The U.S. Social Security Administration refuses to issue a certificate of coverage, forcing Spain to reject the digital nomad visa to applicants’ employees of U.S. companies willing to telework from our country. This Agency claims that the Totalization Agreement does not specifically cover digital nomads, but only temporary international assignments.
Spain and the U.S. have a Bilateral Social Security Agreement, known as the Totalization Agreement, aimed at preventing double contributions and allowing the accumulation of social security benefits from both countries. However, the U.S. interprets this agreement as applicable only to employees temporarily posted to Spain, not to those seeking digital nomad visas to work remotely from the country.
This issue doesn’t arise with other non-EU countries that have Totalization Agreements with Spain. For instance, countries like Colombia and Mexico issue the necessary certificates confirming that the employee remains covered by their home country’s social security system during the agreed period, facilitating compliance with Spanish requirements and increasing the likelihood of obtaining the visa.
Understanding the Digital Nomad Visa
The digital nomad visa or residence visa for teleworking is an authorization for non-Spanish, non-EU citizens who wish to carry out a remote work or professional activity from Spain for companies located outside Spain, through the exclusive use of computer, telematic or telecommunication means.
Holders of this visa are allowed to work from any location in Spain, as long as they do not work for Spanish companies or clients. The foreigner who performs an activity as an employee may only work for companies located outside Spain.
A foreigner who is self-employed (as a freelancer) may also work for companies located in Spain, as long as the percentage of such work does not exceed 20% of their total activity.
A requirement to obtain this visa is having a graduate or postgraduate degree issued by universities of recognized prestige, professional training centers or business schools, or to prove a minimum professional experience of three years.
The following family members of the teleworker may also obtain the visa:
- The spouse or civil partner.
- Minor children and children of age who are financially dependent on the teleworker and who do not themselves constitute a family unit.
- Ascendants who are dependent on the teleworker.
Obtaining the digital nomad visa also requires the submission of several documents, amongst which a Certificate of Coverage is essential. This certificate functions as a responsible declaration containing the commitment, prior starting the work or professional activity, to comply with Social Security obligations in the issuing country.
This commitment must include the payment of contributions and the guarantee that the employee will be duly covered by social security benefits during the period in which the employee is working for a foreign company from a location in Spain.
Why does the United States hinder the application for the digital nomad visa for Spain?
Despite the Totalization Agreement between Spain and the United States, the latter is denying the issuance of the Certificate of Coverage, which makes it impossible for American employees applying for the digital nomad visa to live in Spain while teleworking for a company in the United States.
The United States interprets that the Totalization Agreement is only applicable to employees hired by U.S. companies in a temporary international assignment to Spain. Under this modality, the employee does maintain the contract and the Social Security coverage at source during the periods indicated in the aforementioned Agreement, but as an intra-company transfer.
Since the Social Security certificate is mandatory to obtain the digital nomad visa, these employees face obstacles to reside in Spain while working for US companies, as the only solution involves US companies complying with the Social Security obligations in both countries. This is a significant barrier for American employees looking to take advantage of the flexibility of remote working and living in Spain.
New Social Security Agreement between Spain and the USA
The U.S. Social Security Administration “deflates” the Spanish Government’s plan to attract digital nomads to Spain from this country by offering additional tax benefits related to the famous “Beckham Law”. As stated before, compliance with the Social Security requirement is posing a serious problem. In an attempt to help U.S. employees in their relocation to Spain under the digital nomad visa, the Spanish Minister of Inclusion, Social Security and Migration has announced the signing of a new Social Security Agreement between Spain and the United States seeking to promote international labour mobility and the transit of insured employees between both countries.
Absent an official publication, the Minister has announced that the main changes will affect calculation of Spanish pensions.
Likewise, it is expected that this new agreement broadens the scope of application of the Totalization Agreement to expressly include international teleworkers, which would facilitate the regularization process of this category and expand the possibilities of application of visas for digital nomads in Spain.
At Lullius Partners, we tailor and coordinate each client’s strategy based on the unique requirements of their situation, ensuring all obligations are met while maximizing benefits and minimizing potential risks. If you are thinking about moving to Spain, reach out to us for more information and/or detailed and personalized advice.
