Digital Nomads
Digital Nomad Visas — is this a thing now?
Do “Digital Nomad Visas” exist yet? What can we get excited about and what risks should we consider?
“Digital nomad” is the new buzzword in global mobility. Owl Immigration recently ran a webinar looking at this from the immigration perspective (recording on the Owl Immigration website here), examining if digital nomad visas really are a “thing” or not, who they’re for, and at some of the associated tax and social security risks.
This article summarises that discussion. For details of existing programmes we are aware of at this time, please visit the Owl Immigration Parliament page here.
What is a “digital nomad” visa?
Carolina Rojas, one of our webinar panelists, defined this concept, in summary, as a visa for someone who “wants to work in another place, doesn’t have an interest to stay in his home country, but to travel around the world”.
Who is eligible?
Current programmes vary — eligibility criteria generally consist of either having an employment contract outside the host country, being self-employed by a company registered outside the host country, or being a freelancer with regular income and client contracts outside the host country. These categories vary by country; for example, the freelancer route is not contemplated in the UAE.
There is, of course, a requirement for the visa applicant to be able to carry out their work remotely, using “digital” means — i.e. a laptop and an internet connection.
Digital nomad visa routes typically have a minimum salary requirement (either monthly or annual, or, for a few programmes, in the form of savings in a bank account). Required amounts vary considerably per country. Most countries will require health insurance; some require evidence of no criminal record. So far, we have not seen age, skill or educational qualification requirements.
Of course, there are government fees to be paid (or stamp duty, or tax) — again, these varies by country, ranging from a few hundred Euros in, for example Malta or Montserrat, to thousands of dollars in some Caribbean locations.
Why?
Motivation to introduce digital nomad visas also varies by country, with the predominant drivers appearing to be:
1. A s a direct result of reduced tourism (because of Covid-19) — to boost visitors to the country and resulting spending in the local economy (digital nomad programmes in the Caribbean are examples)
2. To promote (or “market”) a country’s suitability as a hub for digital and tech start-ups (examples include Estonia, Portugal)
3. To attract highly skilled individuals
Who will use these visas?
Digital nomad visas are supposed to be for the newly emerging “have laptop, will travel” individual; however, it is interesting to note that they may also fill gaps in existing immigration legislation and provide an answer to problems that have been around for years. Philipp von Zitzewitz, from Sesam in the UAE, notes that, prior to the introduction of the Dubai “virtual working progamme” in August 2020, there was no suitable immigration option for work done on assignment, without a UAE entity to act as sponsor.
Judith Kubasch from JK Immigration in South Africa also comments that a digital nomad visa allowing work to be carried out in a host country but for the benefit of an employer in the home country would also cater for accompanying spouses, particularly in countries where there is no default work permission for dependents.
Opportunity Gap
Of course, digital nomad visas can only be used by individuals who can carry out their work remotely, meaning that there is a significant and growing gap between those who can choose their location of work, and those who can’t. A spotlight was shone on this issue during the Covid-19 pandemic, where increased coronavirus outbreaks were seen, globally, in industries where physical presence is required and “social distancing” is hard (for example, meat packing, garment factories).
McKinsey has published an interesting study about the future of work which points out that “more than 60 percent of workers in the US economy cannot work remotely. Their jobs require at least some physical presence such as standing on a meat processing line, helping customers in a store, or providing healthcare services. In less economically developed countries, the share of workers unable to work remotely is even higher.”
Owl Immigration Parliament members report a significant increase in clients asking about “work from anywhere” immigration routes for their senior and highly skilled employees, who are now actively enquiring about options to work from a location that they find personally appealing, rather than from a location that is of practical benefit to their employer.
Tax and Social Security Risks
The biggest and most obvious risk is that of tax and social security considerations. Many countries have implemented digital nomad routes that remove tax liability in the host country, but of course they can’t do anything about tax considerations in the home country. Clayton Cartwright, from The Cartwright Law Firm, LLC in the US, highlighted the issue of “transactional costs” — the time-consuming and expensive administration that goes along with having an employee based in an unusual location.
Where a country doesn’t have a specific digital nomad visa route but is still trying to attract digital nomads (for example Portugal), the risks may be even higher — Carmo Hatton, from Eres Relocation in Portugal, commented that although there are existing visa options for people coming to Portugal as digital nomads, the issues of social security contributions and tax continue to be complex and should be looked at case by case.
Where do these visas already exist?
Currently we are aware of digital nomad visas in the following countries:
1. Antigua and Barbuda
2. Barbados
3. Bahamas
4. Bermuda
5. Croatia
6. Curaçao
7. Estonia
8. Georgia
9. Iceland
10. Malta
11. Montserrat
12. Montenegro
13. Panama
14. Romania
15. UAE
And we are aware of potential “digital nomad” visas to be introduced in the following countries:
1. Costa Rica
2. Greece
3. Italy
4. Portugal
5. South Africa
6. Spain
7. Thailand
Details
For more details, as far as we are aware of them today, please visit the Owl Immigration Parliament page, which is kept updated. Please also feel free to comment and provide details of your own!
