Spain: The Startups Law regulates international remote working for foreign digital nomads

Law 28/2022, of December 21, 2022 promoting the startup ecosystem, known as the Startups Law, was published on December 22, 2022 in the Official State Gazette. The aim of the law is to establish a specific regulatory framework to support the creation and growth of startups in Spain, intended to encourage the relocation of these companies to Spain, attracting talent and international talent, and to stimulate public and private investment, among other objectives.

In this context, the law amends several mechanisms regarding foreign investment and work in Spain. Particularly notable are the rules on residency due to international remote working of the nationals of third countries who are authorized to remain in Spain to carry out remote professional or labor activities for companies located outside Spain, through the exclusive use of computer, electronic and telecommunications equipment and systems. In the case of pursuit of labor activities, it is only possible to work for companies located outside Spain. With the pursuit of professional activities, work may be provided for a company located in Spain, given that the percentage of time worked is not more than 20% of the total professional activity.

Requirements are also established to obtain visas (for foreigners who intend to live in Spain to work remotely for a company that is not located in Spain, for a maximum period of one year) and residency authorizations (for foreigners who reside in Spain on a regular basis or who have entered Spain on a visa and want to live and work remotely for a company located abroad, for a maximum period of three years, extendable for two-year periods, provided that the conditions established are met).

The law also regulates tax aspects which are summarized in this Tax Department Commentary.