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SPAIN AND THE US

Spain and the US sign new pensions and social security agreement

The Spanish government has made an agreement with the United States to improve pensions calculations and social security protections for workers who have worked and spent time between both countries.

Published: 9 April 2024 11:44 CEST
Spain and the US sign new pensions and social security agreement
U.S. Ambassador to Spain Julissa Reynoso and Spain's Minister of Inclusion, Social Security and Migration Elma Saiz. Photo: Ministry of Inclusion, Social Security and Migration

Spain and the United States have signed a new agreement that improves the way in which pensions are calculated and extends social security protections for people who have lived and worked in both countries.

Spain’s Minister of Inclusion, Social Security and Migration, Elma Saiz, presented the agreement with U.S. Ambassador to Spain, Julissa Reynoso, at the formal signing on Monday.

The new deal updates the first bilateral agreement between the two countries, signed back in 1986 and in force since 1988.

Americans are increasingly moving to Spain to live, and the relaxed pace of life and relative affordability compared to many parts of the U.S. attracts pensioners in particular. In late 2022 there were 41,953 US nationals officially residing in Spain, according to Spain’s national statistics agency (INE).

READ ALSO: Where in Spain do all the Americans live in 2023?

The new deal will also benefit many of the hundreds of thousands of Spaniards living in the US. The United States is the third country in the world with most Spaniards living there, behind Argentina and France. As of 2023 there were 192,766 Spaniards living in the U.S, according to INE figures. 

At the signing, Saiz said that “thirty-six years after the signing of the first agreement, we are taking another step forward in promoting international labour mobility, which will undoubtedly be a powerful lever to continue stimulating our bilateral economic activity.”

The Minister emphasised that the deal will have an “impact on the lives of hundreds of thousands of workers”. Among the changes, the new agreement allows for the easier application and implementation of social security benefits in the two countries, eliminates coverage duplication, provides relief from double taxation and avoids gaps in the social security system for many workers.

According to a government statement: “The main changes included in the new text effect, firstly, the calculation of Spanish social security pensions, which will be more beneficial. From now on, there will be two pension calculations. The first will be based solely on contributions in Spain, and the second will add the time contributed in the United States.”

After comparing the two calculations, the more favourable one will be paid. This benefits pensioners, the government says, because “until now, if you were entitled to a pension only with contributions in Spain, the benefit was paid without the second calculation being made by adding the contributions in the United States, even though it could have been higher.”

“In addition, the calculation of the regulatory base for benefits has been improved when contributions from Spain and the United States are added together, based on the actual contribution bases prior to the last working day in Spain.”

This will especially impact those who spent the latter part of their working lives in the United States.

The agreement also makes improvements for self-employed workers abroad, and extends the period for self-employed and employed workers posted abroad to 5 years, extendable by a further 2 years in exceptional circumstances and subject to authorisation by the relevant social security system.

It also includes civil service and military pension schemes in the scope of the agreement.

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VISAS

EXPLAINED: When you can exchange visas in Spain

There are several different types of visas and residency permits you can get to be able to live and work in Spain, but what happens when your situation changes and you want to exchange your visa for a different one?

Published: 30 April 2024 14:20 CEST
EXPLAINED: When you can exchange visas in Spain

There are many different reasons you may want to exchange the type of visa or residency permit you have. Perhaps you’re on a student visa and have completed your studies, but still want to be able to stay in Spain. Or maybe you’ve been on a one-year non-lucrative visa, but can no longer afford not to work and want to exchange it for one where you’re allowed to work. 

Read on to find out which visas are possible to exchange and which are not. 

Student Visa to Digital Nomad Visa 

The simple answer is yes, it is possible to exchange your student visa for the new Digital Nomad Visa (DNV) that first became available last year. This will, however, depend on your individual circumstances and what job you plan on doing.

Firstly, in order to apply for DNV you must either have a degree from the field you want to work remotely in or have three years’ work experience in that industry. If you’ve just finished your studies this could be possible, but if you were studying something different, it could prove difficult.

If you are an older student, you could definitely have three years’ work experience in the industry you want to work in or you may have gained the experience working part-time in Spain while on your student visa.

Secondly, you must make sure you have worked for the company that hired you for a remote role for a minimum of three months before you apply for the DNV. The main caveat is that the company has to be registered outside of Spain as you are not eligible for the DNV if more than 20 percent of your income comes from inside Spain. This means that you will have to secure a remote job in another country while still on your student visa, making sure that you stick to the 30 hours a week you’re allowed to work.

Non-Lucrative Visa to Work Permit or Self-Employed

Being in Spain on the Non-Lucrative Visa or NLV can prove to be expensive because you’re not allowed to work, but have to prove you have a significant amount of savings or passive income. If you want to stay in Spain, beyond the initial year, you may be considering a different residency permit. Luckily, you can exchange it for a work permit or self-employed permit in a process called residence modification.

During your last few months on the non-lucrative visa, you are able to apply for jobs in Spain, which may give you the possibility of being granted a work permit. There are many prerequisites, including having lived in Spain for a year and being offered a pre-employment contract.

You could also decide to become self-employed at set up your own business. In order to do this you will need to meet the requirements that current legislation requires for opening and operating your chosen business. You will also need to sign up to the autónomo system, pay your own social security fees and submit your taxes five times a year.

READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?

Student Visa to Work Permit or Self-Employed

If you’re living in Spain on a student visa, then it’s relatively straightforward to exchange it for a work permit or become self-employed, if you want to be able to stay longer. The main requirement is that you have to have lived in Spain for three consecutive years, before you exchange it. This means, it’s really only possible for those who are doing a long-term course, such as a degree at a Spanish university. If you’re simply here for a year doing a language course, then it won’t be possible.

If you have been here for three years on a student visa, you have two options – the first is to find a job and become an employee by getting a work permit and the second is to become self-employed. If you opt for the first, the easiest way is to get a job offer and apply for the permit that way. Because you’ve already had a student visa and been here three years, it will be easier for companies to hire you as they won’t have to prove that there isn’t anyone from Spain or the EU that can do it first or that they have a shortage of professionals who can carry it out.

If you want to exchange it for a self-employment permit, you will have to present a business plan in order to get approval and prove you have the correct qualifications and experience to carry it out. If approved, then you will typically sign up to the autónomo system.

Student Visa to Entrepreneur Visa

Student visas are the easiest visas to modify in Spain, meaning you have many different options to exchange them if you want to stay longer. The Entrepreneur Visa – Visado de Emprendedor is another option that will allow you to stay for a period of three years (with the option of exchanging or extending). It is, however, slightly more complicated to exchange to than simply getting a work permit or becoming self-employed.

The Entrepreneur Visa is especially for those who want to set up a business considered to be innovative with a special economic interest for Spain. Unlike becoming just an autónomo, you must agree to be able to create employment opportunities for locals in the future. You could also in theory exchange your NLV for an entrepreneur visa too, provided you can prove that you haven’t done any work while you’ve been living in Spain for the year on your NLV.

Non-Lucrative Visa to Digital Nomad Visa

Unfortunately, this exchange is not possible. The main issue is that you’re not allowed to work while on a NLV and the requisites of the DNV are that you must have worked for the company that hired you for a remote role (or your clients if you’re self-employed) for a minimum of three months before you apply.

If this is the case then you’ll be admitting that you were working while on your NLV, which could get you into trouble. This means will have violated the terms of your visa and will be highly unlikely to be granted another one. You may also face penalties and fines, depending on your circumstances.

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