Digital Nomad Visa – will Spain become a playground for the wealthy laptop class?
Spain’s new Digital Nomad Visa is the talk of the town.
Or at least the talk of all the Facebook groups for expats from outside the European Union.
Yes, Spain is finally going to move to attract remote workers from other countries – it’s gonna be a big laptop-class flamenco-and-sangría orgy out here soon.
The final details of the new Digital Nomad Visa haven’t been worked out yet, but they should be by the end of this month, March 2023.
So while all the young, tech-savvy wanderlusters from around the world wait with baited breath to see what kind of bizarre requirements Pedro Sanchez and his band of incompetents come up with, let’s take a deeper look at the implications of creating a digital nomad visa in Spain.
Ready? Let’s go…
Digital Nomads – coming soon, to a city near you
I’d like to draw your attention to an article by one Germán Saucedo, called “The Laptop Class Crosses the Border“.
In it, Saucedo describes the thriving digital nomad scene in Mexico City – a city which, for many reasons, is attracting American and Canadian remote workers like never before.
Arriving in Mexico on a six-month tourist visa, these “nomads” of the laptop class can afford a lifestyle they’ve often been priced out of in New York, San Francisco, Vancouver or Toronto.
So while enjoying the weather, food, and culture south of the border, they continue attending Zoom meetings in the north. They earn their large paychecks, and pay no income tax. And so far, the Mexican government is doing nothing to stop them.
Eventually, they run out their visas and hop back across the border to reset the six months, or they move on to another nomad-friendly location like Lisbon, or Bali, or (who knows?) maybe even Barcelona.
It sounds pretty idyllic, doesn’t it? At least if you’re one of them.
Trading in your extortionate rent in Manhattan for a much smaller monthly payment abroad, while still being able to enjoy the big city vibe, with all the bars, clubs, brunches and artisanal matcha lattes you’re used to back home.
The progressive case for massive inequality
I liked Saucedo’s piece because it talks about both the hilarity of people in Mexico being annoyed about those crossing their northern border, as well as the hypocrisy of progressive liberals moving to the “developing world” just to benefit from the economic inequality they find there.
Because that’s exactly what they’re doing. If you move to a country where most people are earning around $450 a month, your six-figure salary is going to go a lot further. Hooray for inequality.
Tim Ferriss called it “geo-arbitrage” back in the day. In his book, The Four-Hour Work Week, which inspired many (including myself) to start low-maintenance online businesses, he laid out the case for moving abroad, at least temporarily: earn in a strong currency and spend in a weak one. Put your stuff in storage and go somewhere far away to enjoy a low cost of living. What could possibly go wrong?
(I was already abroad at that point, earning my English teacher’s salary in Madrid and spending it in a moment that the euro was very strong, so I took Timmy’s enthusiasm with a grain of salt.)
Your typical digital nomad, of course, supports a $15-an-hour minimum wage… in theory. But by the end of the article, Saucedo comes to more or less the same conclusion I have: the ultra-progressive laptop class doesn’t actually care that the people serving them are earning a buck fifty an hour.
They’re just good at pretending to care when it’s necessary – they repeat the “correct” slogans, and parrot the “correct” beliefs, but they’re not above using the situation for their own benefit.
Anyway, that’s Mexico. What about Spain?
Most people who spend a few weeks here end up loving it. And many fantasize about coming back, someday. Perhaps the digital nomad visa will make that possible.
But my big question is this…
Will Spain benefit from the influx of digital nomads?
Like I said, the final details haven’t been worked out quite yet.
But here’s how it stands as of now: digital nomads will be taxed at a flat 24% rate on their first 600,000€ in yearly income, and will also, of course, pay all the sales taxes when they’re here. They’ll have private health insurance, so they won’t be a burden on the social security system.
The minimum earnings they’ll have to prove amount to about 30,000€ a year – not much in the US, but quite a bit more than 24,000€ the average Spaniard is earning.
So, the nomads get the fun in the sun, Spain gets the tax revenue from some potential big earners and spenders. It might just be a win-win.
Except for real estate, of course.
In my time here in Spain, nearly 20 years now, we’ve been experiencing what amounts to a permanent real estate crisis.
First there was the real-estate bubble before 2008, in which the prices to buy homes were rising day by day. In those days, people felt like geniuses for spending half a million euros on a fifth-floor flat in a working-class neighborhood. Because prices always go up!
People took out huge mortgages on properties worth, in reality, much less. Then came the crash and the Great Recession, in which people in their 50s were moving back in with their parents and practically begging you to rent out the houses they could no longer afford.
Then there was the AirBnB scandal, in which people started blaming tourists for the rising rents in many places. (AirBnB is now mostly illegal in Barcelona, but some people are still putting rooms and apartments up for rent and hoping to avoid the fines.)
After that was the whole covid panic, which we all remember, in which prices dropped because a lot of foreigners went home, a lot of people couldn’t work (and couldn’t, as a result, pay their rent) and there was virtually no tourism.
Now, in 2023, there’s 10% inflation and rising interest rates which are making adjustable-rate mortgage payments no longer affordable for those who took them out near 0%. Add that to all-time high rent prices in several major cities, and you’ve got what’s starting to look like a perfect shit-storm for both renters and those with mortgages.
