Updated: Aug 4, 2022
Your alternative to the traditional working model
Digital nomads, as the term implies, are people who work remotely from anywhere in the world, using digital technology to perform their job. Remote workers earning an income from a foreign employer has been increasingly prevalent since the onset of the pandemic.
As a consequence of the pandemic, remote working has become a new reality for many employees. Needing just a laptop and internet connection rather than an office has redefined the typical workplace, resulting in the increase of foreign nationals moving to host country in a remote working scenario.
This location-independent, technology-enabled lifestyle has been on the rise during the last couple of years, with more and more people embracing it as their new reality.
This trend has led several governments around the world to take action to fit the new reality in their legislative framework, by introducing Digital Nomad Visas in order to attract digital workers.
The introduction of the Digital Nomad Visa enables third country nationals who can prove that they are working remotely from a host country, using telecommunications, to legally reside and work from the host country, even when the entities or customers to whom they are providing services have no presence in the host country.
This specific visa is for people who would like to take advantage of all the benefits of living in the host country, while working for companies who operate outside the country. The visa aims to contribute to the transformation of the business ecosystem and the economic development of the country, by attracting talented individuals and entrepreneurs. They carry local benefits for realtors, landlords, and business owners.
What is a Digital Nomad Visa
It is a type of residence permit, for people who wish to live only in a host country but work for companies operating abroad, given especially the rapid rise of remote working policies adopted by a number of companies worldwide.
A Digital Nomad Visa allows remote workers to live in a host country and legally work for their employer or their own company registered abroad.
In general, the term digital nomads refers to individuals who are employed by an international employer, or by a company which has been registered outside the host country and receive salaries and benefits in the home country but work remotely from the host country, while living in (and exploring) the country.
Digital nomads can perform their work activities for a foreign employer remotely from the host country, by using information and communication technologies (ICT). They are a class of worker largely unanchored by geographic location, doing work wherever the Wi-Fi takes them, from mountain chalets to tropical beaches.
Digital nomads are typically not permitted to earn remuneration in the host country/countries, as the purpose of admitting digital nomads is to attract foreign spending to the host country on a temporary basis without permitting the digital nomads to enter into the host country’s local labor market.
Individuals granted with a Digital Nomad Visa will benefit from:
The right to stay in the country for up to one year, with the possibility to renew for two more years.
Their family members can also stay in the host country for the same period and be granted with a visa that expires at the same time as the permit of the individual. However, during their stay in the host country, the family members are not allowed to provide dependent work or to engage in any kind of economic activity in the country.
If they spend more than 183 days in a host country during the same calendar year, then they will be considered local tax residents and be eligible to a number of tax benefits. Those that spend less than 184 days in the host country but over 60 days, can still be considered local tax residents, as long as they meet some additional criteria.
Why This Matters
The Digital Nomad Visa will provide more flexibility and a framework for visitors in a host country who need or desire to work remotely from the country for a long period of time.
The regulation of third-country digital nomad immigration issues is of crucial importance to accommodate both employer and employee needs given the recent change of work patterns that are anticipated to continue in future.
This step is being taken in response to workplace issues tied to the coronavirus and the new reality of and dynamic changes to the labour market thanks to the widespread use of telecommunication technologies.
The Digital Nomad Visa will provide more flexibility for foreign nationals who are working remotely – or wish to work remotely – in the host country.
Who can Apply for the Digital Nomad Visa
Third country nationals who are either dependent employees or self employed persons, working remotely with employers or clients outside the host country using Information and Communication Technologies (digital nomads).
The beneficiaries for the Digital Nomad Visa are third country nationals who:
work remotely using information and communications technology,
are employed and work remotely by their own company or another company, located outside of the host country or are self-employed and their customers are located outside of the host country,
can prove that they have sufficient and adequate monthly income to support their living in the host country.
Advantages vs. Disadvantages of the Digital Nomad Visa
Due to a variety of reasons, including higher welfare and living conditions, a cleaner environment, the presence of friends and acquaintances living in a host country, as well as superbly high internet speeds, remote workers may prefer to reside and work in the host country rather than other locations. The introduction of the Digital Nomad Visa would provide an exceptional opportunity for highly qualified foreigners who would like to choose a host country as their country of residence, while also promoting the country’s economic development.
