Work for a U.S. Company while living in Spain

@chasleslieb

Certain categories of visa/residence do not have permission to work (NLV specifically). That would definitely preclude working in Spain, for a Spanish employer. However, working remotely, in Spain, for an overseas employer, is a bit of a grey area. If I had a great job offer, I would personally take it. But some might feel that it's a bit naughty. Many NLVs do the digital nomad thing, so I doubt it's a big deal. Indeed, many would say that being able to keep foreign employment, at a foreign salary, while relaxing on a Spanish beach and enjoying its sunshine and a low cost of living is pretty much ideal. :-)

However, nothing about your residence status says that, if you can work, you must... or, if you do work, that you have to be an employee in that country (although it's typical, of course).

A USA company can pay you as an independent contractor or as an employee. In either case, they should treat you as any other contractor/employee and make the appropriate deductions and declarations. (Unless they have a Spanish subsidiary, in which case, you probably should be a Spanish employee.)

However, as you'd expect, you now have an additional source of income that you should be reporting to the Spanish tax authorities. You probably should be doing dual income tax filings anyway by virtue of your tax residence status (Spanish by physical residence, USA by passport/citizenship), so I'd guess it's not especially onerous to add this employment income.

Alternatively, I'd imagine you could (if you wish to, and you have a non-NLV visa/residence that does allow you to work) set yourself up as "autonomo" (self-employed) in Spain and make your local deductions/declarations based on your work income, while your US "employer" treats you as an independent contractor (hopefully, paying you without any deductions). This might have some advantages in terms of Spanish pension and Spanish social security/healthcare.

Thank you for your response.

The NLV is not an issue in this particular case as the visa being considered is a resident visa.

So my understanding from what you say, there is no legal obstacle to being employed by a U.S. company while living in Spain, and that as long as there is no Spanish subsidiary or physical presence of the company in Spain then the company is not obligated to make any contributions to Spanish social security or other deductions that may required by a Spanish employer.

The U.S. company would apply the required social security and IRS withholdings as per U.S. regulations and that income would have to be reported to the Spanish tax authority as a foreign income by the employee.  So the bottom line is that the U.S. company would administratively treat the employee as though they were employed in the U.S. without the added burden of bureaucratic entanglement with a foreign system.

The burden of compliance and administrative management with respect to the government of Spain would be upon the employee, i.e. the employee would have to do the reporting to the Spanish government for taxes/pension/healthcare with respect to a foreign income, as well a applying the dual tax treaty... Not the company.  And there is no legal obstacle to the U.S. company for this to happen as long as one is not in Spain on an NLV and the company has no physical presence in the country.

At least as far as we can surmise with the caveat that not all things that make sense are implemented by government bureaucracies... or people for that matter.

Thanks again for your input... it is greatly appreciated.

@chasleslieb

There are a number of legal and visa issues. I am currently working through this now. You may have a little different route since it is a university, but, from everything I have read and been told by lawyers, the only way you can reside in Spain and be employed by a US company is with the new digital nomad visa, which is currently only available in Spain.

There are some specific requirements for the visa, because they have set up tax benefits for those on the visa, as well as put into place rules to avoid double taxation and handle SS.

I am currently trying to navigate the best way to handle the SS and have been told many people set up a virtual mailbox in the US or use a friend/family address as a US residence to simplify the SS issue.

If you have not already, i would check with the HR department to work with them on how best to handle things

@jsthodal

Thanks for your input.

In this particular case there is a U.S. residence that the business or company can work through. 

It is very legal to have more than one residence though they may differ in kind such as "tax residence" vs. domicile residence, place of employment, residence for voting, etc.  As a former mariner, many of my colleagues would have a mail forwarding service from Nevada as their primary tax residence even though they spent their time ashore in other higher tax states... California for example (and the other half of their life at sea).  A personal example is when I worked at sea for a California based company, my domicile was in another state.  California wanted to tax my income but because I wasn't a California resident, I was exempt from paying income tax. The same thing occurred working on a ship on the Columbia river (the boundary between Oregon and Washington State).  Oregon wanted to tax the income because the ship was working in Oregon... but I did not live there and, after hiring an attorney, Oregon gave up their claim. I have also heard from another expat that South Dakota's requirement for residency is EXTREMELY lenient with no state income taxes.  This might be a good place to establish a U.S. residence and conduct business with a U.S. company as a U.S. citizen though you would still be a "tax-resident" of Spain and most likely liable for taxes in Spain from your U.S. income.  Bottom line: residence is not a black and white issue... it depends.

If one keeps a U.S. residence presence along with U.S. citizenship using a physical and mailing address in the U.S. (mail forwarding, trusted friend, or relative) the company will only be dealing with the U.S. system.

Living in Spain and having only a Spanish residence (or becoming a Spanish citizen) is a different situation.  And the nomad visa is also a different situation in this particular case as the person already has a resident visa and works on a contract basis with a U.S. company.  However working for a company as an employee (as opposed to contract) opens the door to retirement options as well as career opportunities.