What will happen to the real estate market when you throw in a bunch of people used to paying 3000 bucks a month for a studio apartment? Probably nothing tragic. But I can almost hear “the locals” shrieking their outrage already.
Spain: a rich nomad’s playground
Of course, wealthy people have been moving to Spain for some time.
Retirees from Germany and the UK – for example – have moved here by the hundreds of thousands, over the last several decades. Presumably, the cost of living was one of the benefits.
More recently, the Non-Lucrative Visa lets anyone with a large bank balance live here temporarily – with possibility of renewal. Some even work remotely while doing so. (It’s not technically legal, but it happens.)
And let’s not forget the Golden Visa that the government passed during the Great Recession: essentially, a visa that lets rich people buy a Spanish residence permit by investing 500,000€ in a house, a million in Spanish stocks, or a cool two million in Spanish government bonds.
In other words, plenty of (relatively) rich people are already here and we’re doing fine. Despite the inflation and all the real-estate chaos I just mentioned, employment remains high and the economy is – officially – doing pretty well.
Also, let’s not forget that Spain has spent years trying to attract a “higher level” of tourist. People have been complaining for quite a while about Spain’s reputation as a low-cost destination for Britons or Scandinavians on package tours, who do little more than get drunk for a long weekend and fly home.
Maybe the digital nomads will represent an improvement in the tourism economy – longer term, spending more money, and doing a bit more for their communities.
We can hope so, at least.
So perhaps an influx of well-paid foreigners is a good thing.
Either way, there’s no stopping it, for now.
I wrote an article years ago about how you probably DON’T want to be a digital nomad, and one of the reasons I gave was the fact that you’ll probably only be semi-legal, wherever you are.
Then Estonia and Portugal created their digital nomad visas. Now Spain is going to have one. So maybe you can be more legal than you once would have been. And maybe Madrid, Barcelona or Bilbao will become the new Silicon Valley.
This certainly is a lot of maybes.
Anyway, lots of people with money want to live in Spain – or at least own a home here. Recently, in fact, a foreigner of some kind – allegedly Asian – bought the most expensive flat in the history of Barcelona: a duplex on the top two floors of “our” new Mandarin Oriental Residences.
(The Mandarin Oriental Residences which only exist, it must be said, because City Hall passed a moratorium on the opening of new hotels, so the developer had to build luxury residences instead.)
Does a building full of ultra-wealthy families on Passeig de Gracia benefit the local economy somehow?
I guess it probably does, but I have my doubts about how much. Whoever it is that just spent 40 million euros – or possibly more – on the new duplex, he’s probably not going out for patatas bravas at Bar Paco after work, or buying broccoli at the farmer’s market on Saturday mornings.
Will there be an anti-digital-nomad backlash?
Digital nomads won’t just be renting real estate, of course.
They’ll be brunching at your favorite spot, coworking at your local café, hitting up the dating apps hoping to sleep with you or someone you know.
How long before we’re all tired of them?
Saucedo, in his article, mentions that some people in Mexico City have taken to confronting digital nomads on the streets. What about I’m not sure. (Excuse me, is that an artisanal matcha in your hand? GO BACK TO YOUR COUNTRY, STUPID GRINGO!)
Meanwhile, in Lisbon, anti-nomad graffiti has allegedly started appearing in more popular areas.
That’s fine. Barcelona’s had its share of “Tourist Go Home” graffiti for as long as I’ve been here. They even protest against mass tourism from time to time.
The anti-system types will always find something to complain about. And one person with a can of spraypaint hardly speaks for everyone in town.
I’m not a class warrior. I think inequality of some sort is inevitable, and so is tourism. (Where do the anti-tourism protestors go when they’re on vacation? To an AirBnB in someone else’s city, I assume.)
So the only question, in my mind, is how much of a nuisance the influx of digital nomads will be for locals like myself (and even more local locals like the “native” population).
I think the digital nomad visa could be a good thing. But then again, I could be wrong.
Hope you’re having a great day out there, wherever you are.
Maybe I’ll see you soon, here in Barcelona, clutching an artisanal matcha while some Catalan separatist yells at you to go back “home”.
Daniel AKA Mr Chorizo.
P.S. Let me mention that I sort of hate the term “digital nomad”. But this is the internet, and we have to write for the algorithm. So it pays to use the words people are actually searching for. And on that note, please check out my recent article about Spanish cuisine.
P.P.S. Every time I read about the real estate market, or leave the house on a weekend to see my neighborhood overrun by a mass of tourists, I wonder: with three quarters of Spain losing population, why not just move to a small town and start a new life, spending a quarter of what I do now on rent? I could even afford to buy a house, if I was willing to live in some place like Castilla y León. We’ll see what happens in the coming years with all of this. And maybe I’ll see you not in Barcelona, but on my farm. I’ll save you some goat meat.
P.P.P.S. What do you think? Is a digital nomad visa going to cause a ton of gentrification? Will it somehow ruin Spain? Or will things carry on mostly like before? Hit me up, right here in the comments…