Historically, Spain hasn’t been the easiest place for non-EU residents to move to. Compared with neighbouring Portugal, which has welcomed people from outside of the EU with its D7 visa since 2007, there hasn’t been a simple way to make the move to Spanish shores without being sponsored by your employer. Until now.

Spain’s new digital nomad visa is part of a wider policy package to encourage entrepreneurship and the digital economy, and in October the country’s parliament finally approved the new measures.

The legislation still needs to be approved by the senate, and we don’t have every detail about the visa yet, but to tell us what we do know Sifted spoke to David Miranda, partner at Osborne Clarke law firm.

When will people be able to start applying for the Spanish digital nomad visa?

The Spanish senate is expected to finally pass the startup law in January 2023, but Miranda says the visa element will “require additional regulation that, according to the [startup law] bill, should be approved by the government before March 31, 2023”.

He adds that we don’t yet know much about how the application process will work logistically, and that this won’t become clear until the new year.

What will the digital nomad visa allow people to do?

Miranda says that the new measure “will let foreign workers obtain a residence and work visa”. The initial maximum duration of the visa will be one year, but applicants will be given the option to apply to extend that to up to five years.

What are the requirements for applicants?

Applicants must be either “employees working exclusively for a foreign company” or “consultants” who are providing their services to mostly foreign clients, Miranda explains. In the case of consultants (this is likely to cover most self-employed and freelance workers), no more than 20% of their work can be for Spanish clients.

In order for an applicant to be eligible for the visa they “must have a degree or a postgraduate from a reputable university or business school, or have more than three years’ working experience,” says Miranda.

Media reports also suggest that there’ll be a minimum monthly income requirement of €2,000, and that employees will need to show they’ve been working for a year, while freelancers will need to show regular work with one client.

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Will digital nomads on the visa pay tax?

People using the digital nomad visa won’t become a tax resident in Spain until they’ve spent 183 days in the country, Miranda explains. Before then, they’ll keep paying tax in their country of origin. Once they become Spanish tax residents, they’ll start paying tax in the country, and this is where it gets a little more complicated.

At this point they’ll be subject to Spanish tax brackets, which vary depending on where you live in the country. But digital nomads will also have the option to apply for the “tax rate for new Spanish residents,” says Miranda. This means that they can apply to pay a 24% rate on income up to €600k per year, as opposed to the normal tax rates for residents (45 to 50% for workers earning more than €60k per year).

Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith