US
August 6, 2024
Digital Nomads. To some a source of inspiration, to others uncertainty and discomfort generating.
An individual who travels freely, working from wherever they are utilising available technology may be seen to be living their best life. Receiving a source of income whilst exploring the world, an individual is able to reap the rewards of a career whilst experiencing all that the world has to offer.
Unsurprisingly the number of digital nomads exploded during the pandemic, with the majority of organisations supporting if not promoting their workers working remotely in one form or another.
However, are the rose-tinted glasses now being removed with the realisation of compliance requirements and practicalities to organisations?
A Global Trend Accelerated by the Pandemic
An interest in enabling digital nomads existed outside of the pandemic, with Estonia launching their Digital Nomad Visa in order to attract tech-savvy travellers who will spend money locally without compromising the local labour market. The pandemic however highlighted the ability of workers to work from anywhere. With countries suffering massive losses from the lack of tourism, governments started to leverage workers fluidity and rapidly began introducing visas to support digital nomads.
These were typically from countries which had historically been extremely reliant on travel and tourism with countries such as Barbados, Bermuda and Mauritius amongst others leading the way. Further countries swiftly followed, with visas either targeted to Digital Nomads or facilitating remote work now being available in over 50 countries with recent additions including Japan, Indonesia, Thailand and Italy. There is a surprising number of European countries offering such visas, with Croatia, the Czech Republic, Spain and Portugal having established programs amongst others.
To much excitement, South Africa has recently announced the introduction of a digital nomad visa. Signifying a massive step forward in creating a pragmatic immigration system; the South African government is embracing the benefits that digital nomads can bring. Sadly, limited information on the scheme is known at this stage, although there is a suggestion that maximum stays permitted will be a generous 36 months.
Striking a Balance Between Freedom and Security
Most visas are short term in nature, with the majority allowing stays of up to 12 or 24 months for those meeting a minimum income level. The criteria to obtain a Digital Nomad visa seems to have grown; a recent trend appears to be the inclusion of requirements to prove historic remote work, permission from your employer to work remotely and / or proof you are free from criminal conviction. With the freedom these visas allow, sensible requirements realistically in order to protect the host country, may prove troublesome for some applicants.
Governments' Silence on Tax Obligations Raises Compliance Questions
Some governments have addressed tax obligations with confirmation that partial or no taxes would be due locally, however many have been silent. It is only now that questions on compliance are being asked.
The Caymen Islands varied slightly from others with a significant minimum income requirement. The Global Citizen Concierge Programme launched in October 2020 allowing those with an income above $100,000 (for a single applicant) to reside and work in the Islands remotely for up to two years. As of December 2021, the programme had generated nearly $300,000 of revenue for the Department of Tourism with an additional approximate $5,000 per applicant per month being injected into the local economy.
Remote Working and the Impact on Company Culture
Whilst possibly a small sum in comparison to the income usually derived through travel and tourism, at a time of economic uncertainty you can understand why the programme was implemented. Having closed for applications in October 2022, the programme will end in November 2024. We can speculate on the reason for the closure, however recovery and a return to pre-pandemic norms are likely to have been key considerations. It is also a possibility that the change in attitude towards remote work also played a role, with some organisations restricting work locations with many implementing a requirement for a base location or even work within an organisation’s premises.
Not only due to the need to comply with both external and internal governance; organisations are requiring workers to be rooted to allow the growth and development of company culture and colleague relationships. So far the workforce seems to have responded well to their organisations needs however only time will tell on the full impact of previous granted freedoms, both to the workers and the organisations!
A Growing Trend But Proceed with Caution
The trend of Digital Nomad visa implementation has slowed since the pandemic however still continues; with the development of technology, it is safe to assume that these visas will remain a part of the immigration landscape for those explorers amongst us however caution is recommended in their use to ensure full compliance of all legalities.
For further information on this topic and more, please contact the Sterling Lexicon immigration team at immigration@sterlinglexicon.com.
As Head of Immigration with Sterling Lexicon, Leanne leads a team of specialists who are responsible for ensuring the entire immigration process is smooth and stress-free for clients, assignees and their accompanying family members. She brings over fifteen years of experience in strategic immigration management, planning and consultation to her role, and has cultivated invaluable knowledge and experience in processing countless global migration applications. As a trusted partner, she consults with clients on everything from policy considerations and cost or efficiency improvements, to the impact of opening offices in new locations. Leanne is a frequent presenter and author on global immigration topics and trends, and currently serves as a member of the Worldwide ERC (WERC) Immigration Advisory Council.
