Cross-Border Remote Work FAQs Spain

Assume that a foreign national employee of a foreign company wishes to work remotely for a period of time in your country performing services exclusively for the foreign company and not interacting with the local market in your country.

Work authorisation

A. Is work authorisation required? If so, please provide a brief description of the type of visa, procedure, processing time, etc.

Since the entry into force of Law 28/2022, Spanish legislation formally provides for the situation of international remote workers through the so-called digital nomad visa or international telework residence authorisation. This allows those who come to Spain to work remotely for companies located outside the national territory, by means of the exclusive use of computer or telematic means and systems.

They will be able to request the visa or the authorisation of remote work those who are qualified professionals who prove to be graduates or postgraduates of universities of recognised prestige, professional training and business schools of recognised prestige or with a professional experience of at least three years.

The following requirements must also be met:

• The existence of a real and continuous activity for at least one year of the company or group of companies with which the employee has an employment or professional relationship.
• Documentation proving that the labour or professional relationship can be performed remotely.
• In the case of an employment relationship, it must be proven the existence of such relationship between the employee and the company not located in Spain for at least the last three months prior to the filing of the application, as well as documentation proving that such company allows the employee to perform the work activity remotely.
• Not to be illegally in Spanish territory.
• To be older than 18 years old.
• Not to have a criminal record in Spain and in the countries where he/she has resided during the last two years, for crimes foreseen in the Spanish legal system. Additionally, a declaration of non-existence of criminal record for the last five years must be submitted.
• Not to appear as rejectable in the territorial space of countries with which Spain has signed an agreement in such sense.
• To have a public insurance or a private health insurance arranged with an insurance company authorised operating in Spain.
• To have sufficient economic resources for themselves and their family members during their period of residence in Spain.
• Pay the fee for processing the authorisation or visa.

The maximum term of validity is one year, unless the period of work is less, in which case the visa will have the same validity as this one. The visa for international teleworking will constitute sufficient title to reside and work remotely in Spain during its validity.

In this sense, in the term of sixty calendar days before the expiration of the visa, the teleworkers of international character who are interested in continuing residing in Spain will be able to request the authorisation of residence for international teleworker, as long as the conditions that generated the right are maintained.

Therefore, those foreigners who are in Spain on a regular basis or who have accessed by means of the international telework visa, may apply for a residence authorisation in order to work remotely for a company located abroad, which will be valid in the whole of the national territory.

The validity of this authorisation will have a maximum validity of three years unless it is requested for a shorter period of work.

The holders of this authorisation may request its renewal for periods of two years as long as the conditions that generated the right are maintained.

Risk of 'permanent establishment'

B. Is there risk of 'permanent establishment' consequences for the foreign company by virtue of the remote worker’s activities?  If so, what are the main factors determining the exposure.

If the employee only works from Spain for a foreign company and does not interact with the local market, the risk of potentially creating a permanent establishment is low.

The main factors to consider when determining if a situation constitutes a permanent establishment are:

• The existence of a place of business – any premises or facilities that are used for carrying out the economic activity of the company, whether (or not) they are used exclusively for this end.
• The place of business must be "fixed" – although currently, a certain mobility of the place of business is admitted, the fact that a certain degree of permanence in time, in the territory of the State, becomes more relevant.
• The activities of the company are carried out through the fixed place of business – this requires that the physical space of the place of business is effectively used for the development of a business activity.
• That the employee does not act as a dependent agent empowered to bind the company contractually or negotiate in its name.

Proper structuring is essential to avoid permanent establishment exposure, including limiting the scope of duties performed from Spain, ensuring no managerial or contractual authority is exercised locally, and documenting that all business is executed from the foreign entity.

Local social security and other payroll requirements

C. At what point and under what circumstances would the remote worker become subject to local social security and other payroll requirements?  Can such requirements be fulfilled by a foreign company, and if so by what mechanisms?

If there is a bilateral or multilateral Social Security agreement with Spain, the employee's status as a posted worker must be accredited by means of a certificate of Social Security coverage in the country of origin, so they do not have to be registered in the Spanish Social Security system, pursuant to the terms established in such agreement.

On the other hand, if there is no bilateral agreement between the country of origin and Spain, the employee must be registered in the Spanish Social Security system.

