In February 2021 the list consisted only of 21 countries that had these types of visas in place or in the works. That list has now expanded to 49 countries and is still growing.
What Is a Digital Nomad Visa?
A digital nomad visa or in some cases a temporary residency permit allows a visitor a right to stay in a country and work remotely via a computer/laptop to a foreign-based employer or business. These visas typically have a duration of 12 months and can be extended for one or more years depending on the country issuing the visa.
These digital nomad visas are not for everyone, there will still be a large contingent of digital nomads on tourist visas because it is more cost-effective or because they do not need a long-term visa.
Why Are Digital Nomad Visas Created?
These are the 5 trends that have resulted in digital nomads being targeted with the creation of a new visa class or temporary residency permit:
- Many countries suffered a severe drop in tourism revenue from the ongoing Covid-19 pandemic. As a response to this drop in tourism countries began actively targeting digital nomads. The thought was that is better to have one tourist staying 12 months than 26 tourists staying 2 weeks, especially with all the travel regulations.
- Working from home became the new normal during the pandemic and this made it easier to switch countries as well and work remotely. A new class of wealthier digital nomads or techpats (remote technology workers). was born and they were actively targeted with this new visa class. Almost all digital nomad visas come with a minimum income requirement.
- Home-schooling and online schooling has become more socially acceptable since the Covid-19 pandemic allowing more families to be targeted.
- Tax revenues mainly VAT, import duties and application fees from high-spending digital nomads can help the governments’ budgets. Whilst health and social costs stay low.
- Reversing a long-term brain drain. There are plenty of countries that have suffered from brain drain, where highly educated people leave the country to work elsewhere. Digital nomad visas, some with additional tax benefits were created to reverse this brain drain.
What Is the Income Tax Situation with Digital Nomad Visas?
The tax situation with digital nomad visas is a complicated one. Some countries expect you to pay full tax, some others have tax deductions or special rates, and there are some with zero taxes. The countries with digital nomad visas and zero tax assume you still pay tax in your home country and therefore they will not tax you. Almost all countries require you to have private health insurance and do not require you to pay social security benefits.
25 November – Spain Digital Nomad Visa details updated – to go live in January 2023
On a continent-by-continent basis, I will list the countries that have a Digital Nomad Visa in place, this is a special visa or temporary residency permit that allows you to work remotely for a foreign employer or foreign incorporated business. In some countries, the concept is so new that authorities have no idea how to deal with it yet, or the process is very bureaucratic.