Banking setup for remote workers and retirees with foreign income

Terms used

• NIE — The NIE is the identification number Spain gives to foreigners, used for tax, work, housing and official procedures.

Key rules

• Two accounts: Use a Spanish euro account for local bills and a low-cost foreign-currency route to fund it.
• Conversion cost: The exchange margin is the main cost, and specialist providers usually beat bank rates.
• Deposit guarantee: Spanish banks guarantee deposits up to 100,000 EUR per depositor per bank; e-money fintech accounts are not covered, so do not leave large balances in them (How safe is your money in a Spanish bank?).
• Foreign accounts: Tax residents must declare foreign accounts on Modelo 720 once a category passes 50,000 EUR on 31 December.

The setup most people use

Most people with foreign income keep two things: a Spanish euro account for local spending, and a low-cost route for moving foreign-currency income into it. The main variable is what you lose in conversion, so that is where to focus.

Some landlords and utility companies require a Spanish IBAN, and so does Social Security if you are self-employed, so you cannot skip it (Where Wise, Revolut or a foreign IBAN works in Spain).

Choose how the money arrives

Remote workers. Keep a Spanish euro account for rent, utilities, direct debits and tax payments. Have your clients or employer pay into a multi-currency or fintech account, convert at a low margin there, then send the euros to your Spanish account by SEPA transfer. A euro SEPA transfer within the EU must cost the same as a domestic one.

Retirees. Open a Spanish euro current account, ideally a low-fee or no-fee package. You have two ways to fund it:

• Keep the pension paid in your home country and send it monthly or quarterly through a specialist transfer provider or currency broker. These usually beat bank exchange rates. It needs some setup and monitoring.
• Have the pension paid straight into the Spanish account. This is simpler, but the paying bank may convert at a poor rate.

Where conversion costs hide

Spanish high-street banks usually convert at their own rate, with a bigger margin than specialist providers. Many also add a commission or fixed fee on incoming non-euro transfers, and correspondent banks can take their own charges on top.

Specialist and fintech providers such as Wise and Revolut generally charge a small, visible percentage, sometimes plus a fixed fee, at rates close to the mid-market rate. Some add weekend markups or plan limits.

Fees differ by bank, amount, currency and plan, so compare the published tariffs of each provider for your own amounts (Bank, Wise-type provider or FX broker: choosing a transfer method). The Bank of Spain also publishes fee information.

Trade-offs to know

• Still abroad? Open a non-resident account first, with your passport and a reason for the account, and convert it to a resident account once you have your NIE or TIE. Some banks offer non-resident or digital accounts with lower fees; ask about fees for receiving foreign transfers before you open one.

Tax reporting

You file Modelo 720 by 31 March of the following year, online with the Spanish tax agency, at no fee (Who must declare foreign assets). A retiree's pension is taxed under the treaty between Spain and the paying country: under most treaties a private pension is taxed in Spain and a government pension in the paying country.

Documents you need

• NIE, your foreigner ID number, which banks may require to open the account.

• Proof of income, such as a pension statement, which banks may ask for when opening the account.

If you are a non-EU citizen

The account setup is the same, but online banks often ask for your TIE or residence card rather than only your passport and NIE. Have the card ready when you apply, along with your proof of income.