Coronavirus has brought with it a new lifestyle that includes the possibility of working from home and even from other countries in the world, demonstrating that presence, in many sectors, is not necessary at all.

Faced with this new reality, the Spanish government –like many governments of the different neighbour countries– has had to take measures to regulate telework; but, above all, it has taken advantage of the situation and exploit one of the main potentials of our country: good weather and landscape diversity, which are some of the attractions for tourists from all over the world.

Adding the fact that one of the main challenges Spain has been facing for some years now is the exodus to cities, the current situation offers us a magnificent opportunity to combat the depopulation of rural areas.

It is an evidence that villages are more sustainable, relaxing and economical than big cities, which are more stressful and are linked to mobility difficulties, high levels of pollution or high price of housing. According to recent surveys rural environment increases people’s productivity, so even if villages do not have the facilities a city enjoys –mainly a stable internet and mobile connection– this fact might be a good attractive not only for young Spanish workers to move to small villages, but also for foreign families and investors, as long as it is linked to the implementation of real measures to face internet problems.

We can speak of “digital nomads” to refer people who do not have a fixed place of work in the world and who work or are willing to work remotely.

Thinking of promoting Spain as the desired destination for this type of people, at the end of last year 2021 a new draft bill has been approved for the promotion of the ecosystem of emerging companies –startups–, which aims to attract talent to our country by granting tax benefits for foreign investors who set up new companies in Spain in a more agile way, with less bureaucracy and with more subsidies from the state. Likewise, a new category of stay visa and residence permit will be introduced for teleworking, which will also allow family regrouping, in order to regularize the situation of foreigners.

As regards the main changes to be introduced in the future “startups law” we might highlight the following:

  1. Aimed at “startups”. This denomination not only includes newly created companies with registered office or permanent establishment in Spain, but also those that are less than 5 years old (or 7 for technology-based companies and other strategic sectors with proprietary technology designed entirely in our country).
  1. Improvement in the formal aspects of company incorporation and reduction of registration timings:
  • The incorporation will be processed entirely telematically by means of a single electronic document.
  • The company may be registered within 5 working days from the day following the date of the filing entry in the Commercial Registry. All this without notary and registry fees.
  • During the first 3 years, startups will be excluded from the requirements relating to the equity rebalancing required to avoid the causes of dissolution provided for in the Capital Companies Act.
  1. Reduction of bureaucratic requirements for non-residents:
  • The passport will be allowed as a valid identification document during the first 6 months of stay, without it being necessary to obtain a foreigner identification number (NIE) for this purpose. It will be sufficient to acquire a tax identification number (NIF) telematically for the incorporation of the company.
  • The equivalence of foreign documents (powers of attorney and other notarial documents) will be favored: it will not be required to adapt their content to the Spanish legal system.
  1. Tax benefits: 
  • Decrease in the number of tax periods prior to moving to Spanish territory during which the taxpayer cannot have been a tax resident in Spain in order to take advantage of the special tax legislation for foreigners (the “Beckham law”): from 10 to 5 years. 
  • Reduction of the Non-Resident Income Tax (IRNR) and Corporate Income Tax (IS) at the rate of 15% for a maximum period of 4 years.
  • Possibility of deferral of the IRNR and IS tax debt for a maximum period of 12 months and elimination of its fractioned payments during the 2 years following the year in which a positive taxable income has been obtained.
  • The deduction for investment in new or recently created companies is increased from 30% to 50% and the maximum base is increased from 60,000 to 100,000 €.
  • Exemption of up to 50,000 €/year of stock options (remuneration by means of delivery of shares or stockholdings) and delay of their taxation at the time they become liquid, either by sale of shares or by the company’s IPO.
  • Flexibility in the generation of treasury stock in limited liability companies (LLC) and improvement in the taxation of the acquisition of own shares and holdings.

On the other hand, the new category of visa for international teleworkers will be granted to those workers and professionals who work exclusively telematically for companies located abroad the Spanish territory and who meet certain requirements.

It will be a visa initially valid for 1 year while a person is self-employed working in Spain or for employers anywhere in the world. It may be renewed by applying for a residence authorization for a maximum period of 3 years, renewable for another 2 years. In this way, foreigners holding such permit may obtain permanent residence after 5 years in Spain.

It will also allow family regrouping in order to encourage workers posted to Spain to come with their families.

In conclusion, this new way of life that has come hand in hand with the coronavirus seems to allow Spain, once and for all, to modernize and digitalize. Thus it may open up the doors to the rest of the world to attract investment and reactivate the economy so damaged by the virus that has hit us in recent years.

Ana Fernández Ballesteros

Lawyer