Spain Personal Income Tax

Individuals performing activities in Spain are sub­ject to tax based on residence and source of income. Resi dents are taxed on worldwide income. Nonresidents are taxed on Spanish-source income and on capital gains realized in Spain only. Several tax exemptions may apply to expatriates.

Individuals are considered residents for tax purposes if they spend more than 183 days in a calendar year in Spain or if the center of their vital interests is located in Spain. A presumption of residence arises if an individual’s family lives in Spain. Resi­dence is determined on a full-year basis; Spain recognizes no change of residence during a fiscal year. A Spanish national who gives up Spanish tax residence is nonetheless considered a Span­ish tax resident for the year of departure and the next four tax years if the new tax residence is in a tax haven.

Special expatriate tax regime. Under the Spanish regulation, an employee assigned to Spain who meets the criteria for being considered a Spanish tax resident may elect to be subject to tax under the nonresident taxpayer rules.

This election is subject to certain conditions, the most important of which are the following:

  • The individual must not have been a Spanish tax resident in the 10 years preceding the tax year of his or her arrival in Spain.
  • The assignment in Spain must be based on one of the following circumstances:
  • The assignment is under a labor contract (local contract or assignment letter) with the exception of a contract for a pro­fessional athlete.
  • The individual is a representative person of a company (with­out a participation in such company or with a participation in an unrelated entity).
  • The individual cannot receive compensation that is deemed to obtained by a permanent establishment in Spain.

Under this special tax regime, employment income up to EUR600,000 is taxed at a rate of 24%, and employment income exceeding this amount is taxed at a rate of 45%.

If the above election is made, the individual is subject to tax on employment income at a flat rate of 24%, instead of at the pro­gressive resident tax rates of up to 45%, which depend on the autonomous community in which the taxpayer resides (other rates may apply to different types of income). The election is effective for the first year of residence and the following five consecutive years. For the purpose of calculating the tax base, the Spanish tax law states that any income derived from the date of arrival in Spain until the communication of the departure is con­sidered employment income obtained in Spain (unless it can be proved that the income is for work performed before the arrival date in Spain).

Income subject to tax. The taxation of various types of income is described below.

Employment income. Taxable employment income includes all com pensation received for personal services, including salaries and wages, payments for certain business-related expenses, pen­sions, housing allowances and other allowances paid in cash or in kind.

Spanish residents with overseas duties may apply a foreign earned income exemption of up to EUR60,100 if certain conditions are met.

Irregular employment income (earned over a period that is longer than two years) may be eligible for a limited 30% reduction if certain conditions are met.

Self-employment and business income. Taxable self-employment and business income includes income from all industrial, commer­cial, professional and artistic activities carried on by a taxpayer.

Residents are subject to tax on self-employment and business income at the rates described in Rates. Nonresidents are subject to a flat 24% (19% for residents of other European Union [EU] member states) tax on gross self-employment and business income after deducting certain expenses related to the business and the activity performed, such as salaries paid, materials pur­chased and miscellaneous expenses.

Directors’ fees. Directors’ fees are considered ordinary income and are taxable to residents at the rates described in Rates and to nonresidents at a flat rate of 24% (19% for residents of other EU member states).

Investment income. Resident individuals are subject to tax on rental income and other consideration derived from the lease of rural or urban real estate at the rates described in Rates. Nonresident indi­viduals are subject to tax on such income at a flat rate of 24% (19% for residents of other EU member states). For tax residents of Spain, net income from the rental of property may be reduced by 60% if the net income result is positive and if the property is des­tined for living (regardless of the age or amount of income of the tenant).

For urban real estate used by the owner as a permanent residence, deemed income does not apply. However, for urban real estate used as a residence or not leased, the law presumes an income of 2% of the cadastral value (1.1% if the cadastral value of the real estate was increased in the last 10 years). If the cadastral value is not determined, then presumed income is calculated by applying 1.1% to half of the value assessed in accordance with the prin­ciples of valuation for purposes of the net worth tax (see Section B).

Income from movable property includes dividends, interest, prof­its from copyrights and industrial property, and the return in cash or in kind on capitalization transactions and life insurance poli­cies.

In determining net income from personal property, limited admin­istration expenses are deductible.

Spanish tax residents and nonresidents are subject to tax on divi­dends, interest and capital gains (regardless of the holding peri­od) at the following rates:

  • The first EUR5,999.99 at a rate of 19%
  • Amount from EUR6,000 up to EUR49,999.99, at a rate of 21%
  • Amount from EUR50,000 at a rate of 23%

Income from public debt or nonresident bank accounts and income derived from the sale of shares or reimbursement of participa­tions in investment funds in official Spanish markets are not taxable if Spain and the country of the taxpayer’s residence have entered into a double tax treaty that includes an exchange-of­information clause.

Interest income and capital gains derived from bonds and securi­ties issued by resident entities or individuals are not taxable if the taxpayer is a resident of an EU member state.

If members of a family unit elect to file separate tax returns, the income derived from property must be attributed to the members who own the property. For spouses under the community prop­erty regime, 50% of the income must be attributed to each spouse (see Section H).

Taxation of employer-provided stock options. Employer-provided stock options are taxed at the time of exercise on the difference between the exercise price and the fair market value of the stock at the time of exercise. This income is also subject to social secu­rity contributions (see Section C).

