After 3 month of diligent work collecting documents, apostilles, translated documents, letter from a CPA, bank statements, and more, I unfortunately had to abandon our goal to relocate to Spain. Here is why.......

The taxation systems appears to offer friendly expat treatment, but that is not really true. Since I am a business owner, with US based employees, I myself am not considered an employee nor a "freelancer". This disqualifies me from the Digital Nomad Visa and the Beckham Rule. I was planned to essentially manage my US-based business and employees from abroad in a semi-retired sort of way. As I was having an attorney review the documents before submitting to the Spanish consulate, I learned that as a business owner, Spain is going to consider my US based company as essentially Spanish-based income since, I as the owner, am in Spain even if I am semi-retired and return to the US for Board meetings. Since the business is a partnership, this would have exposed the business to a 47% tax rate. Also, Spain would levy a wealth tax of up to 3% annually of my personal wealth AND the value of the business I am an owner in.

This would have resulted in an additional several hundreds of thousands of dollars per year in taxes to Spain above what is paid the to US. I have no issue paying taxes, but it is not a Spanish-based business with any Spanish employees or presence. Plus, we would not be entitled to any Spanish benefits, like health care, social security, public schools, local tuition rates, etc. For me, the Beckham rule didn't apply, nor would the 24% tax treatments for foreign sourced dividends. My business is also an illiquid assets with low margins. Having to pay a wealth tax on it would essentially devour any positive cash flow from the business.

We so wanted to move to Spain, to provide our kids with an immersive international experience, Excessive tax rates on income, combined with a significant tax on essentially illiquid assets (business, long-term investments), etc, is oppressive.

I share this because I believe the internet and influences post about the DNV and benefits or relocating to Spain. In certain employment situation it works. But, once you have an employee you jump from Freelancer to Owner and are exposed to Spain's Permanent Establishment treatment. The wealth tax is a levy on already being successful, but includes taxation on illiquid and fixed assets.

After much consideration, we will have to pivot to other countries. We really wanted our second home to be in Spain, but their taxation treatment makes it financially irresponsible.