It’s not easy to type out an important email with sunlight glaring against your laptop screen or sand clogging your keyboard.
So, when the idea of being a digital nomad and living the digital nomad lifestyle began to emerge as a kind of blend between work and everlasting vacation, the Nomad Capitalist team was sceptical.
However, the rise in remote working and the adoption of more flexible work policies by companies has meant the concept of digital nomadism has evolved with a more practical, realistic set of choices.
Dreaming of being a digital nomad is no longer about working from a remote beach – well, it’s not only about that. It’s about making deliberate choices between worldwide locations that offer concrete benefits in terms of tax, cost of living, travel and lifestyle incentives.
The paradigm of traditional work and the spaces where it is conducted have undergone a seismic shift since the Covid-19 pandemic. As of 2023, WFH Research, a group that surveys attitudes to working arrangements, found that 12.7% of full-time employees work from home, while 16% of companies are fully remote.
Little wonder then that as the world embraces remote work, normal tourist visas are no longer cutting the mustard and digital nomad visas are becoming increasingly popular.
With the number of remote workers growing, more countries are realising the potential of tailoring programmes specifically for the digital nomad community. For the 50 or so countries that operate digital nomad visas, the money spent on goods and services by new populations contributes to their economies.
Suppose you’re a remote worker, a freelancer or a small business owner with the ability to work from anywhere in the world. In that case, having a residence permit to live in place for several years is undoubtedly appealing.
A digital nomad visa is not technically a residence permit but a longer-stay visa. Across the globe, these schemes differ; some allow you to stay for five years, and others for six months or a year, which can be renewed. Basically, a digital nomad visa is permission, if you can show some basic level of income, to stay in the country for a defined period.
Digital Nomad Visa Benefits
There are three key benefits of a digital nomad visa.
Firstly, you get access to a country for longer than a tourist visa will allow. This gives you certainty and helps you bypass many of the questions you could expect if you stayed in a country for an extended time without a visa or residence permit.
Secondly, digital nomad visas usually have far lower financial requirements than traditional residence or citizenship programs. More conventional routes to residence and citizenship typically require an investment or donation of a far more substantial amount.
Usually, you only have to show proof of a certain amount of monthly income and that you have bought or rented accommodation in the country.
Lastly, besides giving you residence, many countries will offer tax incentives while you’re on a digital nomad visa. Some don’t require foreign nationals to pay any tax, and some do. For a few years, these visas act as a buffer against tax and other legal situations like employment law, where you simply bring your income into a country but don’t necessarily sell anything or have customers there.
There can be a downside. Depending on the country they are usually only valid for a year or maybe two and may not count towards permanent residence or citizenship.
Who Will a Digital Nomad Visa Suit?
While it is clearly the case that these schemes will suit those who want to move around the world, the issue of tax residency will ultimately come into play. You have to choose where you will be based for tax purposes.
Some countries do have taxes for digital nomads.
In those places, if you become a tax resident by staying there for more than 183 days, you’ll be liable for tax. In others, you can avoid becoming a tax resident by spending fewer than 183 days and not being liable for tax there. However, this is a complex area – see our article on the 183-day international tax myth – and you could still be liable for tax elsewhere. Some countries will not tax you as long as you show you’re a tax resident elsewhere.
So, when considering which digital nomad visa to choose, you will want to know if there is a built-in exception from tax or if the country is tax-exempt in the first place.
Typically, no-tax jurisdictions tend to be remote islands that do not always offer the lifestyle benefits that young professionals require. Also, there can be so little difference between temporary residency programs and digital nomad schemes in these places, as to make the benefits negligible.
However, if you want to go to a European country where the requirements for residence are typically high, the digital nomad visa is a great option. These schemes are most attractive to people who want to live in places they like but don’t want to pay a lot of money to get into them. After all, Europe has traditionally been expensive to get into.
So here are our top six digital nomad visas for the European Union:
1. Spain
The Spanish Digital Nomad Visa is now open to non-EU nationals who want to work remotely from Spain and work for non-Spanish companies. The applicant is allowed to receive a maximum of 20% of their income from a Spanish company.
Both self-employed workers with multiple clients and remote workers employed by a single company outside of Spain are eligible for this visa. In order to apply, you cannot legally be living in Spain at the time of your application and you cannot have lived there for the previous five years.
You must prove you have worked with your client or company for three months before applying and that the company you work for is operational for at least one year. You must also demonstrate three years of work experience and show proof of funds – namely, you can support yourself in Spain – to the extent of €2,234 per month or €28k annual income. This can be done with bank statements and employment contracts.
It’s also a requirement to have private health insurance and a clear criminal record, two factors that are common to all the programmes listed here.