Income derived from employer-provided share options up to an annual limit of EUR12,000 may be exempt from tax if all of the following requirements are met:

  • The offer or delivery is made to all of the active employees of the company, group or subgroup under the same conditions. This requirement is met if the offer or delivery is made depend­ing on the number of years that an employee has been working in the company or if the offer is made to all the employees who are taxed as residents of Spain.
  • The employee (individually or jointly with the spouse and other family members) cannot own more than 5% of the company.
  • The employee holds the shares for at least three years.

If the entire share award benefit is made under the same condi­tions for all workers of the company, group or subgroup, and if the employee fulfills the three conditions above but exceeds the limit of EUR12,000, only the excess is considered to be taxable income. If the employee disposes of the shares within three years after receiving the share award, he or she must file an amended tax return.

If the stock option income is generated over a period exceeding two years and if it is attributable to only one fiscal year, it may be possible to apply the 30% reduction for irregular employment income (see Employment income). However, the 30% reduction can only be applied every five years, except in some cases.

Any capital gains derived from the subsequent sale of the stock are subject to the capital gains tax rules described in Capital gains and losses.

Capital gains and losses. Capital gains are calculated as the differ­ence between the transfer price of an asset and its acquisition price. Acquisition prices of real estate are indexed by applying coefficients determined by the government.

Capital gains are taxed at a rate of 19% on the first EUR5,999.99, at a rate of 21% on the amount from EUR6,000 to EUR49,999.99, and at a rate of 23% on the amount from EUR50,000 onward.

For Spanish tax residents only, capital losses incurred on sales of assets may be offset against capital gains. Any excess losses may be carried forward for four years.

For filers of individual returns, capital gains and losses must be im puted to the individual owner of the property. If the spouses are under the community property regime (see Section H), capital gains and losses are imputed 50% to each spouse.

Deductions and allowances

Deductible expenses. Social security contributions may be de­ducted in computing taxable employment income for tax residents. In addition, the following reductions are allowed:

  • A standard reduction of EUR3,700 if a taxpayer’s annual net employment income does not exceed EUR11,250
  • A reduction of EUR3,700 less the result of multiplying 1.15625 by the difference between the net employment income exceed­ing EUR11,250 for net income between EUR11,250 and EUR14,450
  • A standard deduction of EUR2,000 if net employment income exceeds EUR14,450

These amounts may be increased for disabled taxpayers.

Contributions to a regulated pension plan reduce the tax base. The annual deduction is limited to the lesser of EUR8,000 or 30% of net employment income or business income. In addition to the deduction described in the preceding sentence, individuals whose spouses receive net earned income and income from busi­ness activities of less than EUR8,000 may deduct contributions of up to EUR2,500 from their tax base. Excess deductions may be carried forward for five years.

Interest expenses that do not exceed gross income, expenses necessary to produce income and charges for depreciation are deductible from rental income.

Nonresidents are generally not entitled to deduct any expenses.

Personal allowances. The allowances listed below reduce an indi­vidual’s tax liability by an amount resulting from the application of the progressive tax rates to the total allowances. They do not reduce the tax base. The following are the allowances.

Allowance Amount (EUR)
Personal allowance 5500
Allowance for taxpayers over 65 years of age 6700
Allowance for taxpayers over 75 years of age 6950
Allowance for handicapped taxpayer for whom the grade of disability equals or exceeds 65% 9000
Allowance for handicapped taxpayer for whom the grade of disability is less than 65% 3000
Allowance for handicapped taxpayer needing help with mobility 3000 (additional)
Each ascendant living with taxpayer whose annual income is less than EUR8000:
Over 65 years of age 1150
Over 75 years of age 1400
Each disabled dependent child or ascendant living with the taxpayer whose annual income is less than EUR 8000:
Individuals for whom the grade of disability exceeds 65% 9000 (additional)
Other disabled individuals 3000 (additional)
Each disabled individual needing mobility help 3000 (additional)
Each dependent child under 25 years of age living with taxpayer whose annual income is less than EUR8000:
First child 2400
Second child 2700
Third child 4000
Fourth child and subsequent children 4500
Allowance for children under three years old 2800 (additional)


Local governments may allow additional personal allowances and deductions.

Business deductions. Deductions are permitted for all expenses necessary to obtain business income and for the depreciation of assets related to business activities.

Rates. Total tax liability consists of the tax liability computed under the general rates plus the tax liability computed under the autonomous community rates. Consequently, the final maximum marginal rate depends on the marginal tax rate of the autonomous community where the taxpayer resides. For example, the maxi­mum marginal tax rate is 44% for an individual resident in Madrid and 48% for a resident in Cataluña.

Income derived by nonresidents is generally subject to a final tax of 24% (or 19% for residents of other EU member states). However, other rates may apply depending on the type of income. Dividends and other income derived from holding a participation in a company, interest and other income obtained from assigning capital to third parties are subject to tax rates of 19%, 21% and 23% (see Investment income).

See Special expatriate tax regime for details regarding the special tax regime for expatriates.

Credits. Tax credits are allowed in only a few specified circum­stances, such as for gifts to specified entities and for certain double tax relief.

In addition, an investment tax credit is available for amounts paid for the acquisition, maintenance, repair, restoration or exhibition of assets deemed to be of cultural interest. The credit is granted at a rate of 15% on a maximum expenditure of 10% of the tax­payer’s tax base.

The Spanish government removed the investment tax credit on the purchase of a taxpayer’s place of residence for residences acquired or to be acquired on or after January 2013. However, a transitional provision has been introduced for the granting of the tax credit for acquisitions or investments realized before 1 January 2013.

Under this transitional measure, the amount of investment eligi­ble for the tax credit on the purchase of the habitual abode is the amount effectively paid during the relevant fiscal year, including the mortgage payments. It may not exceed EUR9,040 per year. The principal residence must be retained by the taxpayer for at least three years after acquisition to qualify for the investment tax credit. The rate of the credit is 15%.

If spouses file separate returns, investment tax credits are applied to each spouse in proportion to that spouse’s ownership of the property to which the investment is directed. For spouses under the community property regime (see Section H), investment tax credits are imputed 50% to each spouse.

A tax credit is available for working mothers with a child up to three years old (up to a maximum of EUR1,200 per year per child), as well as for large families (three children or more).

Relief for losses. Relief for losses may be available, subject to the limits and conditions established by law.

Estate and gift tax

An individual resident in Spain for fiscal purposes is taxed on assets and rights acquired by inheritance or gift, regardless of where the assets or rights are located. If the recipient is not resi­dent in Spain, estate and gift tax applies only to assets located in Spain or to rights that may be executed in Spain.

Estate tax must be paid by the legal heir, and gift tax must be paid by the donee. The taxable amount for estate tax purposes is determined by deducting certain amounts based on the benefi­ciary’s age and on the relationship between the deceased and beneficiary. Tax payable is calculated by applying factors based on the taxpayer’s net worth, age, relationship with the deceased or beneficiary and type of asset.

Estate and gift tax rates vary depending on the autonomous region.

Social security

Contributions. Under Spanish domestic law, an individual must join the Spanish social insurance system if work and residence permits are received. Under Spanish domestic law, an individual must join the Spanish social insurance system if work and resi­dence permits are received. The rate of social insurance contribu­tions is 6.35% of salary for employees, and the rate for employer contributions is generally 30.15% of salary. For 2016, the maxi­mum base for employee contributions is EUR43,704. For 2016, the maximum annual contribution is EUR2,775.20 for employees and EUR13,766.75 per employee for employers.

Totalization agreements. To provide relief from double social security taxes and to assure benefit coverage, Spain has entered into totalization agreements, which usually apply for a period of five or six years, with the following jurisdictions.

Andorra                         Dominican Republic            Philippines

Argentina                       Ecuador                                Russian

Australia                        Japan                                    Federation

Brazil                             Korea (South)                      Tunisia

Canada                           Mexico                                 Ukraine

Cape Verde                    Morocco                              United States

Chile                              Paraguay                              Uruguay

Colombia                       Peru                                     Venezuela

Tax filing and payment procedures

The Spanish tax system operates through self-assessment. The tax year is the calendar year. Regardless of marital status, a taxpayer may file an individual return. Alternatively, family members may file one tax return that includes the income of the entire family. On a family tax return, the family members are jointly and sever­ally liable for the payment of tax. If one spouse has a tax liability and the other spouse has a refund, the spouses may offset each other’s amounts. Nonresidents with taxable income must file tax returns, unless they are subject to withholding tax for the entire amount due. However, individuals who have elected taxation under the special expatriate regime (see Section A) must file their returns during the period of 1 May through 30 June following the end of the calendar year.

Returns are usually filed from 1 May to 30 June following the end of the calendar year. Nonresidents must file tax returns within a month of the date when taxable income from Spanish sources is payable. In certain cases, nonresidents may file quar­terly tax returns.

For tax returns filed by residents, any tax due is payable with the return, and interest accrues on any unpaid balance. However, 60% of the tax may be paid in June, and the remaining 40% paid by 5 November, without interest accruing. The tax due is the balance remaining after subtracting amounts withheld during the year. If excess tax is withheld, the excess is refunded to the taxpayer.

Compulsory declaration of assets and rights located abroad. Royal Decree 1558/2012, published on 24 November 2012, establishes new requirements for tax residents of Spain to report details of their assets and rights located outside Spain.

Resident taxpayers who have assets or rights located abroad meeting certain conditions must file this information declaration by 31 March following the end of the tax year referred to in the tax return. Severe penalties may be imposed on non-compliant taxpayers.

Double tax relief and tax treaties

An individual resident in Spain may use foreign tax credits to avoid double taxation (imputation method).

Spain’s double tax treaties apply both the imputation and the exemption-with-progression methods. Spain has entered into double tax treaties with the following jurisdictions.

Albania                        France                             Pakistan

Algeria                         Georgia                           Panama

Andorra                       Germany                         Philippines

Argentina                     Greece                             Poland

Armenia                       Hong Kong SAR            Portugal

Australia                      Hungary                          Romania

Austria                         Iceland                             Russian

Azerbaijan                    India                                Federation

Barbados                      Indonesia                         Saudi Arabia

Belarus                         Iran                                  Senegal

Belgium                       Ireland                             Serbia

Bolivia                        Israel                               Singapore

Bosnia and                 Italy                                 Slovak Republic

Herzegovina               Jamaica                            Slovenia

Brazil                          Japan                               South Africa

Bulgaria                      Kazakhstan                      Sweden

Canada                       Korea (South)                  Switzerland

Chile                           Kuwait                             Thailand

China                          Latvia                              Trinidad and

Colombia                    Lithuania                         Tobago

Costa Rica                  Luxembourg                    Tunisia

Croatia                        Macedonia                       Turkey

Cuba                           Malaysia                          USSR*

Czech                         Malta                               United Arab

Republic                     Mexico                            Emirates

Dominican                  Moldova                          United Kingdom

Republic                     Morocco                          United States

Ecuador                      Netherlands                     Uruguay

Egypt                          New Zealand                   Uzbekistan

El Salvador                 Nigeria                            Venezuela

Estonia                       Norway                           Vietnam

Finland                       Oman

* Spain honors the USSR treaty with respect to the former Soviet republics.

Residence permits

A foreign national who wishes to reside in Spain must obtain a valid residence permit.

For a person who also wishes to work in Spain, the work and residence permits are issued on approval of the same application by both the Spanish labor and police authorities (see Section G). Consequently, the approval of one permit usually means the approval of the other and vice versa.

For a person who does not wish to work in Spain, temporary and permanent residence permits are available.

Temporary residence permits are issued to persons who wish to reside in Spain more than 90 days and less than 5 years. They are issued initially for one year and may be renewed for two periods of two years each.

If the temporary residence permit is issued as a result of a spouse holding work and residence permits, the validity of the residence permit is for the same duration as the spouse’s work and resi­dence permits.

Foreigners who have resided lawfully in Spain for a period of five years can apply for a long-term residence permit. However, the residence card must be renewed every five years. A residence card is automatically issued to persons living and working in Spain.

A regulation applicable to EU nationals, nationals of the European Economic Area (EEA), which comprises Iceland, Liechtenstein and Norway, and nationals of Switzerland provides for the right of freedom of movement, residence and work in Spain for these nationals. Partners appearing in an official register have the same rights as spouses.

EU nationals, EEA nationals and Swiss nationals, who wish to reside in Spain for more than three months, must go to the police station within the first three months after their entry into Spain and register in the Central Registry for Foreigners (Registro Central de Extranjeros). The police station issues a certificate that includes the name, nationality and domicile of the foreigner, his or her identification number and the date of the registration. This certificate replaces the identification card. To complete the registration, individuals must submit, among other documents, proof that they are working in Spain and that they have medical coverage similar to the public Spanish medical coverage.

Relatives of EU nationals, EEA nationals and Swiss nationals with a third-country nationality must apply for a special resi­dence card indicating that they are a relative of these nationals. They will have the same rights as other EU nationals, EEA nationals and Swiss nationals. However, for an individual to obtain a residence card, the marriage must be registered in an EU country’s registry. An exemption is granted to nationals of Austria, Denmark, Germany, the Netherlands, the Slovak Republic and the United Kingdom. Nationals of these countries are not required to register a marriage that took place abroad. These rights also apply to partners of EU nationals, EEA nation­als and Swiss nationals with a third-country nationality who are registered as partners in an official registration. A recent change in the Spanish regulations that entered into force on 16 December 2015 expands the beneficiaries of this special residence card to include partners with no legal bonds (among others). Nevertheless, the documents that will need to be provided to demonstrate the familiar bonds have not yet been regulated.

Work permits

Nationals of non-EU countries who wish to work and reside in Spain must apply for work permits.

Non-EU nationals may not work while their work permits are being processed. EU nationals are not required to apply for a work permit to undertake employment in Spain. Rules applicable to EEA nationals and to EU nationals also apply to nationals of Switzerland.

Effective from 1 January 2014, the Spanish immigration authori­ties, following EU rules, canceled the immigration restrictions on Romanian nationals who are employed workers. Consequently, Romanian nationals have the right to work and reside under the same terms as Spanish citizens or other EU nationals in Spain.

Croatia joined the EU on 1 July 2013. Spain maintained a two-year transitional period from 1 July 2013 through 30 June 2015 for Croatian nationals who were required to have a work permit during the transitional period. This transitional period has ended, and Croatian nationals are considered EU nationals with full rights to work in Spain.

Spanish authorities have adopted a restrictive policy regarding the issuance of work and residence permits to foreign nationals. This results from several factors, including the high unemploy­ment rate and the recent dramatic increase in the number of immigrants entering Spain, both legally and illegally, in the hope of obtaining Spanish, and ultimately European, citizenship. In accordance with this policy, Spanish authorities strictly enforce work permit requirements to encourage the hiring of Spaniards rather than foreign nationals. Specifically, the authorities strive to issue work permits only to foreign nationals who have special characteristics or who fall into one of the preference categories fixed by law.

A non-EU national who performs any economic activity in Spain, either as an employee of a Spanish company or as a self-employed individual, must obtain work and residence permits. Spanish law imposes steep fines of up to EUR100,000 for companies that hire foreign workers without valid work permits.

The same rules apply to self-employed foreign nationals and to those applying to work for a specific Spanish company. However, special permits exist for foreign nationals intending to start a busi­ness or for foreign companies wishing to establish subsidiaries headed by foreign nationals in Spain.

Types of work permits. Royal Decree 557/2011 provides rules for work permits under the Spanish immigration law. The most com­mon types of work permits are described below.

Work permits for local employees. Work permits for local em­ploy ees are issued for first-time applicants. They are issued for specific activities, employers and geographical areas (normally a Spanish province and its capital). The initial permit is valid for one year (unless the underlying labor contract is for a shorter period), but is renewable for an additional two-year period if no material change occurs in the conditions that led to granting the initial permit, including the applicant’s employment with a Spanish company and the absence of a criminal record. The re­newal is granted for specific activities and allows employment anywhere in the Spanish territory, regardless of the employer (provided that the employee has worked and contributed to the Spanish social security system for at least six months, as a gen­eral rule).

The application for renewal, which must be submitted during the 60-day period preceding the expiration date, follows an abbrevi­ated version of the original procedure (without interaction with the Spanish consulate in the country of origin). In most cases, renewals are granted routinely unless a material change in the permit holder’s status occurs.

After holding a work permit for local employees for three years, an individual can renew the permit for an additional two years. The renewed permit is valid in any activity or geographical area.

Temporary work permits. The various types of temporary work permits are described below.

Work permits may be granted for temporary, seasonal or cyclical activities having a maximum duration of 9 months within 12 consecutive months. These permits may not be renewed. They are granted for a specific employer and are not transferable.

Work permits are granted for other temporary activities, such as assembly of industrial plants and construction projects for

infrastructure, electricity networks, gas supply and railways. In addition, work permits are issued for temporary activities per­formed by top executives and professional sportspersons and for professional training. Temporary work permits for the activities described in this paragraph have a maximum duration of one year, require a written commitment from the applicant to return to the origin country and may not be renewed.

Self-employment work permits. Self-employment work permits are issued to first-time applicants for specific activities, employ­ers and geographical areas. These permits are granted for one year. They can be renewed for two additional years and afterwards for another two years.

Cross-border work permits. Cross-border work permits allow foreigners to work in Spain within the framework of cross-border services. This means that the employee of a non-EU company may apply for this permit to work in Spain for a client of his or her employer (a Spanish company) or for a subsidiary of the foreign company that is located within the Spanish territory. This permit is valid for one year and renewable for an additional year. If the foreign country and Spain have entered into a social secu­rity agreement, the work permit may have a duration equal to the period established in the social security agreement.

To qualify for a cross-border work permit, an individual must have been working for the company that posts him or her at least for nine months. The holder of a cross-border work permit must continue to belong to his or her home country’s social security system and must be paid by the foreign company.

The Spanish labor authorities may request a copy of the contract between the Spanish customer and the foreign employer or the assignment letter in the case of a subsidiary.

Special work permits for scientists. Special work permits may be issued to foreigners who are assigned to special research projects in Spain and fulfill certain conditions, such as entering into an agreement (convenio de acogida) with respect to the research project.

Students. Students may work in Spain if certain requirements are met.

Blue Card work permit. For some qualified employees (univer­sity degree of at least three years or five years of experience in the position), a Blue Card can be issued. The Blue Card allows the foreigner to do the following:

  • He or she may work and reside in Spain.
  • He or she may move freely for business purposes up to 90 days in EU territory.
  • After holding the Blue Card for 18 months, he or she may apply for a new Blue Card in another country of the EU if he or she fulfills the internal immigration requirements for the country.

The members of an employee’s family can obtain residence per­mits at the same time as the employee.

To work in Spain, the following conditions must be satisfied:

  • The employee is “highly qualified” (see Special immigration procedure for “highly qualified” employees, top executives, scientists and international artists).
  • The salary is at least 1.5 times the gross annual salary corre­sponding to the standard industrial classification in which the company is classified.
  • Persons in the Spanish labor market cannot fill the position.

This Blue Card has an initial period of one year, and it can be renewed for two periods of two years each. Subsequently, the foreigner can apply for an EU permanent residence permit.

Long-term work and residence permits. After holding a work permit for five years, an individual may request a permanent work permit, which is valid for an indefinite period. However, the residence card must be renewed every five years.

Other. With respect to the issuance of work permits, the Spanish unemployment rate is taken into account except in the following cases:

  • The employee is posted to a branch of the company.
  • The Spanish company has the required attributes for applying for the work permit at the Big Companies Unit (Unidad de Grandes Empresas, or UGE). UGE is the Spanish immigration office for large companies.

Special immigration procedure for “highly qualified” employees, top executives, scientists and international artists. Royal Decree 557/2011 now contains the expedited procedure for applying for work permits for the following types of applicants:

  • An individual holding a senior executive- or managing director-type position with the Spanish company
  • An individual holding a position that is “highly qualified”
  • Scientists and international artists

The following are the advantages of the special procedure:

  • The deadlines for the government bodies are much shorter than the normal procedure. The Immigration Office has only one month to grant or deny the work permit application and the Spanish consulate only has 10 days to issue the visa.
  • The relatives of the applicant can obtain the corresponding residence permits under the same procedure and within the same deadlines.
  • It is not necessary to file a certificate issued by the Spanish labor authorities providing the results of the search for a Spaniard to fill this position.

To apply for this procedure, the company or employer must sub­mit information specifying the estimated investment in its project and/or the number of job positions to be created and must provide documentary proof showing that the company fulfills one of the requirements listed below:

  • A payroll of more than 500 workers in Spain who are registered with Spanish social security
  • Annual report approved at the company’s general shareholders’ meeting, together with certification by an outside auditor, indi­cating that the company meets the threshold of net turnover of EUR200 million or stockholders’ equity in Spain of EUR100 million
  • Certification from the Investment Register of the General Subdirectorate for Foreign Investments proving that at least EUR1 million of the company’s capital is fully funded through foreign sources

Steps to obtain a work permit. Applying for a work permit in Spain is a lengthy process. In total, the procedure may take from 3 up to 12 months (except for the new immigration procedure applicable to highly qualified employees, top executives, scien­tists and international artists), depending on several factors. Each step of the application process is outlined below.

Employment Section – Government Delegation. An application for work and residence permits must be made before the applicant begins work in Spain. The applicant’s Spanish employer must file an Application for Work and Residence Permits (Solicitud de Autorización de Trabajo y Residencia) with the Employment and Social Issues Section of the applicable Government Delegation (Delegación de Gobierno – Área de Trabajo y Asuntos Sociales). This is a one-page application to which documents from the appli­cant and the Spanish company must be attached.

The following documents from the applicant must be attached to the application:

  • Copy of the applicant’s valid passport.
  • Applicant’s curriculum vitae.
  • Documents demonstrating that the applicant falls into one or more of the preference immigrant categories. Because the majority of the preferences are based on family relationships in Spain (that is, the applicant is descended from grandparents who were Spanish nationals by birth), these documents normally consist of certificates issued by the Civil Registry (Registro Civil). If a foreign official body issues the documents, the documents must be legalized with the Apostil of Hague Convention (under the Treaty of the Hague Convention, this is a stamp that all documents in one country must bear in order to be accepted as legitimate in another country) or the approval of the Spanish consulate in the country of origin. If necessary, the documents must be translated into Spanish (sworn translation).
  • University degree or proof of professional experience, if needed.

The following documents from the Spanish company must be attached to the application:

  • Two copies of the official work contract, signed by the compa­ny’s representative and the employee, with a special clause stating that the contract will enter into force when the work permit is granted.
  • Photocopy of the tax identification number of the company.
  • Power of attorney granted by the Spanish company to the indi­vidual dealing with the application on behalf of the company. This individual must also be an employee of the Spanish com­pany. This power must be inscribed in the Mercantile Registry.
  • A memorandum describing the Spanish company, including its characteristics, activities, offices and employees, if applicable. It is useful to emphasize the number of Spaniards employed by the company or plans to expand its Spanish workforce in the future. The memorandum must include a job description on company stationery and any relevant attachments emphasizing the special characteristics of the position, such as international or head-office experience, familiarity with head-office proce­dures and strategies, and language or technical capabilities. The purpose of this document is to demonstrate that a Spaniard with arguably similar qualifications cannot fill the applicant’s job.
  • Documents showing that the Spanish company is registered with the Spanish social security system, including Form A-6 (Inscripción en la Seguridad Social) and Forms TC-1/TC-2 (Boletines de Cotización) for the last three months paid. The Spanish immigration authorities can check these documents under new rules.
  • Certificates from the tax and social security authorities proving that the company has no tax or social security liabilities.
  • A certificate issued by the Spanish labor authorities providing the results of the search for a Spaniard to fill this position (unless the applicant is in one of the preference immigrant categories established under Spanish law).
  • Any other documents or materials specifically requested by the labor authorities.

If it is intended that the applicant hold a senior executive- or managing director-type position with the Spanish company, the following documents should also be included:

  • A notarized declaration of the executive’s position and authority
  • A certificate describing the relationship between the executive and the company (for example, member of the board of directors)
  • Evidence of the company’s inscription in the Mercantile Registry

In the event of a cross-border services situation, it is also necessary to file the services contract between the two companies (the for­eign employer and either the customer or the subsidiary) and the proof of existence of the labor relationship between the applicant and the foreign company, specifying the exact length of the ser­vices, the professional category of the applicant as well as the labor conditions of the position. In addition, the Spanish authorities may also require a copy of the individual’s social security certificate of coverage, if applicable.

The application, together with all of the documents mentioned above, must be filed with the Spanish office dealing with foreign issues that is located where the Spanish company has its regis­tered office. If a foreign official body issues the above docu­ments, they must be legalized. A Spanish translator must prepare certified translations of the documents if they are not in Spanish. If any of the documents are missing or incomplete, the applicant normally has 10 days to provide the missing materials.

Spanish consulate. After the labor authorities analyze the appli­cation and assuming that they issue a decision approving the grant­ing of the work permit, the Spanish company (employer) receives a written notification. Beginning on the date of receipt of notifi­cation, the applicant has one month to file an application for the corresponding visa at the Spanish consulate in the country where the applicant lives if he or she does not have legal residence in Spain. If the applicant is already in Spain as a non-working legal resident, the initial application may be made directly to the Spanish labor authorities; however, the applicant may not stay in the country beyond the maximum period corresponding to the terms of his or her residence visa.

At the Spanish consulate, applications must be made in person through the presentation of the following documents:

  • The notification from the labor authorities granting the work permit.
  • A completed Visa Application form (Solicitud de Visado), which is available from the Spanish consulate. In filling out this form, it is important to state that the purpose of the visit is “To work for the company (full name) in Spain,” and to provide a local address and phone number in the country where the appli­cant can be contacted in the next few months if the visa is granted.
  • One copy of the employment contract, previously stamped by the labor authorities in Spain.
  • The applicant’s valid passport.
  • A certificate stating that the applicant does not have a criminal record, issued by the authorities of the home country or countries where the individual has resided with a legal permit during the last five years. Such certificate cannot be issued in certain coun­tries. However, in the United States, for example, a certificate may be obtained from the city or town where the applicant resides.
  • Four passport-size photographs.
  • A medical certificate from the country of origin or from Spain if the applicant is already residing in Spain. No prescribed form exists for this certificate, but the certificate should meet the following conditions:
  •  It shows the title of “Medical Certificate.”
  •  It clearly and fully identifies both the doctor and the appli­cant.
  •  It certifies that the doctor has examined the applicant and that the examination included a laboratory test.
  •  It certifies that, based on this examination, the applicant shows no physical or mental defect, no disease or disability, no abnormalities in the chest X-ray, no evidence of abnor­mal mental conditions, no addiction to, or use of, toxic substances and no contagious diseases.
  •  It is signed and dated by the doctor.

If the above documents are not in Spanish, they must be accom­panied by certified translations prepared by an official Spanish translator.

