Portugal and Spain Competing over Digital Nomads

In the battle for the elusive digital nomads, who will win, Spain or Portugal — and what will it mean?

Spain is likely to unveil a new digital nomad visa in January, following its approval by Spanish parliament in early November, according to Business Insider.

Portugal, meanwhile, already implemented its digital nomad visa on Oct. 30.

“Radim Rezek, CEO and co-founder of Flatio, a short-term housing platform popular among digital nomads in Europe, told Insider that Portugal is ‘much more developed’ in terms of attracting remote workers and tech entrepreneurs to its shores, something that Spain has sought to imitate,” Insider writes.

Who will win? It’s pretty unclear.

Digital nomads who want to get into Portugal must show that they earn four times the national minium wage. While there’s some debate what the visa officials expect, the minimum wage is €705, so digital nomads would need to show around €2,820 or more a month in earnings.

In Spain, on the other hand, the wage threshold is expected to be around €2,000, according to local reports.

But Spain presumably plans to tax digital nomads at a lower rate than self-employed and contract workers who already live and work in Spain, according to The Local. In fact, it’s expected that digital nomads earning below €600,000 will pay just 15% in tax for four years — lower even that the 25% typically paid under the non-residents tax regime — even if they live more than 183 days a year in Spain, The Local writes.

In Portugal, meanwhile, many digital nomads can expect to fall under a career category allowing them to pay a 20% tax under the non-habitual resident scheme, plus 10% in Social Security payments, according to UK-based firm Imperial & Legal. However, that lower rate — the Portuguese pay up to 48% — is available for the first 10 years.

Another consideration for at least some of the digital nomads: While it typically takes 10 years of residency to apply for citizenship in Spain, in only takes five in Portugal.

Will it come down to the beaches? The food? The language? Maybe, gasp, the people who are already here? Who knows!

The question also remains (for some?) how much an influx of lower-taxed and higher-earning digital nomads will affect the people already living and working in Portugal and Spain — and struggling with rent and inflation on food prices as it is.


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