomoinfo.com/.
6. Next Steps
- Before making any decisions, it’s essential to discuss your situation with your company and seek advice from legal or tax professionals. Depending on the size and structure of your company, as well as your role, different visa options may be available. Understanding the implications for both you and your employer is key to making an informed decision.
If you’re unsure about the best route to take, feel free to reach out for expert guidance or book a consultation with us. Ensuring a smooth transition to working in Spain is possible with the right information and support.
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