Digital Nomad Visa Spain vs Portugal Showdown

Deciding on your next destination as a digital nomad? The digital nomad visa Spain vs Portugal decision hinges on several critical factors. From visa criteria to living costs, we compare the essentials to help you choose the locale that fits your nomadic lifestyle. Without jumping ahead, expect thorough insights into both programs to inform your decision.

Key Takeaways

• Spain and Portugal offer distinctive digital nomad visas with different eligibility requirements, income thresholds, and paths to residency, aimed at attracting remote workers from outside the EU and EEA.
• While both countries provide digital nomads with significant tax benefits and potential pathways to permanent residency and citizenship, Spain offers a reduced tax rate for the first four years, whereas Portugal’s NHR scheme can provide tax advantages for a decade.
• Cultural factors, living expenses, healthcare, and access to digital infrastructure are critical considerations when choosing between Spain and Portugal, with both countries offering a rich quality of life but having different cost of living and community dynamics.

Digital Nomad Visa Overview: Spain and Portugal

Spain and Portugal have both designed digital nomad visas that cater to the unique needs of remote workers. These programs are designed to attract skilled non-EU and EEA individuals, offering them a legal framework to live in these countries and work remotely for companies located abroad. The benefits of these visas include:

• The opportunity to soak in the beauty, culture, and lifestyle of Spain or Portugal while still maintaining your professional role
• The ability to live and work legally in these countries as a remote worker
• Access to the amenities and infrastructure that support remote work, such as coworking spaces and reliable internet connections

If you’re a digital nomad looking for a new base, Spain or Portugal could be the perfect destination for you.

The requirements and benefits associated with digital nomad visas differ between Spain and Portugal. The upcoming sections delve into these details.

Spain's Digital Nomad Visa

Spain rolled out its Spanish digital nomad visa as part of the StartUp Act, which began in January 2023. The primary goal is to attract international remote workers and help mitigate unemployment rates.

Applicants aiming for this visa must prove a minimum monthly income of €2,334, using bank statements, tax returns, or pay stubs from the previous three months as evidence. The visa is initially valid for up to 12 months with the option to extend for up to five years, providing a pathway to permanent residency.

Although comprehensive, the application process is straightforward for individuals working remotely for a foreign company. Applicants need to be outside the EU, EEA, and Schengen area, and they should have been working remotely for at least one year, with a relevant higher education degree or at least 3 years of work experience.

The necessary documentation includes an NIE (foreigner’s identity number), a national visa form, passport-size photo, valid passport, criminal record certificate, proof of local residency, and financial means, as well as proof of health insurance. Personal interviews may also be part of the process.

Portugal's Digital Nomad Visa

Contrastingly, Portugal’s Digital Nomad Visa comes in two forms: the Temporary Stay Visa and the Residency Visa. The Temporary Stay Visa is valid for up to one year and is renewable for up to four times. The Residency Visa is initially valid for four months, but upon arrival in Portugal, digital nomads can apply for a two-year residency permit. After the initial two-year period, the Residency Visa can be renewed for another three years.

To be eligible for this visa, applicants must demonstrate a total income from all sources of at least €3,040, which is above the Portuguese minimum wage. The application process involves verifying eligibility, preparing documentation, filling out a visa application form, and submitting it at a Portuguese consulate or embassy. Applicants must be over 18, work fully remote, and have a permanent contract or be a freelancer with a client base outside Portugal.

Notably, An added benefit of Portugal’s Digital Nomad Visa is the provision for family reunification, allowing close family members like a spouse or dependent children to join the visa holder in the country.

Comparing Income Requirements

The formulation of income requirements for digital nomad visas varies between Spain and Portugal. In Spain, the income requirement is linked to the IPREM (Public Multiple Effects Income Indicator), which is adjusted annually.

Meanwhile, Portugal’s requirement is tied to multiples of the minimum wage. This leads to different income thresholds for applicants, with Spain’s digital nomad visa requiring a minimum monthly income of €2,334 for single applicants, while Portugal requires a stable monthly income of at least €3,280.