In general, an applicant must bring two photocopies of each of the above documents and request legalized copies. However, the consular officials have considerable autonomy in determining the particular documents and the number of copies that an applicant must submit.

The work and/or residence visa must be obtained from the Spanish consulate where the original Request for Visa form was filed. Depending on the practice of the consulate, the applicant is notified either by telephone or in writing when the visa is avail­able. This occurs within a period of 10 days to 3 months. Consequently, the applicant should check periodically with the consulate to see if his or her visa is available.

The Spanish consulate can require the applicant’s presence and a personal interview.

If the Spanish consulate grants a visa, the applicant must go to the consulate to pick up the visa within 30 days. After obtaining the visa, the individual should enter Spain within the following three months (this period should be always checked with the consulate).

Provincial Directorate of the Police. If labor authorities grant a work permit, they transmit the applicant’s materials to the Provincial Directorate of the Police, for the processing of the residence permit. The applicant’s employer is also notified of certain administrative costs that must be paid to the Economy and Finance Ministry.

If the work permit is denied, an appeal may be filed with the Ministry of Labor and Social Issues and, if necessary, with the courts. In practice, it is difficult to have a denial of a work permit overruled on appeal.

On receiving the applicant’s materials from the labor authorities, the Provincial Directorate of the Police analyzes the application and can request additional materials before agreeing to issue a residence permit.

After an applicant enters Spain with the relevant visa, the company has three months to register the employee at the Social Security office. Within a month after registration at the Social Security office, or the entry of the foreigner in the case of a cross-border work permit, the applicant must go to the Provincial Directorate of the Police to pick up the work and residence permits through the corresponding residence card with a Foreign Number already assigned. The applicant is normally required to bring the following items:

  • The original letter from the labor authorities notifying the appli­cant of the approval of the work permit
  • The applicant’s passport with the visa stamp
  • Three passport-size photographs of the applicant
  • The original Application for Work and Residence Permit form presented to the labor authorities
  • An invoice establishing that the required fees have been paid to the Economy and Finance Ministry

In addition to the above, town hall registration might be compul­sory to proceed with the fingerprinting and residence card issu­ance.

Practical considerations. The following should be considered when sending a foreign national to work in Spain:

  • If the foreign national falls into any of the preference categories (see Factors evaluated in granting permits), this could enhance to a considerable degree the likelihood of the granting of the required permits.
  • It should be determined whether family members who will also need residence permits will accompany the foreign national to Spain.
  • The foreign national must make the initial application for a residence visa in person at a Spanish consulate in the country of origin. The foreign national may file the visa application and enter Spain on a tourist visa while the work and residence per­mits are being processed, as long as he or she does not for­mally begin to work in Spain until the permits are obtained. After the visa is available at the consulate, the foreign national must appear there in person to have the visa stamped in his or her passport, which allows the foreign national to enter Spain and request the corresponding residence card from the police authorities within the following 30 days.

Factors evaluated in granting permits. In evaluating whether to issue work and residence permits to a foreign national, the Span­ish authorities tend to consider several de facto circumstances as well as other factors established under law.

The de facto circumstances considered by the authorities vary from case to case, but generally include an analysis of the following:

  • The reciprocity accorded to Spanish nationals with respect to granting work and residence permits in the applicant’s country of origin
  • The number of Spaniards employed by the Spanish company intending to hire the applicant
  • The Spanish company’s plans for the future expansion of its business and its workforce

The Spanish authorities must take into account whether an appli­cant falls into one of the following preference categories estab­lished under law. Specifically, the authorities are required to grant favorable treatment to an applicant who meets any of the following conditions:

  • He or she was born and is legally residing in Spain.
  • He or she has dependent Spanish ancestors or descendants.
  • He or she previously had Spanish nationality and now intends to reside in Spain.
  • He or she is descended from parents or grandparents who were Spanish nationals by birth.
  • He or she is a national of a Latin American country, Andorra, Guinea or the Philippines, or is Sephardic.
  • He or she is the spouse or child of a foreign national who holds work and residence permits, especially if the permits are valid for longer than two years.
  • He or she is directly related to an officer or director of the Spanish company for which he or she is working (except for domestic help).
  • He or she holds a senior executive or managing director position with the Spanish company or is considered an important employ­ee of the company.
  • He or she has a permanent residence permit or has resided legally in Spain for the past five years.
  • He or she has been granted political asylum less than one year before the permit is applied for.
  • He or she is qualified to assemble or repair imported machinery or equipment.
  • He or she is a director of the company with a power of attorney to sign on behalf of the company.
  • He or she is a “highly qualified” employee (see Special immi­gration procedure for “highly qualified” employees, top execu­tives, scientists and international artists).
  • He or she is a famous artist.

Types of permits under Law 14/2013, in support of entrepreneurs and certain others

Law 14/2013, which is a new law for encouraging investments in Spain, entered into force on 30 September 2013. Several changes to the rules for visas and residence permits came into force on 29 July 2015. They significantly reduce the administrative and financial requirements for obtaining a Spanish visa under Law 14/2013. Key changes include allowing individuals who did not qualify previously to qualify for visas as dependents, and simpli­fied procedures for intracompany transfers.

