The policy will come into effect next May and aims to expand the country’s aging workforce.
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Spain says it will grant residency and work permits to around 300,000 undocumented migrants each year for the next three years.
Elma Saiz, Spain's Minister of Inclusion, Social Security and Migration, announced the new policy during an interview with Spain's national broadcaster on Wednesday.
"The regulation opens doors that were previously closed by means of three keys: formation, employment and family. Three keys that lead to inclusion, but with high standards in terms of legal requirements and in terms of human rights”, she explained.
The policy is set to come into force in May 2025 and remain in place until 2027. It is part of Spain's attempt to expand its labour force in the face of an ageing population.
Spain needs around 250,000 registered foreign workers a year to maintain its welfare state, Saiz said, explaining that the legalisation policy is not aimed solely at “cultural wealth and respect for human rights, it’s also prosperity.”
“Today, we can say Spain is a better country,” she added.
The reform shortens and simplifies legal and administrative procedures for work and residence permits, allowing migrants to register either as self-employed or salaried workers, and provides them with additional labour rights guarantees.
It also extends a visa previously offered to job-seekers for three months to one year.
Spain's Prime Minister Pedro Sánchez has often described his government's migration policies as a means to combat the country's low birth rate.
Spain is one of the European countries that receives the most irregular migrants each year. From January 1 to November 15 of 2024, more than 54, 000 migrants entered Spain irregularly, up 15.8% from 2023, according to data from the Spanish ministry of Interior.
In August, Sánchez visited three West African nations in an effort to address irregular migration to Spain’s Canary Islands.
The archipelago off the coast of Africa is seen by many as a step toward continental Europe with young men from Mali, Senegal, Mauritania and other areas seeking better job opportunities abroad or fleeing violence and political instability at home.
Many undocumented migrants make a living in Spain's underground economy as fruit pickers, caretakers, delivery drivers, or other low-paid but essential jobs often passed over by Spaniards.
Without legal protections, they can be vulnerable to exploitation and abuse. Saiz said the new policy would help prevent such abuse and "serve to combat mafias, fraud and the violation of rights."
Spain's economy is among the fastest-growing in the European Union this year, boosted in part by a strong rebound in tourism after the pandemic.
In 2023, Spain issued 1.3 million visas to foreigners, according to the government.