The U.S. hinders digital nomad visa application in Spain

United States hinders the application for the digital nomad visa in Spain, expert lawyers of CECA MAGÁN Abogados
14 Feb 2024

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The U.S. Social Security Administration refuses to issue the a certificate of coverage, forcing Spain to reject the digital nomad visa to applicants employees of U.S. companies willing to telework from our country. This Agency claims that the Totalization Agreement does not specifically cover digital nomads, but only temporary international assignments.

Spain and the United States have a Bilateral Agreement on Social Security in force, also called Totalization Agreement, that seeks to avoid double contribution and, therefore, to add the periods contributed to the Social Security in both countries, excluding concurrent contributions. However, the United States interprets that this Agreement does not apply to employees applying for digital nomad visa and wish to work from Spain, but only to those temporarily posted in the Iberian country.

This is not the experience with other  non-EU countries signatories of Totalization Agreements. The Social Security agencies from these other countries, as is the case with Colombia and Mexico, are issuing the required certificate stating that the employee maintains legal coverage in the country of origin for the time allowed in the Agreement, thus favouring the employee to comply with the Spanish requirement and, therefore, the possibility of a positive result in obtaining this permit.

1. First things first: What is the digital nomad visa and what is it for?

The digital nomad visa or residence visa for teleworking is an authorization for non-Spanish, non-EU citizens who wish to carry out a remote work or professional activity from Spain for companies located outside Spain, through the exclusive use of computer, telematic or telecommunication means.

Holders of this visa are allowed to work from any location in Spain, as long as they do not work for Spanish companies or clients. The foreigner who performs an activity as an employee may only work for companies located outside Spain.

A foreigner who is self-employed (as a freelancer) may also work for companies located in Spain, as long as the percentage of such work does not exceed 20% of their total activity.

A requirement to obtain this visa is having a graduate or postgraduate degree issued by universities of recognized prestige, professional training centers or business schools, or to prove a minimum professional experience of three years.

The following family members of the teleworker may also obtain the visa:

  • The spouse or civil partner.
  • Minor children and children of age who are financially dependent on the teleworker and who do not themselves constitute a family unit.
  • Ascendants who are dependent on the teleworker.

Obtaining the digital nomad visa also requires the submission of several documents, amongst which a Certificate of Coverage is essential. This certificate functions as a responsible declaration containing the commitment, prior starting the work or professional activity,  to comply with Social Security obligations in the issuing country. 

This commitment must include the payment of contributions and the guarantee that the employee will be duly covered by social security benefits during the period in which the employee is working for a foreign company from a location in Spain.

2. Why does the United States hinders the application for the digital nomad visa for Spain?

Despite the Totalization Agreement between Spain and the United States, the latter is denying the issuance of the Certificate of Coverage, which makes it impossible for American employees applying for the digital nomad visa to live in Spain while teleworking for a company in the United States.

The United States interprets that the Totalization Agreement is only applicable to employees hired by U.S. companies in a temporary international assignment to  Spain. Under this modality, the employee does maintain the contract and the Social Security coverage at source during the periods indicated in the aforementioned Agreement, but as an intra-company transfer.

Since the Social Security certificate is mandatory to obtain the digital nomad visa, these employees face obstacles to reside in Spain while working for US companies, as the only solution involves US companies complying with the Social Security obligations in both countries. This is a significant barrier for American employees looking to take advantage of the flexibility of remote working and living in Spain.

3. New Social Security Agreement between Spain and the USA

The U.S. Social Security Administration "deflates" the Spanish Government's plan to attract digital nomads to Spain from this country by offering additional tax benefits related to the famous "Beckham Law". As stated before, compliance with the Social Security requirement is posing a serious problem. In an attempt to help U.S. employees in their relocation to Spain under the digital nomad visa,  the Spanish Minister of Inclusion, Social Security and Migration has announced the signing of a new Social Security Agreement between Spain and the United States seeking to promote international labour mobility and the transit of insured employees between both countries.

Absent an official publication, the Minister has announced that the main changes will affect calculation of Spanish pensions. 

Likewise, it is expected that this new agreement broadens the scope of application of the Totalization Agreement to expressly include international teleworkers, which would facilitate the regularization process of this category and expand the possibilities of application of visas for digital nomads in Spain.

Almudena Medina y Patricia Ruiz

Partner of Tax Department and International Mobility Expert

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