The number one thing that has pretty much determined this year, 2020? Working from home! Maybe you’ve loved it, maybe you’ve hated it. And maybe your thoughts have started wandering off to that moment post-COVID when we can finally travel again. Because if you could do your work from home where your flatmate, cat, spouse or mother (in-law) wouldn’t stop bothering you, you surely could do your work from a white sandy beach or some cool European capital, couldn’t you? Speaking of a very welcome perspective after this bizarre year.
We know some of you guys have already started checking in with yourself or your employer whether you could jump on that plane soon. At the same time, with international travels at an absolute low, countries have seen their touristic industry crumble. It’s in their absolute interest to get the economy going again and attracting digital nomads is their aim. Working remotely: you are ready, companies are ready and finally, countries’ policies to legally make it happen seem to be ready to! So, with all these new possibilities ànd policies (read: digital nomad visas) 2020 has brought us, we get to the most fun part now: picking your dream destination.
But wait, what about my taxes…?
When choosing your new home-away-from-home, taxes might not be the first thing you consider. However, staying in another country for a fair amount of time does oblige you to lodge your taxes there in some cases. Per destination mentioned, we’ll briefly specify whether it makes you a local tax resident. Wherever you go, always make sure you are well informed about this. In case you’d like a little help, don’t hesitate to contact us.
So, where am I heading to?
Leave it to us to inspire and inform you with this attractive list of destinations…
ANGUILLA: Remote Work Program
With the Remote Work Program, you can stay up to a year on the island of Anguilla. You’re eligible for the visa if you can show proof of employment or a Business Incorporation Certificate. You also need to show proof of having a valid health insurance that covers COVID-19. The application fee is $2000 for individuals and $3000 for families.
Speaking taxes, Anguilla is pretty attractive as it is tax-free. There’s no income tax and the property tax is very low.
ANTIGUA & BARBUDA: Antigua Nomad Digital Residence (NDR)
This independent Commonwealth country made up of the two-namesake island and several smaller ones gives you the opportunity to stay for two years on the Antigua Nomad Digital Residence. Under this visa, you’re not allowed to work for any organization that’s doing business in Antigua or Barbuda and you have to show proof of a yearly income of $50,000 and having the means to support yourself and the ones you’re bringing over. The application fee is $1500 for individuals, $2000 for couples and $3000 for families.
The country of Antigua and Barbuda does not have a personal income tax. On the official website it’s highlighted that as a visa holder, your income tax affairs stay entirely with your country of normal residence.
ARUBA: One Happy Workation
Rather than offering a visa, Aruba has come up with an entire program for anyone who wants to work remotely from the island for a period varying from a week to three months. It offers great accommodations – including superfast Wi-Fi – and plenty of discounts and access to local experiences. Even your dog and cat are welcome. The program is only open for US nationals however, but in case you are, this program could be the perfect little break from staying at home so much. You don’t even need to apply, as you can directly book your Happy Workaction through their website. Keep in mind that you can’t stay longer than three months.
As this program is a (working) holiday rather than a semi-permanent stay, you simply keep lodging your taxes in the United States.
AUSTRALIA: Working Holiday Visa
Who doesn’t have a friend that has been to Australia to work on a farm? That’s because anyone aged between 18 and 30 can get a twelve-month working holiday visa showing $4000 in a bank account. It also makes it perfect for beginning digital nomads as you’re allowed to work legally in Australia for a year. That doesn’t have to be the typical traveler’s job like working in agriculture or in a bar.
Residents, but also temporary visitors, are required to pay taxes on the income they earn in Australia. Once you’ve arrived down under, you’re advised to apply for an Australian Tax File Number. Are you not sure whether or not you need to pay taxes over the work you do remotely? There’s a tool available on the official website of the Australian Taxation Office called the “Do I need to lodge a tax return”, so make sure to check this carefully.
BARBADOS: Barbados Welcome Stamp
Dream destination Barbados has undertaken action in this difficult year to attract digital nomads. Last July, they released a special visa named the Barbados Welcome Stamp. It’s a visa valid to work and live on the island for one year. As an individual you pay $2000 and as a family $3000. You’re eligible if you can show proof of having an annual income of $50,000 and if you can show this income is generated outside Barbados. For the entire period for which the Welcome Stamp is granted to you, you need to show you have a valid health insurance.
