How to telework in Spain from the US: A legal and tax guide for American citizens
Are you a US citizen and would like to work remotely from Spain?
International teleworking is a reality that seemed impossible just a few decades ago.
However, immigration law in Spain has evolved as a result of changing society's needs, eventually adapting a type of residence permit to a new foreign regime: digital nomads.
More and more professionals are looking to combine their American careers with the unique Spanish lifestyle.
However, before packing your bags, it's essential to understand the legal and tax aspects of working remotely as a foreigner in Spain.
In this article We will discuss step by step the essential factors for being able to come to Spain to telework from the United States., from the requirements, procedures and essential aspects to carry out an effective and agile process.
Who can be a digital nomad?
The status of international teleworker is included in Spain in the Law 14/2013, of September 27, supporting entrepreneurs and their internationalization, also known as the Entrepreneurs Law.
It is in its article 74 bis where it is recognized as an international teleworker to “any national of a third country, authorized to remain in Spain to carry out a remote work or professional activity for companies located outside the national territory, through the exclusive use of computer, telematic and telecommunication means and systems".
That is, any teleworker who works from Spain for a company located in the United States and who performs their work remotely and exclusively through electronic means.
This definition limits the possibility of working for a Spanish company.
However, the status also recognizes the possibility of working independently.
In this case, the teleworker who carries out a professional activity (self-employed, autonomous or freelance) will be allowed to provide services to Spanish companies, provided that the work carried out for clients or companies located in Spain does not represent more than 20% of their total annual professional activity, and that their main clients are foreigners..
Otherwise, another type of residence permit would be required.
How to apply for a permit from the US or Spain
Digital nomad residency in Spain is a type of permit that offers two different application options: the visa and authorization.
This question is fundamental, since The visa allows you to start the process from the United States, while the authorization offers a procedure that can be carried out in Spanish territory.
Although their duration and procedures vary, authorization is an essential step that must be requested once the visa has been obtained.
On one hand, the visa It is a mandatory procedure in cases where the applicant is outside of Spain.
It must be requested from Spanish diplomatic and consular offices in the United States and is valid for one year.
As additional information, Spain's institutional presence in the United States includes an extensive network of consulates.: Boston, Chicago, Houston, Los Angeles, Miami, New York, San Francisco, San Juan (Puerto Rico) and Washington DC, where the Embassy is also located.
These consular offices will offer legal and administrative assistance valid in Spain depending on your state of residence within the United States.
Once the one-year validity period has elapsed, it will be necessary to request the authorization of residence as an international teleworker.
This authorization is a procedure designed to be completed from Spain, either once a visa has been obtained or while staying.
In this case, the procedure is initiated online from the website of the Large Companies and Strategic Groups Unit (UGE-CE).
La CGU-CE It handles the processing of residence permits provided for in Law 14/2013, which facilitates entry and residence in Spain for reasons of economic interest.
Regarding the procedure, it varies depending on each permit.
To request authorization, the person entitled to initiate the procedure may be the owner or a representative.
The resolution period is 20 working days since its presentation, applying a positive administrative silence.
Which facilitates the agility of the process.
Once approved, The foreigner's situation must be formalized by requesting the Foreigner's Identity Card and the Foreigner's Identity Number at the Immigration Office of the town where you will reside.
In the case of visa, the legitimate subject (interested party or representative) You must make an appointment at the Spanish consulate located in your consular district.r.
The resolution period will be 10 days from the submission of the application.
In this case, the administrative silence clause will also apply, and the visa must be collected by the interested party without an appointment within one month.
Once collected, the visa holder will have up to 90 days to enter Spanish territory.
Requirements for a digital nomad visa in Spain
Once the existing types of permits and their respective procedures are clear, it is necessary to understand the general and specific requirements for this residency so that the processes can be carried out effectively.
As general requirements, the Entrepreneurs Law provides:
- Not being irregularly in Spanish territory.
- Be over 18 years old.
- You must have no criminal record in Spain or in any other country where you have resided during the last two years, for offenses established by Spanish law. You must also provide a sworn declaration stating that you have no criminal record in the last five years.
- Not appear as rejectable in the territorial space of countries with which Spain has signed an agreement in this regard.
- Have public insurance or private health insurance arranged with an insurance entity authorized to operate in Spain.
- Have sufficient financial resources for yourself and your family members during your period of residence in Spain.
- Pay the fee for processing the authorization or visa.
As a prerequisite, to be an international teleworker it is necessary to prove that you are a qualified graduate professional or postgraduate from a prestigious university, training and prestigious business schools or have one minimum professional experience of three years.
In compliance with this aspect, the specific requirements for a residence permit as a digital nomad must be accredited:
- The existence of real and continuous activity by the company with which the applicant contracts.
- Documentation certifying that said employment or professional relationship can be carried out remotely.
- Documentation demonstrating that the employment or professional relationship between the applicant and the employee has existed for at least three months prior to the application, as well as documents proving the terms and conditions of the remote activity.
