Capturing digital talent in the era of remote work

Teleworking had been for years the future possibility everyone talked about, but few people ended up putting into practice. In the European Union as a whole, only 3.5% of salaried employees habitually worked from home in 2019, a figure that was reduced to 2.1% in Spain as a whole, according to Eurostat data.

However, the situation took a 180-degree turn in mid-March, when, following the outbreak of the pandemic, countless companies, regardless of their size and sector, found themselves needing to continue their activity outside of their workplaces.

Well into 2021, there are indications that teleworking is here to stay, at least in the short term. The need to maintain certain prophylaxis measures based on social distancing until we reach sufficient vaccination levels, as well as to reduce pressure on mobility flows to public transport, force companies to maintain teleworking, even if in a hybrid form.

On the other hand, thanks to the digitalization of the economy, new business models require little or no physical presence in the country where consumers are located, and more and more professionals are choosing to practice their profession remotely while traveling the planet. The figure of the digital nomad is today a booming professional profile.

Thanks to the digitalization of the economy, new business models require little or no physical presence in the country where consumers are located, and more and more professionals are choosing to practice their profession remotely while traveling the planet

Countries with ambition and a strategic outlook have decided to take advantage of the situation to attract digital talent. The preferred formula for legalizing the arrival of these professionals has been the issuance ofdigital visas, which allow their holder official residency in one country and virtual work in another.

Germany was a pioneer in creating the visa for digital nomads, one for independent workers (Freiberufler Visat), which can be extended for a period of up to three years, and another called Working Holiday Visa, for stays of less than six months.

Estonia launched, in August of last year, the Digital Nomad Visa, which allows working in the Baltic state for twelve months. In addition, and since 2014, Estonia has the e-Residency program which allows becoming a digital resident in the country and founding a company or establishing oneself as a self-employed worker, with conditions considerably less expensive than those for self-employed workers in Spain. The best part is that you can carry out all procedures from your home sofa, thanks to the country's high degree of administrative digitalization.

Our neighbors in Portugal have recently designed a Temporary Resident Visa that can be used by self-employed individuals and entrepreneurs without nationality limits. It allows its holder to remain in the country for more than one year. The Portuguese authorities have designed two types of visas for digital nomads: one for self-employed workers and another for entrepreneurs, which requires presenting a signed contract with a startup incubator in Portugal.

And Barcelona, how attractive is it for this new professional profile? The digital talent sector has grown during the months of the pandemic and has generated 6,000 new jobs, according to Barcelona Digital Talent, mostly linked to Big Data, programming, or infrastructure management. With the slogan "Move your desk, change your life", the City Council has just launched a campaign to attract digital nomads. For its part, Turismo de Barcelona has promoted the "Workation" program with the aim of desesonalizing the tourism sector and integrating the digital nomad into the daily life of the city. In this sense, the program includes four products: accommodation, medical insurance (with free assistance in hotels and primary care at Quiron Hospitality), a special card to access 25 museums for six months, and agreements with sports clubs, transport, and mobility. Regulating shared housing −and not prohibiting it− would also be a step in the right direction.

Beyond the quality of life and administrative facilities, one of the main factors that make a worker choose to settle in one country or another is, evidently, taxation. Most countries tax income obtained in their territory by tax residents in another country, while also taxing income obtained by their tax residents in any territory. Only the existence of an agreement to avoid double taxation signed between both states will prevent the same income from being taxed twice.

Beyond the quality of life and administrative facilities, one of the main factors that make a worker choose to settle in one country or another is, evidently, taxation

In Spain, an individual is considered a tax resident if they remain more than 183 days in Spanish territory during the calendar year or if the main center of their activities or economic interests is located in Spain, directly or indirectly. The ownership of real estate, businesses, shares in Spanish companies and, in general, any source of wealth or assets, may be considered by the authorities to prevent its owner from losing their tax resident status, despite having ceased to habitually reside in Spain. In short, digital nomads face a complex web of internal regulations and bilateral agreements that they must understand to comply with their tax obligations.

Some countries, however, are already making efforts to be more competitive in the eyes of digital talent. Croatia announced last year that it would authorize working remotely and legally residing in the country, despite having a contract with a company domiciled outside its borders. It also opened the door to working without paying income tax in Croatia, although without options to benefit from medical services except those covered by a private policy. Portugal, through its "Non-Habitual Resident Regime," allows taxation at a reduced rate of 20% for ten years, provided that such income comes from scientific, artistic, or technical activities.

The pandemic has favored the consolidation of teleworking, and many professionals have seen the perfect moment to change residence, seeking areas with better climate, less pollution, a better cultural and gastronomic offer, events in their sector, and ultimately, better quality of life. In this context, Barcelona gathers most of the optimal ingredients. In fact, it has occupied the first position in the Nomad List ranking for a long time. We are talking about highly qualified professionals, who will probably not only live and consume in our territory but will also found business projects, advise local startups, or become members of their executive boards. They are a prominent asset, especially in an innovation ecosystem in a maturing phase.

We are talking about highly qualified professionals, who will probably not only live and consume in our territory but will also found business projects

But even beyond the limits of the capital, many towns in Catalonia could take advantage of teleworking opportunities to attract talent and investment, contributing to territorial balance. This is what Ireland has just done, launchinga strategy to promote remote work in rural areasand creating 400working hubsin Irish towns.

Covid-19 has accelerated some trends in the world of work that force public administrations to work with speed and a future perspective. In the coming years, we will experience an unprecedented race to attract digital and technological talent, and it seems evident that we have everything in our favor to take advantage of it. Will we be up to the task?