Among other measures, the law provides that the Spanish govern­ment may grant residence visas to the following types of foreign­ers:

  • Entrepreneurs
  • Highly qualified professionals
  • Researchers
  • Employees with intercompany transfers

Foreigners who prove that they belong in one of the categories listed above and who wish to reside in Spain may request a resi­dence visa if they fulfill all of the following conditions estab­lished in the law:

  • They are not illegally residing in Spain.
  • They are more than 18 years old (Spanish full age).
  • They do not have a criminal record.
  • They are not rejectable by jurisdictions with which Spain has entered into an agreement.
  • They have medical insurance with an entity authorized in Spain.
  • They have enough economic resources to support themselves and their family members (if applicable).
  • They pay the government fees.

The new law considers the following investments:

  • Investment of EUR2 million or more in public debt
  • Investment of EUR1 million or more in Spanish company shares or Spanish bank deposits
  • Real estate with a value of EUR500,000 or more without any mortgage on this amount
  • A business project to be developed in Spain that can be consid­ered of general or public interest, taking into account the cre­ation of jobs, the technology and scientific innovation of the project and its socioeconomic impact in Spain

The law establishes the manner for proving the investment.

The corresponding Spanish consulate grants the visa for a year. If the foreigner wishes to reside in Spain for a longer period, a residence permit can be requested from the Spanish immigration authorities in Spain.

For these residence visas, the Spanish immigration authorities take into account the business plan, the professional profile of the foreigner and possible benefit to Spain from the economic oppor­tunity.

The law also establishes a residence visa for highly qualified employees to be assigned to a Spanish company belonging to the

same group of companies (Intracompany Residence Permit [Autorización de Residencia por Traslado Intramepresarial]) and for senior executives or managing director-type individuals (highly qualified professionals) involved in general interest proj­ects for Spain (Autorizaciones de Residencia para Personal Altamente Cualificado).

The Spanish company needs to fulfill some requirements that are less demanding than the requirements included in Royal Decree 557/2011 (see Section G).

A new residence permit is available for some research, develop­ment and innovation projects for Spanish public or private insti­tutions, subject to certain requirements.

In general, this new law establishes easier processes and shorter deadlines to obtain these types of residence visas and permits than under the normal immigration rules. As a result, the immi­gration process will be expedited for foreign companies and individual investors making investments and engaging in profes­sional activities in Spain. The following are some of the advan­tages of the new types of permits in comparison with the permits established in the immigration law:

  • The law provides for shorter processing times for obtaining the work or residence permit. The current processing times are 20 business days, while the regular procedure takes 30 business days.
  • The law provides for shorter processing times when applying for the residence visa at a Spanish consulate overseas, never exceeding 10 business days.
  • In some cases, bypassing the visa application process is possi­ble if the work permit applicant is in Spain legally at the moment of the work permit application. This is determined on a case-by-case basis.
  • Family applications can be made simultaneously with the prin­cipal application or at a later stage.
  • The residence visa or permit allows work in Spain, according to EU Directive 2011/98 of 13 December 2011.

Recent changes include the following:

  • The applicant can directly apply for a residence permit without prior visa approval, provided that he or she is legally present in Spain.
  • The granting of a visa also allows the individual to work in Spain without any further approval required.
  • The applicant can now file the application through a legal rep­resentative. Previously, the applicant was required to file the application in person.
  • The eligible investments for an investor visa are extended to include closed-end funds or venture capital funds established in Spain.
  • It must be certified that the investment has been carried out at least 1 year before the application, rather than the 60 days that was previously specified.
  • When purchasing real estate, the applicant can apply for the visa or residence permit even if he or she has not formally completed the purchase, provided that a contract of deposit exists. However, in this case, the visa will have a maximum duration of six months.
  • In other cases, the initial validity period is for two years. If the initial conditions continue to be met, the period for subsequent renewals is five years instead of two years.
  • For applications for residence for highly skilled professionals, employers must now demonstrate compliance with the thresh­olds for access to the Spanish immigration authorities only once. This is then recorded for subsequent applications for three years.
  • It is now possible to submit a renewal application within 90 days after the expiration of the initial authorization (before this change, the deadline was 60 days before the expiration date).
  • For intracompany residence permit applications, the changes conform to EU legislation, allowing transfers of non-EU nationals with valid intercompany transfer permits from other EU countries.

Family and personal considerations

Family members. Family members must obtain residence permits if they intend to accompany a foreign national to Spain.

The working spouse of a foreign national does not automatically receive a work permit, unless the person is a Blue Card holder or the application is filed in accordance with the Law 14/2013 regu­lations. He or she may file jointly with the foreign national or independently if he or she wishes to obtain a Spanish work per­mit.

It is possible to apply for a regrouping visa if the applicant’s spouse has a one-year residence permit that has been renewed for four additional years.

It is also possible to apply for a Non-Lucrative Residence Permit if the applicant can prove that he or she has a monthly financial support of at least 400% of the Public Income Indicator of Multiple Effects (Indicador Publico de Renta de Efectos Múltiples, or IPREM). IPREM is a Spanish economic index. For 2016, IPREM equals EUR532.51 per month (it may change each year).

Marital property regime. The community property regime applies to couples who solemnize their marriages in Spain or in other countries. Couples may elect out of the regime by following specified legal procedures. The community property regime ap­plies to all interests arising during the marriage. Prop erty owned before the marriage remains separate.

In several autonomous communities within Spain, the mandatory marital property regime is the regime of separate property.

Forced heirship. Forced heirship rules in Spain require that direct lineal descendants inherit at least two-thirds of a deceased’s estate, regardless of the provisions of the will.

Driver’s permits. A foreign national may drive legally in Spain with his or her home country driver’s license for six months. Require­ments for driver’s license reciprocity in Spain vary, depending on the country of origin of the foreign national.