Spain's Income Requirements

In addition to the minimum income, applicants to Spain’s digital nomad visa must prove financial means of at least 200% of the Spanish minimum wage to meet the visa requirements.

For applicants with families, the minimum income requirement increases by a certain amount per family member. For instance, a family of two must demonstrate a monthly income of €2,970, a family of three must show €3,240, and a family of four must have €3,510.

For sponsoring dependents, the visa holder needs to show an additional 75% of the minimum salary for the first dependent and 25% for any additional dependents.

Portugal's Income Requirements

Applicants for Portugal’s digital nomad visa must meet the following financial requirements:

• Display a monthly income of €3,280
• Demonstrate financial sustainability with a minimum of €9,840 in their bank accounts
• If applicants have family dependents, extra income is required: €380 monthly for a spouse and €228 monthly per child.

These income requirements constitute a significant financial barrier for some, and including family members in the visa significantly increases the proof of funds required.

Taxation and Financial Benefits

Both Spain and Portugal present appealing tax schemes for digital nomads in terms of taxation and financial benefits. In Spain, digital nomads can benefit from an initial reduced tax rate of 15% for the first four years, after which the standard rate of 25% applies.

Contrarily, Portugal offers digital nomads the option to apply for Non-Habitual Resident (NHR) status, which offers significant tax advantages like a steady 20% tax rate on Portuguese-sourced income, compared to the standard rate, which can climb as high as 48%.

Spain's Tax Advantages

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Spain offers the following tax benefits for digital nomad visa holders:

• A reduced tax rate of 15% for the first four years under a special Non-Resident Income Tax Regime.
• For non-resident digital nomads staying in Spain for less than 183 days in a tax year, they are taxed at 24% on general income and 19% on savings income earned in Spain.
• Spain has established double taxation agreements with numerous countries to prevent double taxation.

Digital nomads setting up a company in Spain can also take advantage of the ‘Patent Box’ regime, offering up to a 60% reduction on income derived from intangible assets. However, self-employed digital nomads must register as autónomos and are subject to high social security contributions.

Portugal's Tax Advantages

Portugal’s Non-Habitual Resident (NHR) status remains an attractive tax regime for skilled professionals and high-net-worth individuals, offering tax benefits for up to 10 years. However, as of 2024, there have been some key changes that digital nomads should be aware of:

1. Tax Rate: The fixed income tax rate for income generated within Portugal remains at 20%. However, digital nomads should note that the NHR scheme now has stricter rules on which foreign income can be exempted from Portuguese taxation. Specifically, income from certain types of foreign sources, which were previously exempt, may now be taxed if not taxed in the source country.
2. Eligibility and Compliance: The updated regulations also impose stricter compliance requirements for maintaining NHR status, including detailed documentation proving the source and nature of income. Failure to meet these requirements could result in losing the tax benefits of the NHR scheme.
3. Dual Residency Concerns: The NHR status no longer offers the same level of protection against dual residency issues. Digital nomads may find themselves subject to taxation in both Portugal and their home country, depending on the specific tax treaties in place.

To benefit from this scheme, digital nomads must spend at least 183 days in Portugal annually and not have been tax residents in Portugal for the previous five years.

Citizenship and Residency Options

Maintaining legal residency in either Spain or Portugal paves the way to permanent residency and, in the long run, citizenship. Both countries offer pathways to these, but the duration and requirements differ.

Compared to Spain’s lengthier process and complex dual citizenship rules, Portugal provides a quicker route to citizenship and straightforward recognition of dual citizenship.

Spain's Path to Citizenship

In Spain, digital nomads can apply for permanent residency after five years of legal residence in the country. The initial residency permit, which lasts for three years, can be renewed for another two years.

To maintain eligibility for permanent residency, digital nomad visa holders must not stay outside of Spain for more than one year within the five-year period.

After a continuous period of legal residence for ten years, digital nomads can then apply for Spanish citizenship. However, it’s worth noting that applicants must prove they have no criminal record from their country of residence at the time of applying.

Portugal's Path to Citizenship

In Portugal, digital nomads holding a residence permit have the opportunity to apply for permanent residency. After five years of legal residence, digital nomads can apply for Portuguese citizenship. This requires passing a basic Portuguese language test and maintaining a clean criminal record.