- Minimum financial resources for themselves and their family members (Income requirements for the digital nomad visa in Spain). Specifically, minimum financial resources are defined as an amount equal to 200% of the minimum interprofessional wage (SMI) per month.
The most common mistake: social security.
Despite being a worker hired by a US company, any foreigner who teleworks from Spain will be performing work within Spanish territory, but maintaining an employment relationship with a foreign entity.
This generates two essential conditions: the link with Spanish Social Security and the Tax Residence of the teleworker.
Why might they pose problems for Americans?
Regarding Social Security, Law 1/2013 does not exempt the obligation to be affiliated with the national Social Security system.
This poses a real obstacle for teleworkers who are employed.
Since, the prerequisite of this permit is that The employing company must be foreign, so it does not have to be affiliated with the Spanish Social Security System.
This obstacle was anticipated and attempted to be resolved through a procedure: registration of the company in the national Social Security System.
However, this process could involve exhaustive administrative and bureaucratic processes, possibly resulting in increased economic costs for the company.
For this reason, it is often a procedure avoided by employers and is left to the worker's own responsibility.
This is a clear difference between the status of a teleworker (mobility is largely determined by the employee) and an expatriate worker (in addition to the use of other work methods beyond telematics, mobility is the responsibility of the company).
The problem of double contribution
Such a procedure would raise a problem of double quote: both in the country of origin (United States, where the company is located) and in the destination country (Spain, where the work is done).
In light of this, the US recognizes the so-called "Totalization Agreements"The Bilateral Agreements on Social Security.
This agreement, signed with Spain in 1986, meets the objectives of avoiding double taxation by preventing duplication of costs and, at the same time, covers potential gaps in coverage due to international labor mobility, providing a beneficial system for American workers who wish to pursue their careers between the two states.
Therefore, Article 5 of the document exempts every worker from paying Spanish social security contributions, provided they are covered by the American system.
The validation of taxation is justified by the “Coverage Certificates” or Certificates of Coverage (Article 3 of the Convention) which must be requested from the United States Social Security Institution: Social security administration (SSA).
The Certificate must be requested through the USA/E Form 1 (for employees) or by contacting the Social Security Institute of the province of residence in Spain (for freelance workers).
In the first case, the form must usually be requested by the employer in person, online, or by fax.
Where is the difficulty?
In practice, the difficulty lies in the lack of explicit recognition of the status of "international teleworker" in the Convention signed in 1986.
That is, the Agreement was initially intended exclusively for expatriate teleworkers, those who are temporarily and intentionally relocated to Spain to perform intra-company work.
What sometimes prevents the issuance of these certificates, since the intervention of the employer is required, as well as notification of the return date or work branch located in Spain.
In order to guarantee the right of digital nomads to choose their place of residence, the United States and Spain They signed a new Social Security Agreement in 2024 which introduces improvements in the social protection of workers who spend part of their working life in both countries.
However, the new version has not yet been ratified, so until then the original Convention remains in effect.
Tax residency procedure
Regarding the second condition of Tax Residence, More than an obstacle, it is a procedure that must be initiated after the worker's formalization in Spain.
Pursuant to Spanish law, when carrying out a lucrative activity in Spain, A tax resident is considered to be any person who remains within Spanish territory for more than 183 days. in a calendar year, or who has the center of their economic interests or main activity in Spain, regardless of the number of days they reside.
This would involve reviewing the Agreement between the Kingdom of Spain and the United States of America to avoid double taxation and prevent tax evasion with respect to income taxes, made in Madrid the February 22 1990.
This Agreement establishes in its Article 16 in a practical way that any US citizen who works remotely from Spain for a US company and resides in Spain for a period exceeding 183 days, You will have to pay taxes in Spain on the salaries you receive, even if the employer is located in the United States..
The role of the IRNR
It is worth mentioning that the visa offers a advantage its applicants, since instead of managing taxation through the standard income tax (Personal Income Tax), it is subject to the Tax on the Non-Resident Income (IRNR), which is a lower percentage than the number of workers registered in Spain.
Conclusion
In conclusion, until the ratification of the new Bilateral Agreement Social Security between the United States and Spain, the digital nomad visa presents a clear obstacle.
El The membership requirement is an obligation that limits the legal and administrative progress of international teleworking.
While it is true that the protection of social security systems guarantees the labor rights of each worker, to avoid double taxation, the employer's cooperation in processing Coverage Certificates is essential.
Furthermore, before applying for a digital nomad permit, it is essential to review the legal and tax requirements.
If the stay in Spain exceeds 183 days, the permit holder must adjust their tax obligations in Spain, regardless of whether they regularize their residency status under Spanish immigration law.
The current collaboration between the two states reflects the need to reduce bureaucracy and administrative procedures for this permit, which reflects a reality that is increasingly present among American citizens.
RRYP Global, immigration lawyers in Spain.
