DIGITAL NOMAD VISAS: IS THE ‘TREND’ HERE TO STAY?

Introduction

It is undeniable that the onset of the Covid-19 pandemic ushered in a new era of remote work, subsequently leading to a significant shift in the traditional office landscape. The ability to work from anywhere as long as you have a laptop and an internet connection has paved the way for the digital nomad lifestyle. Catering professionals across multiple domains, this new mobility trend is witnessing exponential growth in the form of various nations rolling out digital nomad visas. This article explores the rise of digital nomad visas, along with their benefits, and potential challenges in ensuring successful implementation.

Digital Nomad Visas: An Overview

A digital nomad visa is essentially a permit which allows you to work remotely, while being away from your country of origin/ permanent residence. Estonia was the first country to roll out this programback in 2020; however, it is being offered by more than 40 countries at the time of publication of this article, with the number growing steadily. This is indeed a testament to the rapid growth of the ‘digital nomad’ culture, which allows individuals to explore new opportunities, explore new cultures, and strike a work-life balance.

It is noteworthy that digital nomad visas are also open to students, with countries like Bermuda offering residence to undergraduates, graduates, and individuals enrolled in doctoral or research programs. Another aspect that deserves to be highlighted is that some countries offer digital nomad visas which also allow spouses and dependents to join the primary visa holder in the new country. Most of these visas are valid for a period of up to one year, with some nations offering prolonged residence permits for up to two years. While the plethora of options makes it convenient to choose a country that caters to your needs, at the same time, it becomes all the more convenient for confusion to crop up. But fret not! We’ve got you covered. As per the Digital Nomad Visa Index, countries and their respective programs are assessed on multiple factors including visa availability, internet infrastructure, taxation policies, cost of living, and healthcare systems, to name a few. Countries like Portugal, Romania, Mauritius, and Croatia have emerged on top in terms of the most suitable countries for digital nomads.

As stated before, more and more countries are opening their doors to digital nomads. The most recent entrants to this list include highly advanced nations like Japan & South Korea, as well as more scenic nations like Italy and Spain. It becomes important to highlight at this juncture that this mobility trend has particularly gained traction in Eastern and South-Eastern Asian nations, with countries like Philippines, Malaysia, Indonesia and Thailand having made already rolled out, or planning to introduce digital nomad visa programs.

Moving on to the eligibility criteria, the same varies from country to country in terms of minimum fund requirement, professional qualifications, and in some cases, even nationality since some digital nomad visa programs are open only to citizens and/ or permanent residents of certain nations. However, some of the common requirements which can be noticed across programs include:

1. You must be over the age of 18
2. The employer must be situated outside the choice of destination
3. You must work fully remotely on a contractual/ freelance basis
4. You must have a bachelor’s or master’s degree, or a certain amount of professional experience
5. You must have sufficient economic resources

In order to avoid confusion, please note that while multiple countries offer direct digital nomad visa programs, some countries have specific names for their programs, for instance the Beyond Extraordinary Anguilla Program (Anguilla) and the Premium Travel Visa (Mauritius).

Benefits of Digital Nomad Visas

Digital nomad visas come with a string of benefits: first and foremost being the reduction in formalities and processing time (as compared to an entrepreneur/ employment visa), while also offering a lot more benefits than your regular tourist visas by allowing you to legally work in the host country while also exploring popular tourist attractions. Other positive factors which simply cannot be overlooked, include:

1. Extended periods of stay: Digital nomad visas are valid for varying periods of tie ranging from 6 months up to 2 years. Additionally, some countries also offer renewal of the visas, subject to the fulfilment of certain criteria.
2. Contribution to Local Economy: With their arrival, digital nomads become a part of the host country’s economy by way of regular expenditures. Additionally, they often play a key role in fostering collaboration, as well as the growth of tech clusters in the host countries, further boosting the economy.
3. Tax Relief: Multiple countries offering digital nomad visas also offer tax incentives and reliefs. Additionally, nomads belonging to countries having tax treaties with the host countries end up saving themselves from the hassles of double taxation.
4. Access to Local Services: Digital nomad visas help you blend in easily with the society while also providing multiple benefits such as access to local healthcare, bank accounts, ability to enter into lease agreements for the purposes of housing, etc.
5. Pathway to residency: Several countries like Spain and Estonia offer stepping stones in the form of digital nomad visas, which can be utilised in obtaining permanent residence in a shorter period, with lesser formalities than the usual entrepreneur visas.

Challenges in Successful Implementation

Unarguably, digital nomad visas come with multiple benefits. However, one simply cannot ignore the flip side. Not only host countries, but also digital nomads(whether current or prospective) face a myriad of legal and socio-economic challenges that arise with the various digital nomad visa programs across the world. The first, and perhaps the most pressing issue that comes to mind is the failure on part of some countries in explaining the exact financial requirements, tax implications, and social security obligations, which may prove to be a hassle for new entrants therein. Legally speaking, there are certain questions which are often left unanswered; such as the applicability of the host country’s employment laws on the digital nomads, implications with respect to income tax and social security related obligations, etc. Lastly, the influx of foreigners in the host country may lead to an unprecedented rise in the costs of goods and services, which in turn may affect the standards of living for locals. Hence, it is crucial that the in their bid to attract digital nomads, the respective governments devise a robust mechanism to ensure minimum complications for the immigrants and locals alike. This will eventually lead to a better experience and higher quality of life for the digital nomads while they are in the host country.

Conclusion

With more and more professionals across the world valuing work-life balance, the popularity of remote work and flexible hours seem to be far from slowing down. As stated before, more and more countries across Europe and Asia, particularly east and south-east Asia seem to be embracing digital nomads with open arms. In fact, many of them are in the midst of rolling out their respective digital nomad visa programs. It will be interesting to see how this mobility trend affects the office landscape, economies, and the overall global business landscape in the years to come. Until then, it would be safe to say that digital nomad visas are here to stay!

Authored by: Advocate Priyamvada Lonial, SUO Law Offices