The process for obtaining Portuguese citizenship can take approximately two years. However, securing permanent residency and citizenship in Portugal opens up opportunities such as the option of dual citizenship, enabling broader access to living and working within the European Union.

Living Conditions and Lifestyle

Spain and Portugal both offer an abundance of benefits in terms of living conditions and lifestyle. They both provide a high standard of living at a more affordable rate than many other European countries. Some key benefits of living in Spain and Portugal include:

• High quality healthcare systems
• Beautiful weather and a relaxed lifestyle
• Rich cultural heritage and history
• Delicious cuisine and wine
• Stunning natural landscapes and beaches

While Portugal is considered slightly less expensive than Spain, particularly when it comes to rental prices, it is important to note that recent economic developments, including inflation and repercussions from the conflict in Ukraine, have led to higher costs for electricity and some goods in Portugal.

Spain's Living Experience

In Spain, living expenses are roughly 20-40% lower than many other Western countries. Here are some average costs:

• Renting a one-bedroom apartment ranges from €600 to €1,500 per month
• Utility bills average €100 to €200 per month
• Groceries are affordable
• Dining out remains reasonably priced

Public transportation offers cost-effective options, and private health insurance varies from €60 to €150 per month.

Spain’s unique architecture, vibrant culture, and excellent internet speed make it a desirable destination for digital nomads.

Portugal's Living Experience

Portugal, on the other hand, is recognized as:

• One of the lowest-cost countries in Western Europe
• The Portuguese community is welcoming to expats
• The country provides plenty of family and pet-friendly activities.

Portugal boasts scenic diversity that spans from the vibrant city life in Lisbon to the cultural vibrancy of Braga and the coastal ambiance of Aveiro, each offering unique experiences for digital nomads.

Healthcare Acccess

Healthcare access is a critical consideration for digital nomads in both Spain and Portugal, with each country imposing specific requirements for private health insurance.

While Spain primarily relies on private insurance for non-residents, Portugal offers a pathway to public healthcare once a residence permit is secured.

Spain's Healthcare Access for Digital Noamds

Spain requires digital nomads to have comprehensive private health insurance that covers their entire stay in the country. This insurance must be from an authorized provider and should include coverage for hospitalization, medical treatment, emergency services, and repatriation.

Maintaining active private insurance is essential because access to Spain's public healthcare system is typically only available to citizens or people working for Spanish companies.

• Mandatory private health insurance covering the full duration of stay
• Coverage must include hospitalization, emergency services, and repatriation
• No co-payments or deductibles allowed in the insurance policy

Portugal's Healthcare Access for Digital Nomads

In Portugal, digital nomads are also required to secure private health insurance before obtaining their visa. Once they have a residence permit, they can access Portugal's public healthcare system, which is known for its high quality and affordability.

However, maintaining private health insurance is essential until public healthcare access is granted.

• Private health insurance required before visa approval
• Insurance must cover medical treatment, hospitalization, and emergency services
• Access to public healthcare upon obtaining a residence permit

Top Digital Nomad Cities in Spain and Portugal

Every digital nomad is unique, and so are their preferences for an ideal location. Both Spain and Portugal offer vibrant cities with unique attractions that cater to the digital nomad community. In Spain, Barcelona is renowned for its creative culture and architecture, while Gran Canaria is loved for its favorable climate and beach lifestyle.

Meanwhile, Portugal’s Lisbon offers a mix of historical charm and modern amenities, and Madeira is known for its stunning natural landscapes and digital nomad infrastructure.

Spain's Digital Nomad Hotspots

For digital nomads seeking a Spanish destination, some popular options include:

• Madrid, with its 125 coworking spaces, world-class museums, and more than 2,700 hours of sun per year
• Barcelona, with its unique architecture and a strong freelancer community
• Gran Canaria, which offers a thriving remote work environment
• Mallorca, which caters to digital nomads with its picturesque Mediterranean coves and rich culinary scene.

Granada, Tarifa, Bilbao, and Valencia also hold their own unique appeals for digital nomads.

