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Will remote working become the norm in Spain after the Covid-19 pandemic?

The number of job vacancies in Spain which involve working from home has risen by more than 200 percent, with experts suggesting it’s a “structural change that’s here to stay”. But will Spain really become a nation of remote workers after Covid?

Will remote working become the norm in Spain after the Covid-19 pandemic?
Stock photo: Peggy Anke/Unsplash

From May 2020 to April 2021, the number of jobs advertised online in Spain which included the option of remote working increased by 214 percent, according to the latest study by Adecco, “Remote Work in Western Europe”. 

“People want to work remotely and companies are responding to this demand by making remote work opportunities clear in their job offers,” Adecco reported.

The trend was particularly marked in central and western areas of Spain, but all fifty provinces except Soria have recorded an increase in this kind of job listings. 

The jobs which have seen the biggest rise in remote work offers are call centre positions, in accounting, admin, real estate and various IT roles.  

The study – which analysed data for Spain, Germany, the Netherlands, France, the United Kingdom and Italy – found that the increase in offers was more pronounced in Spain than the average rise in Western Europe of 126 percent, although France recorded the biggest hike in teleworking offers with a 463 percent increase.

“The pandemic has accelerated a change that was already in force,” Adecco contended based on the fact that remote working vacancies were already on the rise in 2019.

Are Spanish employers really looking to employ remote workers?

As a result of the full lockdown in March 2020, the total number of people in Spain who worked at least occasionally from home doubled, exceeding 3.5 million people.

That represented around 16 percent of Spain’s working population, but Adecco estimates that approximately 36 percent of jobs on the market could be carried out entirely remotely. 

In the second term of 2021, around 9.4 percent of employed people in Spain (1.8 million people) worked from home at least half of their weekly work hours.

Fluctuations aside, one important stat to keep in mind is that despite the big rise in Spanish job vacancies offering remote working options, they still only represent 0.3 percent of the total. 

On average across Western Europe, jobs involving work from home account for 12 percent of total vacancies, so Spain still has a very long way to go. 

According to Javier Blasco, director of Spain’s Adecco Group Institute, the difference lies in the fact that the productive fabric of other countries is much more geared towards teleworking and, compared to very advanced economies centred around telecommunications or banking, Spain’s economy is mainly service based.

“The Spanish economy is very much based on the face-to-face model and in recent months the sectors that have grown the most in employment are education, health, transport … there are few possibilities of working from home,” Blasco told El País.

“It’s not better or worse, it’s simply that in Spain there is a very strong face-to-face work culture”.

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Nevertheless, the world’s second largest Human Resources provider reports that Spain’s remote working trend will continue growing, concluding that “it’s a structural change that is here to stay”.

The fact that in September 2020 the Spanish government began to regulate by law remote working practices is a positive sign that what was once an uncommon job scenario is now widely accepted and protected. 

Eased Covid restrictions and Spain’s advanced vaccination campaign have already meant that many employers have asked workers to return to their workplaces at least part-time over the course of 2021.

But the real test will come in September by which stage Spain will have reached its initial herd immunity target of 70 percent and the so-called “return to normality” will become more of a reality. 

There are arguments for and against remote working both in Spain and abroad, from the possibility of repopulating empty Spain with remote workers and increasing productivity by slashing long coffee and lunch breaks, to those who say a lack of face-to-face interaction with colleagues is unhealthy and not as useful for young workers.

From the point of view of our international readership, flexible work options are what often allows many of them to find the work-life balance they were after in Spain and to be able to visit their home countries more easily and frequently.

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What you need to know about investing in index funds in Spain

Index funds are considered a safer and more passive way of investing for those with little financial knowledge. However, understanding what they are, the best funds available, and how they're taxed in Spain is key before investing your money.

What you need to know about investing in index funds in Spain

What are index funds?

According to a basic definition by Banco Santander, “index investment funds are collective investment undertakings whose investment policy strives to mimic a certain index.”

What does that actually mean? And what is being mimicked here? Let’s look at an example. An index fund tracking the Vanguard Global Stock Index, for example, will put together an asset portfolio that essentially mirrors, or is similar to, at least, the Vanguard portfolio, in terms of composition. 

So that means that if the Vanguard Index has any major changes in terms of portfolio makeup, the fund manager (more on the best of those in Spain below) changes your index fund to reflect that change.

Often in Spain index funds would be linked to the IBEX 35, Spain’s main stock exchange, but many people invest in regional or global funds too. Besides that, index funds basically function in the same way as other funds: the money in the fund is used to buy and sell assets to make profit.

Generally speaking, the benefits of index fund investing are their low cost, the little financial knowledge and time investment required from the investor, and their diversification. The drawbacks are the lack of downside protection when there are losses, the lack of choice in index composition, and the fact that your investments can’t ‘beat’ the market.

READ ALSO: The best high-yield savings accounts in Spain

How profitable can index funds be?

Owing to the fact that the entire point of index funds is to mimic a particular index, the way we think about profitability is slightly different than with other forms of investment.

In that sense, there’s really no such thing as a ‘good’ or ‘bad’ index fund based on its performance. How well the index fund performs is better thought of as how well it replicates the index it is supposed to be mimicking.

According to Rankia, a Spanish investment service and comparison site, index funds vary wildly in terms of returns, but compound annualised returns ranging from as low as -40 percent in the worst case examples to 55 percent profits in the best.

Obviously, how much you make in cash terms depends on the size of your original investment in the fund.

Can you invest in foreign index funds in Spain?

Yes, you can. In fact many people do, and fund managers often recommend doing so.

In Spain, the main fund managers that offer index funds include iShares, EBN Bank, Amundi, Vanguard, Pictet, Bankinter, Caixabank, BBVA, and Credit Suisse.

Which are the best index funds to invest in from Spain?

Most index funds are grouped on a regional basis, so there are several funds that mirror European markets, North American markets, the Pacific region markets, and so on, as well as broader global index funds.

According to Rankia, some of the best global index funds to invest in from Spain include:

Fidelity MSCI World Index Fund P-ACC-EUR
Total Expense Ratio (TER): 0.12 percent
3-year return: 11.73 percent

Vanguard Global Stock Index Fund EUR Acc
TER: 0.18 percent
3-year return: 11.63 percent

Amundi Index MSCI World – IE (C)
TER: 0.19 percent
3-year return: 11.51 percent

Vanguard ESG Developed World All Cap Equity
TER: 0.20 percent
3-year return: 9.29 percent

Vanguard Global Small-Cap Index Fund
TER: 0.29 percent
3-year return: 7.37 percent

Amundi Index FTSE EPRA NAREIT Global – AE (C)
TER: 0.34 percent
3-year return: 3.17 percent

How are index funds taxed in Spain?

Under the Spanish tax system, index funds are taxed as savings income as part of the IRPF (Spain’s income tax) and are included as capital gains and losses, as if they were any other type of stock market shares or investment product.

However, one of the advantages of index funds over other forms of investment is that if you sell one index fund in order to buy another, you don’t pay for the capital gains obtained because it is considered a transfer from one fund to another and is therefore exempt from taxation.

This makes it one of the best investment options if you want to get a higher return on your earnings via compound interest because you can take advantage of these capital gains to reinvest them instead of paying them in taxes.

As index funds in Spain are taxed in the same way as any other investment products that is subject to savings rates, they are taxed at the following rates:

19 percent for capital gains of less than €6,000

21 percent for capital gains between €6,000-€50,000

23 percent for capital gains in excess of €50,000

READ ALSO: Bank overdraft in Spain: What are the risks and penalties?

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