U.S. Social Security Ruling Impedes U.S. Digital Nomad Visas in Spain

The U.S. Social Security Administration (SSA) is denying certificates of coverage to American digital nomad visa applicants in Spain. These applicants are employees of U.S. companies who want to work remotely from Spain. The SSA argues the existing Totalization Agreement with Spain, meant to prevent double social security contributions, only applies to temporary international assignments, not digital nomads.

Spain and the U.S. have this agreement in place to ensure workers only contribute to one social security system at a time. However, the U.S. interprets it as excluding digital nomads applying for visas to work in Spain, limiting it to those on temporary relocation.

This interpretation differs from how other non-EU countries with Totalization Agreements handle the situation. Social Security agencies in countries like Colombia and Mexico issue the required certificates. These certificates confirm the employee maintains legal social security coverage in their home country during the visa period, satisfying a key requirement for the Spanish visa.

In essence, the U.S. interpretation creates a hurdle for American digital nomads seeking Spanish visas, while other countries facilitate the process.

What is Spain’s digital nomad visa and what is it for?

The digital nomad visa is an authorisation for non-Spanish, non-EU citizens who want to work remotely in Spain for a company located outside of the country. This must be exclusively completed through a computer, laptop, or other digital means.

The Spanish Digital Nomad Visa offers location independence within the country, allowing holders to work remotely from anywhere in Spain. However, there are limitations on who they can work for. Employees cannot be employed by Spanish companies or clients. Freelancers, on the other hand, have some flexibility. They can work with Spanish clients, but that work must be limited to 20% of their total workload.

To qualify for this visa, applicants must demonstrate either a relevant graduate or postgraduate degree from a reputable institution or a minimum of three years of professional experience.

The following family members of the digital nomad 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

Securing a Spanish digital nomad visa hinges on submitting several documents, with a Certificate of Coverage being a crucial piece. This certificate acts as a formal declaration. It signifies the applicant's commitment to fulfilling social security obligations in their home country before starting work in Spain.

Why is the U.S. making things difficult for American digital nomads in Spain?

A key agreement between Spain and the U.S. aimed at streamlining social security contributions (Totalization Agreement) is causing headaches for American digital nomad visa applicants. The U.S. interprets the agreement as only applying to temporary work assignments in Spain, not remote work via a digital nomad visa.

This interpretation by the U.S. prevents them from issuing the required Certificate of Coverage, a crucial document for the visa application. As a result, American employees wanting to live in Spain and work remotely for U.S. companies face a significant hurdle. Currently, the only solution seems to be for U.S. companies to comply with social security obligations in both countries, which is a major obstacle for many. This situation restricts American workers' ability to enjoy the flexibility of the Spanish digital nomad visa programme.

Spanish Minister announces new Social Security Agreement

The U.S. Social Security Administration's interpretation of the Totalization Agreement throws a wrench into Spain's plan to attract American digital nomads with tax benefits like the "Beckham Law." As previously mentioned, complying with Spanish Social Security requirements remains a major hurdle for these applicants.

In a bid to aid U.S. employees seeking relocation to Spain under the digital nomad visa programme, the Spanish Minister of Inclusion, Social Security and Migration announced a newly signed Social Security Agreement with the United States. This agreement aims to boost international labour mobility and the flow of insured workers between both countries.

While official details haven't been released, the Minister hinted at key changes impacting how Spanish pensions are calculated. Additionally, the expectation is that the agreement will broaden the scope of the Totalization Agreement to explicitly include international remote workers. This inclusion would significantly streamline the visa process for digital nomads and expand their application possibilities in Spain.

CELIA Alliance member firm Ceca Magan contributed to this article. For further information or to discuss any of the issues raised in this article, please contact us to speak to one for our experts.