Moving to Spain from the US?
Spain is an incredible country with so much to offer from history and culture to beautiful beaches and a way of life that most Americans dream of.
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Relocating to Spain comes with its own set of unique challenges. While there are much more difficult places to move to, getting a residency permit in Spain and minimizing Spanish tax obligations certainly requires planning and correct execution – which is something that we have done for clients for over a decade.
With Talenom International Mobility helping you with your residency in Spain, you can be sure that you have some of the best professional advice available when you’ve decided to make your move.
Why are Americans moving to Spain?
Over the last few years, we have attended numerous North American clients who have decided to move their lives and business here. These are the most common reasons we hear regarding why:
- “I want to enjoy the insuperable quality of life in Spain while working remotely for international companies.”
- “I saw the business and investment opportunities in Spain and decided to take advantage of them.”
- “I want to offer my family an international experience to broaden our horizons.”
- “I want to retire in a place that I have always loved as a tourist.”
- “I do not recognize my country anymore and want to try something else for a while”.
First things first!
Before we jump into the nuts and bolts of the key steps in relocating to Spain here are a few friendly words of advice to keep in mind:
- You’ll never have all the answers before leaving, but doing ample research is critical. Moving to Spain isn’t something you want to swing blindly into. At the very least you need to know how which city in Spain is the right match for you, how to rent an apartment or purchase a home, where you can find work if needed, how to get a driver’s license, a residency permit, how does the move impact your taxes, and so on. The point is you need to be prepared. Talenom International Mobility can help you to figure out all these aspects long before you arrive.
- There’s no “right way” to become an expat. For all intents and purposes, you don’t have to get dramatic about relocating to Spain by packing all your things and surrendering your American or Canadian citizenship. You can start slowly by living in Spain for just a few months out of the year before you fully commit. The limit you can stay as a tourist without any further formalities is 3 months within a period of 6 months.
- English is the second most spoken language in Spain, and you can survive without speaking Spanish, but you may want to consider learning some words. It will open up the country and the people to you in a different manner.
Now that we’ve gotten those tidbits out of the way, let’s dive into challenges Americans and Canadians face when relocating to Spain.
Getting a Spanish Residency Permit
The next challenge for the North American moving to Spain is garnering a residency permit.
Depending on your situation and goals, here are the options and criteria you’re looking at for residency:
Non-Lucrative Visa
If you’d like to retire to Spain or live here for a period of time and you don’t wish to work, then this is the visa for you.
All you need are the following:
- Private health insurance
- Proof of sufficient funds beginning at 33.000€
- Rental agreement or title to real estate where you would live
- Certificate of the absence of a criminal record
Student Visa
If you’re planning on studying for your master’s or Ph.D. or participating in a research program in Spain, this is the visa you want to go for. This visa will allow you to work, get an internship, and study in the country with the advantage of allowing you to transition towards a work permit afterwards—minus the extra paperwork and other visa requirements.
Business Residency Permit
If you plan to set up a business and become a resident at the same time, you’ll likely qualify for a business residency permit or entrepreneur visa. Bonus points are given, if what you’re doing is of economic interest for the country, involving high levels of technology.
There’s also a self-employed work permit for other business categories if you don’t meet the requirements of the above.
Digital nomad
This visa allows foreigners to legally work remote for more than 90 days and live in Spain. It offers a right to residency in the country for up to 3 years with renewals of 2 years as long as you maintain the conditions.
This visa is mainly for two types of profiles: A worker whose company lets them work remotely from Spain and for a self-employed worker with different funds of income obtained from online actives but spread outside Spain or with diverse clients distributed all over the world.
Investor Visa, i.e. The Golden Visa
Investor visas, otherwise known as the Golden Visa, is arguably the easiest way to get your residency and work permit here. It was created to attract foreign investment to Spain. To qualify for an investor visa, you’ll need to invest 500.000€ in Spanish real estate, by shares of a Spanish company by 1 million euros or buy Spanish bonds for 2 million euros. We have presented hundreds of successful Golden Visa applications for our clients, and curiously, none of them have chosen the bond option.
Work permit for a highly qualified employee
If you’ve been offered a job as a highly qualified worker, the application procedure can be done in Spain. This permit requires that you have university studies, you’ve been leveraged in a technical position or as a manager and are projected to earn over 40.000€ per year.
Permanent Residency
If you’ve been living in Spain for at least five years under any residency visa (except for the student visa) which does not count), you’ll be eligible to apply for permanent residency, which will grant you Spanish permanent residency.
All you really need to meet the requirements are your passport, current permit, and the proper paperwork filled out, and voilá! – you’re approaching Spanish citizenship.
Taxes
Paying taxes properly when moving to Spain from the US is something that needs to be done but is never anything fun. In a nutshell, if you are living and/or working in Spain, you’re expected to file a Spanish tax return and pay income taxes in Spain on both your income and assets.
However, whether you pay taxes on your “worldwide income” as in, if you’re still earning additional money stateside as well as in Spain, will be determined by your residency status.
Here are the criteria you must meet to pay taxes in Spain—which, if you’re moving to Spain, you’ll likely meet:
- You must be present in Spain for more than 183 days during a calendar year. If there are several absences, you must prove that you’re a tax resident elsewhere.
- You’re involved in business ownership or other economic interests in Spain.
- Your spouse and/or underage children are domiciled in Spain.
Taxes apply on a progressive scale in Spain, however, deductions do exist. This comes in handy considering that residents of Spain must pay Spanish tax on their worldwide income. For non-residents, you will only have to pay your taxes on your Spanish income (if you have an income while in Spain) and at a flat rate.
This would include any potential income that comes from your property, even if you don’t rent it out. Beyond property ownership, Spanish tax also applies to investment interests as well as goods and services.
The taxes in Spain are also split between state and regional governments, which means that your Spanish tax rates can and will vary across the country for the following:
- Income tax
- Property tax
- Wealth tax
- Capital gains tax
- Inheritance tax
Moreover, if you work in Spain, you must also contribute to Spanish social security taxes.
Lastly, the US and Spain have a tax treaty so that expats can avoid paying double tax while living abroad. It’s also to help expats avoid paying taxes to the wrong country. This treaty can be a bit difficult to navigate, as taxes in Spain, in general. It’s best to consult with tax professionals to understand which requirements you meet and to ensure you’re paying the right type of taxes and in the right amounts.
At Talenom International Mobility we handle hundreds of tax filings for American expats every year and we would be happy to support you with navigating this as well. A properly planned tax strategy makes sure you are not paying more than is absolutely necessary.
Moving to Spain from the US can be an exciting adventure, especially if you plan to take advantage of everything the country has to offer. Once you figure out where to live, the type of residency you need, and the taxes you’ll have to pay, you’ll be well on your way to living the easy life you’ve always dreamed of in one of the most exceptional countries in the world.
And we can help you with ALL of that!
If you’re thinking about relocating to Spain from the US, we have an entire team of experienced lawyers, economists, relocation specialists, accountants, and real estate professionals to guide you through it all.
