Does the Non-Lucrative Visa Open Up Spain to Non-EU Digital Nomads?

Welcome back to ESL Gypsy- coming to you today from just outside the Spanish border with Portugal. My decision to settle in Portugal was an awesome, but by no means easy, one. Portugal is a terrific country, but by all accounts, Spain is a great country in its own right. The food, wine, climate, people, and the lifestyle are all tough to beat. In the past, places like Barcelona, Tenerife, and Cadiz have been tough places to settle for non-EU residents due to visa restrictions. Spain’s Non-Lucrative Visa may change all that. This week, I’m going to share some of the information I found while researching available visa options for Spain. As always, this post is informational. If you’re serious about making Spain your home, seek out the advice of an attorney who can advise you on both immigration and tax issues.

The non-lucrative visa makes Spain an appealing option for those with enough income to support themselves.

What is the Non-Lucrative Visa?

 The Non-Lucrative Visa allows non-EU citizens to live in Spain for a period of one year and is renewable (given sufficient economic means) for up to five years. After five years, you are allowed to apply for permanent residency. By ‘non-lucrative,’ this means you have sufficient economic means to support yourself for a period of one year in Spain and will not undertake employment in Spain for a Spanish company or start your own business there. In the past, this visa has generally been popular with retirees who have pension income or those who are especially wealthy. The digital economy is changing that. Now the income requirements can be satisfied with income earned from work conducted in other countries. While Spain is affordable in comparison to the US, you will need to show more than a few hundred dollars a month going into your PayPal account.

Income Requirements

You need to show sufficient economic means to support yourself (roughly 30,000€ per year). If you wish to renew your visa, you need to show that you continue to have the funds necessary to support yourself while living in Spain (as you will NOT be able to obtain work for a Spanish employer). Some of the information online that was provided by previous applicants indicated that immigration officials were less concerned with the amount of monthly income from location-independent employment and more concerned with the amount of cash you have in the bank. Given this understandable preference for applicants to show available funds, this visa may work best for those who have the yearly funds stashed in savings. This will prevent you from having to even broach the subject of your earnings as a digital nomad. Simply use your earnings to replenish (or hopefully add to) your savings each month and you’ll be in a good position to reapply.

While the peninsula is beautiful, Spain offers some amazing islands, too!

Insurance Requirements

For those of us coming from America, the thought of having affordable, accessible, state-run healthcare may sound like a dream come true. If you enter Spain on a non-lucrative visa, that dream will have to wait. As a temporary resident on a non-lucrative visa, you DO NOT have access to the Spanish healthcare system. As a result, you will need to take out private insurance that provides a level of coverage equivalent to what Spanish residents receive under their national healthcare system. I have a friend who currently has private healthcare in Spain, and she pays approximately 100€ per month. This insurance is mandatory at the time you apply for the visa and must remain in effect throughout your time in Spain.

A teacher’s salary might not be able to support you in Ibiza…

Other Notes

Like many other countries, Spain requires that you have a clear criminal record to apply. You also need a recent doctor’s statement indicating that you are free from any communicable diseases. The visa takes anywhere from 30-90 days to process, and the requirements outlined by the Spanish Consulate in New York are listed here. While you are allowed visa free travel within the Schengen Zone on the non-lucrative visa, you do need to remain within Spain for a period of 183 days.

Tax Benefits

NOTE: This is informational. Consult with an attorney or accountant in the USA and/or Spain. Since, you are not permitted to work for a Spanish employer or access Spanish social services (such as healthcare), you are not responsible for paying tax in Spain. If you are American, you may apply for the Foreign Earned Income Exclusion on your federal tax return (Form 2555). Part II (bona fide residence test) will ask you if you are required to pay income tax in the country you are claiming bona fide residence. The answer would be “NO.” This may not exclude you but bear in mind that the FEIE is not something Americans are all automatically entitled to. You need to apply when you file your federal return. Part III, the physical presence test, should make qualifying much easier- thereby excluding your income from the USA. Just remember that even if your income is excluded for US income tax purposes, you would still be responsible for paying self-employment tax in the USA.

Salamanca is a beautiful university town a few short hours from Madrid.

Final Thoughts

Spain is a dream for so many travelers and location-independent workers. For those who have a bit of coin in the bank or sufficient monthly income from working as a digital nomad, the non-lucrative visa may be an option for opening up residence in Spain. The income requirements, while certainly not outrageous, may present a challenge for those digital nomads who are just getting by. For people who lack the financial means to apply for a non-lucrative visa, the autonomo visa may be an option. Stay tuned for future blogs where we’ll explore the possibility of entering Spain as a self-employed owner of a Spanish company.