Legend has it that in Spain there are ‘digital nomads’ who can work from here for foreign companies from outside the European Union. But this legend does not explain what employment legislation is applicable and what social security system covers them. We will see below that there is no regulatory answer to these doubts because Spain has only regulated a visa and a residence permit.
In every legend there is a mythical component that takes root to the point that we are not able to discern whether it was true or not. And sometimes, as in the case of ‘digital nomads’, the world of legends and the legal world are intertwined.
In Spain, the legend was forged after the publication of Law 28/2022, of December 21, on the promotion of the start-up ecosystem. The preamble pointed out the importance of “the creation of ecosystems favorable to the establishment of entrepreneurs or remote workers, known as «digital nomads»” and its fifth final provision introduced in Law 14/2013, of September 27, to support entrepreneurs and their internationalization, new visa and residence authorization for ‘teleworkers of international nature’ (i.e., the ‘digital nomads’). The ‘digital nomad’ was baptized by this law as “the national of a third country, authorized to stay in Spain to perform a work or professional activity remotely for companies located outside the national territory, through the exclusive use of computer, telematic and telecommunication means and systems”.
The PRIE Portal (portal hosted on the website of the Ministry of Economy, Trade and Enterprise on the residency program for investors and entrepreneurs) included a section for ‘digital nomads’ explaining the concept and requirements for obtaining the corresponding visa and residency authorization.
From the very definition of the ‘digital nomad’, doubts begin to arise: what is a ‘digital nomad’ or ‘international teleworker’ really from an employment law point of view?, are they sent by their foreign company, from outside the European Union, to come to work in Spain?, does the concept exist in the Spanish employment legislation?, what employment rights do they have?
Unfortunately, neither the ‘digital nomad’ nor the ‘international teleworker’ mentioned in the aforementioned law are regulated in the Spanish employment legislation. Therefore, the ‘digital nomad’ will see resolved the obtaining of the permission to work remotely from Spain, but the foreign company from outside the European Union that employs them will face doubts without express answer by the Spanish legislation about how to hire them or what social security system will be applicable —for this last doubt there is only express regulation for the habitual cross-border teleworker within the European Union, which is a different case to the one analyzed in this post—.
A ‘digital nomad’ does not have to be a ‘temporarily seconded’ or ‘expatriate’ in the terms usually understood in the jargon of international mobility, because by the definition in the immigration field it is not an employee who is sent, temporarily, to Spain by their foreign employer from outside the European Union to provide services here. Therefore, the few rules on international mobility do not necessarily apply. This nomad may simply be a person who, being able to work entirely remotely, decides to do so for their foreign employer from Spain and the latter authorizes them. In fact, to obtain the corresponding residence and work authorization, it is essential to prove that the activity of the ‘digital nomad’ has been real and continuous for at least one year in the company with which they have an employment relationship and that they can carry out their activity remotely.
If the ‘digital nomad’ is not an ‘international assignee’, and is simply the person who decides, of their own free will, to move to Spain to continue providing services to their foreign employer because for this it is irrelevant where they provide them from, should they sign a new employment contract subject to Spanish law? The answer may depend on how long the person will remain in Spain and whether a connection with the country of origin can be proven to justify the choice of the law of that country.
And where will this ‘digital nomad’, who is not an international assignee, pay social security contributions? The answer should be the Spanish Social Security, by application of the lex loci laboris principle (application of the rule of the place where the work is performed), which will require that their foreign employer must register with the Social Security in Spain. This, in fact, is explained on the website of the Large Companies and Strategic Collectives Unit of the Ministry of Inclusion, Social Security and Migration in the FAQ section on the application for the residence permit for international teleworkers. This unit, however, mentions the possibility that the requirement of registration with the Spanish Social Security may be replaced by a certificate of coverage issued by the corresponding authority in the country of origin of the ‘digital nomad’ that, under the corresponding bilateral agreement signed between Spain and that country, proves that they continue to contribute there. The unit stresses, however, that few countries with such an agreement ‘issue a certificate of coverage for ‘digital nomads’. In fact, the bilateral agreements usually only cover the traditional international assignee, who is not a ‘digital nomad’, as has been explained, and have not yet incorporated, as is the case in the European Union, international teleworking.
In short, providing remote services in Spain for a company based outside our country and the European Union cannot lead us to think that the ‘digital nomad’ can live outside the Spanish legal framework.
Considering the above, in the transition from myth to logos, it is worth asking whether everything is simpler, and a ‘digital nomad’ who decided at some point to settle in Spain to develop, who knows if sine die, their professional activity remotely from our country is nothing more than a foreign employee localized in Spain. Although they may indeed have a specific visa or residence authorization, for the purposes of the minimum rights content of their contract and of Social Security, they are undoubtedly a local employee.