Portugal's Digital Nomad Hotspots

In Portugal, Lisbon and Porto are major cities known for their digital nomad communities. Lisbon’s vibrant culture, historic sites, and coworking spaces draw digital nomads, while Porto offers a charming old town, a burgeoning tech scene, and a more affordable cost of living.

Emerging digital nomad destinations include:

• The Algarve region, known for its pleasant climate and natural beauty
• The Azores, with its stunning landscapes and slower pace of life
• Madeira, which houses the innovative Digital Nomad Village.

Challenges and Limitations

Despite the enticing opportunities Spain and Portugal present for digital nomads, acknowledging their potential challenges and limitations is crucial. These can include:

• Bureaucratic processes
• High income requirements
• Language barriers
• Limited job opportunities for non-EU citizens

It’s important to be aware of these factors before making a decision to embrace the digital nomad lifestyle.

Spain's Challenges

For Spain, the application process for the digital nomad visa can be cumbersome, involving multiple bureaucratic steps. The high income requirements could pose a financial hurdle for some applicants.

Language barriers can create challenges for non-Spanish speaking digital nomads, affecting social integration and understanding of legal obligations. Also, finding long-term housing that accepts digital nomad visas may be challenging due to landlords favoring tenants with traditional employment contracts.

Taxation requirements involve paying a 24% income tax for the first 6 months, with subsequent rates determined by complex double taxation agreements.

Portugal's Challenges

In Portugal, the digital nomad visa application process can be complicated and time-consuming, often taking 3 to 4 months due to bureaucracy and the extensive documentation required.

The high income requirement, particularly for those with unpredictable income or short-term contracts, may pose a challenge. Nomads already in the country may find it inconvenient that they must leave Portugal to apply for the Digital Nomad Visa.

There is also an ambiguity surrounding the need for a Portuguese bank account for visa applicants, which can cause confusion.

Tips for Choosing the Right Destination

In deciding between Spain and Portugal as your destination for digital nomadism, it’s worth considering aspects like:

• Local culture and language, as they can impact your daily life and ability to assimilate
• Digital infrastructure in potential destinations, focusing on internet connectivity and the presence of coworking spaces that meet your needs
• Existing digital nomad and expat communities in different cities, to ensure you have support networks and social opportunities

Lastly, check visa requirements and the process for obtaining a residence permit, as ease of access may influence your choice.

Summary

In conclusion, both Spain and Portugal offer unique advantages to digital nomads, from favorable tax regimes to paths to permanent residency and citizenship. Both countries have vibrant cities that cater to the digital nomad lifestyle, offering a blend of cultural richness, quality of life, and supportive environments for remote work.

However, they also present unique challenges and limitations, from bureaucratic visa processes to language barriers. Therefore, choosing the right destination will ultimately depend on your individual preferences and circumstances. By doing thorough research and carefully considering your options, you can find the perfect European destination for your digital nomad journey.

Frequently Asked Questions

Is it easier to get residency in Portugal or Spain?

It is easier to get residency in Portugal than in Spain, as Portugal offers a quicker and easier route to citizenship through its Golden Visa program, allowing investors to apply for citizenship after five years of residence.

Is Spain or Portugal better for expats?

Portugal is a better choice for expats between Spain and Portugal due to its higher safety ranking, being the fourth safest country in the world, compared to Spain's 31st position (source: globalpeaceindex.org).

What are the income requirements for the digital nomad visas in Spain and Portugal?

The income requirement for the digital nomad visa in Spain is a minimum monthly income of €2,334, while in Portugal, it's at least €3,280. These are essential to meet in order to apply for the visa.

How can I obtain permanent residency or citizenship in Spain and Portugal?

To obtain permanent residency or citizenship in Spain and Portugal, you can apply for permanent residency after five years of legal residence in Spain, while in Portugal, you can do the same for permanent residency and citizenship after five years of legal residence.

What are some of the top cities for digital nomads in Spain and Portugal?

Some top cities for digital nomads in Spain include Barcelona and Gran Canaria, while Lisbon and Madeira are popular choices in Portugal. Both countries offer vibrant communities for remote workers.