The high-tech digital nomad life sounds amazing. Working in a beautiful European cafe or even on the beach is an upgrade to a dull office. Take a look at the pros and cons of digital nomadism.
Digital Nomad Advantages
Freedom is, of course, the biggest advantage to being a digital nomad. You have the autonomy to choose your location, your work hours, your vacation hours, and much more.
Less stress & better quality of life is also a possibility. That’s not to say that a digital nomad life is a vacation, but the little things that caused daily stressors will disappear. Rush-hour commutes, work meetings, and lack of free time can put a lot of pressure on us.
Some more amazing bonuses to being your own boss include:
better work environment
be in charge of your work life balance
dressing for comfort
more time for creativity
traveling the world and exploring
Digital Nomad Disadvantages
No job or lifestyle is perfect. Every good has its bad and digital nomad life is no exception here. There are some issues digital nomads face.
First of all, being a digital nomad is hard work. There’s no one to guide the way and help you along. You need to figure out paperwork, visas, health insurance, new languages, and international business on your own.
Another possible disadvantage is motivation. To be your own boss or run your own business, you need an enormous amount of self-motivation. People who prefer to be told what to do and when to do it may run into trouble here.
Some other downsides to the digital nomad life include:
missing out on big family events
no income guarantee
feelings of isolation
Before setting out into the world and starting the nomad life, you need to figure out what kind of person you are. If you love challenges, independence, travel and are highly self-motivated, this might be the perfect opportunity for you.
Countries Offering Digital Nomad Visas
There are more than 25 countries and territories offering Digital Nomad Visas:
Antigua & Barbuda
Singapore, Malaysia and Hong Kong do not offer Digital Nomad Visas. Professionals may consider taking up Employment Pass in those countries.
The Digital Nomad Visa offers foreign nationals the option to reside and work remotely from the host country, whereas Employment Pass requires local employer sponsorship.
Obtaining the Employment Pass in Singapore, Malaysia or Hong Kong
Singapore Employment Pass
The Employment Pass allows foreign professionals, managers and executives to work in Singapore. Candidates need to earn at least S$4,500 a month and have acceptable qualifications. Employers must also demonstrate that they have fairly considered all jobseekers.
Malaysia Employment Pass (EP)
The Employment Pass (EP) is a work permit that enables an expatriate to take up employment with an organisation in Malaysia. The pass is subject to the contract of employment (up to 60 months).
Hong Kong GEP – Professionals
This sets out the entry arrangement for persons who wish to enter/stay in the Hong Kong Special Administrative Region (HKSAR) for employment as professionals. Applicants who possess special skills, knowledge or experience of value to and not readily available in the HKSAR may apply to come to work under the GEP.
The Employment Pass will allow residence in a country for foreigners who:
1. Work for an employer registered locally; or
2. are self-employed and registered locally.
Reach Out to Bestar
Bestar provides services to multinational corporations and high-net-worth individuals, related to personal, corporate or investment immigration. We have been involved in the headquartering and relocation to Singapore, Malaysia and Hong Kong projects of a diverse portfolio of clients, including companies operating in the Oil and Gas industry, the IT development industry and the gaming industry.
With our immigration and tax specialists, Bestar is in a position to help with the application process, including assistance with obtaining the necessary visas to enter the country, the tax and social security considerations applicable to the applicant as well as the foreign entity, offering a full range of services.
Individuals eligible for the Employment Pass may wish to consult with our mobility and immigration advisers for additional information and advice on next steps.
Assist in identifying if the Employment Pass is the required permit, depending on the particular circumstances of the individual;
Assist with the preparation of the required application forms and supporting documentation in applying for the Employment Pass in respect of the applicant and dependents, for both the new application and the renewal process and monitoring the status of such application;
Assisting with work and dependent pass applications for dependents of the applicant;
Advise the foreign entity of any corporate tax considerations or payroll obligations and assist with complying with such obligations;
Advise the applicant of any income tax and social security considerations as well as assist with complying with such obligations; and
Provide other ad-hoc immigration and tax advice as may be required.
For any further inquiries on the opportunities of Employment Passes, please contact us.