Many digital nomads come to us for advice on the best way to work legally in Spain under the Digital Nomad Visa. There are two primary routes you can take: registering as an autónomo (self-employed) or remaining employed by a foreign company. Both options offer distinct advantages and responsibilities, depending on how you structure your work. Here, I’ll explain the key differences, benefits, and challenges of both options, as well as the process of obtaining a TIE (Tarjeta de Identidad de Extranjero) card.
What is an Autónomo in Spain?
An autónomo is essentially a self-employed individual or freelancer in Spain. If you choose to register as an autónomo, you will operate independently, working for one or more clients, and will be responsible for handling your own taxes, social security contributions, and business expenses. For many digital nomads, this option offers flexibility and the potential to maximise income by managing multiple projects from around the world.
Benefits of Becoming an Autónomo
- Flexibility: You have full control over your working hours and the projects you take on. Many digital nomads appreciate this independence, especially if they juggle multiple clients or projects.
- Tax Deductions: You can deduct a wide range of business expenses from your taxable income, including office supplies, travel expenses, and even a portion of your rent if you use your home as an office.
- Global Clientele: If your clients are based outside of Spain, you may not need to charge VAT (known as IVA in Spain) on your invoices, which can make your services more competitive on a global scale.
Challenges of Being an Autónomo
- Social Security Contributions: All autónomos in Spain must pay monthly social security contributions. These start at approximately €230 per month for those earning below €670, but can rise to over €500 per month depending on your income level. This contribution covers your access to Spain’s public healthcare system and future pension.
- Complex Tax Filings: Autónomos are responsible for quarterly tax filings and an annual tax return. The paperwork can be overwhelming, so many hire a gestor (tax advisor) to ensure compliance, which can add to your business costs.
Staying Employed by a Foreign Company
Alternatively, if you already work for a foreign company, you may choose to continue your employment under the Digital Nomad Visa. This option simplifies the process as your employer handles your taxes and social security contributions. Many digital nomads working for foreign companies find this route convenient, especially if they are on a fixed salary.
Benefits of Remaining Employed
- Simplified Taxation: As an employee, your company handles most of the tax and social security obligations. This can be a relief for those who prefer not to deal with Spain’s bureaucracy. You will also benefit from Spain’s non-resident income tax regime, which allows you to pay a flat tax rate of 24% on income up to €600,000 for up to six years, provided you meet the criteria.
- Employment Benefits: You retain the benefits that come with employment, such as paid holidays, health insurance, and job security. This can make it easier to balance work and life while living in Spain.
Challenges of Being Employed
- Less Flexibility: If you remain employed by a company, you are limited to working for that company, and you may have less control over your work schedule or location flexibility. Additionally, the digital nomad visa allows for only up to 20% of your income to come from Spanish sources, so you will need to ensure that the majority of your work remains with your foreign employer.
How to Choose Between Autónomo and Employed Status
When deciding whether to register as an autónomo or remain employed by a foreign company, it’s important to consider your work structure and long-term plans.
- Choose Autónomo if you work with multiple clients or projects and want the flexibility to run your own business. This option offers greater autonomy but comes with the responsibility of managing your own taxes and social security.
- Choose Employed Status if you have a stable job with a foreign company and prefer a simpler tax process. Remaining employed allows you to enjoy the benefits of salaried work while living in Spain.
Obtaining a TIE Card
Once your Digital Nomad Visa is approved, the next crucial step is obtaining your TIE (Tarjeta de Identidad de Extranjero) card, which serves as your residence permit and identification in Spain.
Steps to Obtain a TIE Card:
- Visit the Police Station: After your visa approval, you must visit a police station within 30 days of arriving in Spain. Here, you will provide your fingerprints and necessary documents to apply for the TIE.
- Required Documents:
- Passport
- Visa approval letter
- Proof of address in Spain
- Health insurance documentation
- Completed application form
- Pick Up Your TIE: After your appointment, you’ll be given a date to return and collect your TIE card. This process typically takes around four weeks.
Both registering as an autónomo and remaining employed under the Digital Nomad Visa offer great opportunities for remote workers living in Spain. The right choice depends on your work structure, whether you prefer the flexibility of freelancing or the stability of employment. Whichever route you choose, obtaining the TIE card will be essential to formalising your residency in Spain and enjoying the country’s rich culture and relaxed lifestyle while working remotely.
We recommend weighing the benefits of each option carefully and ensuring that you comply with Spain’s tax and legal requirements. With the right planning, your move to Spain can be both productive and fulfilling.