Local employment law requirements

D. At what point and under what circumstances does the remote worker become subject to local employment law requirements such as is wage-hour, local holidays, annual leave, maternity leave, disability leave, protection against unfair dismissal, etc.

Although the Spanish legislation does not expressly determine the applicable labour law, practical experience since its entry into force suggest a dual analysis: contractual law and mandatory local protections.

Under Article 8 of the Rome I Regulation, the employment contract is governed by the law chosen by the parties. It is strongly recommended that this choice be clearly stated in the employment agreement or in a standalone document. It should also be documented that it is the employee’s decision to work remotely from Spain.

However, if the work is habitually performed in Spain, Spanish authorities and courts may consider applying Spanish mandatory labour protections, regardless of the chosen law. These include, for instance, rights related to working hours, rest periods, paid leave, minimum wage, health and safety, and dismissal protection.

Remote foreign worker

E. Are there special requirements governing remote work in your country which would cover the remote foreign worker?

Spanish Employment Law minimum rights (working hours, health and safety, annual leave, minimum wage...) will have to be respected if the employee is providing services here, however these do not include specific remote work rules.

Income tax

F. What is the employee’s exposure to local income tax, and under what circumstances is the foreign employer required to arrange for withholding of income tax?

Remote workers residing in Spain under the digital nomad visa may opt into:

• Spain’s special tax regime for inbound workers (commonly referred to as the “Beckham Law” regime). Under this regime, they can be treated as non-residents for tax purposes and subject to Non‑Resident Income Tax (IRNR) at a flat rate of 24% on Spanish‑sourced employment income up to €600,000. This preferential regime is available only to individuals who have not been tax residents in Spain during the five years preceding their relocation, and who meet other eligibility criteria (e.g., having remote work income from a foreign employer). The regime can be applied for a total period of six tax years after which taxation reverts to the general resident rules.
• If the worker does not apply for, or does not qualify for the special regime, and becomes a tax resident in Spain (generally by exceeding 183 days of presence or having their economic interests centred in Spain), then Personal Income Tax (IRPF) applies. Under this regime, the worker is taxed on worldwide income at progressive rates of up to approximately 47%.

However, each situation should be studied on a case-by-case basis.

Claim for workplace injury

G. Would the remote worker be entitled to bring a claim for workplace injury in your country?

A remote worker who suffers a work-related injury while physically working from Spain may, in principle, file a claim under Spanish law, particularly under Spanish health and safety regulations.

Although Article 8 of the Rome I Regulation allows the parties to choose the governing law of the contract, this does not prevent the application of mandatory protective rules of the country where the work is actually performed.

If the employer fails to provide a minimum level of risk prevention, safety evaluation, or adequate working conditions, Spanish authorities (such as the Labour Inspectorate) may intervene, and the worker may seek compensation.

It is advisable to establish clear protocols on occupational health and safety for remote workers in Spain and document compliance.

National healthcare system or insurance

H. Would the remote worker be covered under the local national healthcare system or insurance?

No, because the employee will not, technically, be working in Spain. Consequently, he will not be registered with the Spanish Social Security system, and this is actually the reason why one of the requirements needed in order to obtain the authorisation is to prove that he has health insurance and through an insurer that is able to operate in Spain, considering the fact that he will not be registered in the national healthcare system.

Data privacy and security

I. Is a foreign employer subject to data privacy and security requirements regarding protection of employee personal information for a foreign employee working remotely in your country?

Regarding this aspect, the international regulations are not altogether clear and are difficult to ascertain, therefore, the particular case should be analysed taking into account the specific details of the hire, the employer, the nationality, the location of the data controller, and so forth.

Foreign remote worker

J. Has there been any litigation or specific law or regulation regarding the foreign remote worker in your country?

Yes, as indicated under question A above. However, please note that this is a very recent regulation and surely more practical interpretations of its functioning will emerge.

Citizenship

K. Would any of the above answers change if the remote worker (a) is a citizen of your country, or (b) engages in activity interacting with the local market?

a) If the remote employee is a citizen of Spain, they will not be eligible for this type of work authorisation since it is exclusively foreseen for non-EU citizens.

b) If the employee was to engage in activity with the local market, the first problem likely to arise would require a determination as to whether (or not) there is a permanent establishment here in Spain. Should any doubts or uncertainty surface as a result of this, employment rights could probably be requested by the employee although, theoretically, the company should be successful still in applying the legislation designated in the contract.