Initially valid for 12 months, or the duration of your employment contract if less, Spain’s Digital Nomad Visa can be renewed for up to five years. You will need to spend at least six months per year in Spain, which means you become a tax resident of Spain. Spanish residence gives you access to EU travel, and you can bring your family with you by providing additional funds.
Similar to the tax rate applied under the Beckham Law, you will pay a reduced tax rate of 24% on all income below €600,000 per annum. In fact, new rules now state that the Beckham Law is now applicable to digital nomads, which is good for them, too. If you’re interested in learning more about Spain’s Nomad Digital Visa, this video covers everything you should know.
2. Portugal
Portugal launched its digital nomad scheme in October 2022 to replace the D7 visa – the only category remote workers could apply for. Once you are approved, you can stay in Portugal for up to four months, but during this time, you must apply for a residence permit that lasts for two years and is renewable for a further three. You can apply for permanent residence after five years of legally living in Portugal.
You can also bring a spouse and dependents to come and live with you in Portugal. To qualify, there is a minimum income requirement of €3,040 per month, which must be proven by the 12 previous months’ salaries. In 2023, that amount equated to €36,480.
In the past, digital nomads could claim non-habitual resident (NHR) status, reducing their taxes to 0% on global income and a flat rate of 20% on locally sourced income.
Then, in late 2023, Portugal’s parliament announced that the NHR tax regime was coming to an end as they argued it was no longer beneficial to the country.
However, a new regime, effective from January 1, 2024, known as NHR 2.0 has been announced with almost the same benefits. The main difference is that the pool of eligible applicants is now smaller. The new scheme focuses more on those employed in scientific research and innovation rather than retirees and those in other high-value jobs.
3. Estonia
Estonia is a modern technology hub where digital nomads will feel right at home. Its non-renewable digital nomad visa grants official approval to live and work there for one year. To qualify, you can be from any country as long as you fall into one of three categories:
- A remote employee who shows proof of employment with a company based outside Estonia
- A partner or shareholder in a business outside Estonia
- An online freelancer or self-employed independent worker with most of your clients and customers residing outside Estonia.
In all cases, you must show a monthly income of €3,504 with six months’ worth of bank statements. If you stay in Estonia for more than 183 consecutive days in a 12-month period, you will be liable for taxes there.
There is no need for nomads to pay tax in Estonia if they’re there for less than 183 consecutive days. After staying for more than 183 consecutive days, you are considered a tax resident and must pay taxes. If your home country has a tax treaty with Estonia, you can reduce your tax obligation. If you reside in Estonia for more than 183 days, you become a tax resident and will be taxed at a flat rate of 20%.
4. Greece
With the Greek digital nomad visa, you can work remotely for up to two years in a beautiful Mediterranean country and have visa-free access to all 26 EU member states.
You must earn at least €3,500 per month from a remote job as an employee, freelancer or business owner with a company outside Greece. You will need to prove you have accommodation for the duration of your stay in Greece. You also have to register for a residence permit in Greece.
If you live in Greece for less than six months, you are not required to pay local income tax. If you stay for longer, you will be taxed at local rates, which start once you earn €12,000 a year.
5. Malta
Due to its advantageous tax system, English-speaking population and foreigner-friendly legislation, Malta has become a particularly attractive destination for digital nomads. It offers fast broadband speeds and relatively low living costs, although the cost of rental property in popular areas like Valletta is rising.
The Nomad Residence Permit, as it’s formally known, requires a monthly income of €2,700. The program offers zero income tax for up to a year, even if you spend more than 183 days in Malta, as long as you hold tax residence in your home country.
6. Croatia
Croatia is a forward-looking, safe and relatively inexpensive country from which to enjoy life and build your remote career.
The recently launched Croatia Digital Nomad Visa requires proof of monthly income of €2,700 and is valid for one year. This program is gaining popularity because digital nomads operating in Croatia are exempt from tax if they have a tax residence elsewhere.
You must prove that you have accommodation in Croatia by submitting a confirmed booking or a rental agreement with a Croatian landlord.
Once you obtain a Croatia Digital Nomad Visa, you do not have to pay income tax in Croatia on your remote earnings. You may, however, still have to pay taxes in your home country depending on its tax treaty status with Croatia.
Create New Wealth Faster
Many people are beginning to realise that they can work from anywhere in the world. The more you earn, the more the requirement there is for proper planning. After all, living in a foreign country is not something you do on a whim.
That’s where Nomad Capitalist comes in. We help high-net-worth individuals create a bespoke strategy using our uniquely successful methods. You’ll keep more of your own money, create new wealth faster and be protected from whatever happens in just three steps. Discover how we do things here.