As a non-national who got granted the Welcome Stamp, you are deemed not to be resident in Barbados under the Income Tax Act.
BERMUDA: Work from Bermuda Certificate
In order to qualify, you must be older than eighteen years, have a valid health insurance, and provide proof of employment or enrollment in higher education. In addition, you also need to prove you have sufficient means or a continuous source of income so Bermudians currently working on the island will not get displaced in the positions they hold.
Bermuda doesn’t tax the income or capital gains of resident or non-resident individuals.
CAYMAN ISLANDS: Global Citizen Concierge Certificate
Safe to say that the Cayman Islands are an interesting destination for digital nomads. Thanks to their Global Citizen Certificate, you are allowed to stay for two years. In every single year, you have to reside in Cayman for at least ninety days. Obtaining the visa is a little more challenging than it is compared to the other destinations on this list: you need to prove an annual salary of $100,000 and have a valid health insurance. Moreover, they run background checks on you and you need to have a notarized bank reference letter. The annual fee is $1500.
Note that applications need to be made by 31 October 2021, as the program will expire on 30 November 2023.
There is no individual taxation nor corporate tax in the Cayman Islands.
COSTA RICA: Rentista Visa
If you’re a business owner, Costa Rica’s Rentista Vista might be for you. You qualify if you earn an independent and reliable income of at least $2,500 a month from a guaranteed source. This income has to come from your business and you’re not allowed to work as an employee.
The Rentista Visa allows you to stay for two years, and it gives you the option to extend. This requires a resubmission of evidence you’re still meeting the income threshold. Moreover, you need to prove to have lived at least four months per year (not necessarily consecutive) in Costa Rica.
If you spend more than 6 months a year in Costa Rica, you become a tax resident. Costa Rica has a system of taxing on territorial basis however, meaning that both tax residents and non-residents are only subject to tax on the income that is sourced in Costa Rica. Foreign-source income, which is most likely the case if you’re a digital nomad with your own business, is not subject to taxation.
CROATIA: Digital Nomad Visa
On January 1st 2021, Croatia will launch its special visa for digital nomads. And you may call that remarkable as it only took the government 45 days during the global pandemic to come up with a Digital Nomad Visa after a Dutch entrepreneur had sent an open letter to the Prime Minister. It’s clear that Croatia, who has also seen its touristic economy crumble, wants to attract you as a digital nomad. Their main focus is those working – regardless of their location and time – in the field of technology, marketing and finance.
The tax implications for anyone working remotely in Croatia under the Digital Nomad Visa are currently being discussed by the government. It is expected that these details are finalized by the end of this year.
CZECH REPUBLIC: Zivno
The Zivno? That’s right, it’s Czech Republic’s Freelancer Visa (it makes you a trade license-holder). To obtain it, it is recommended to use a local agency. You need to register at the Trade Office, choose your subject of business and pay a fee. Income wise you need to prove a yearly income of €5587 which also makes it obtainable for the beginning digital nomad.
As a trade license-holder in Czech Republic, you are required to submit an annual tax return. You will be paying income tax, social security and health insurance.
DUBAI: One-year Virtual Working Program
Dubai has now launched their remote work visa welcoming you for a year. The visa gives you access to the same services of their residents.
You’re eligible for the visa if you can prove you earn an income of $5000 per month. That’s a higher eligibility requirement than other places, but it’s in line with the high living costs. For the visa, it doesn’t matter whether you have your own company or if you’re an employee.
Speaking taxes, Dubai is definitely an attractive destination as the income is tax-free.
ESTONIA: Digital Nomad Visa
Estonia has been amongst the top countries for creating a perfect landscape for digital nomads. In addition to the e-residency, which has already gained awareness amongst remote workers, they have introduced the world’s first Digital Nomad Visa on August 1st 2020. So, what’s the difference between the two?
The new Digital Nomad Visa gives you the right to stay in Estonia temporarily whereas e-residency doesn’t. E-residency gives you the rights to set up an Estonian company only. However, you’re probably reading this article because you do actually want to physically move somewhere yourself and, in that case, their Digital Nomad Visa is for you. This visa is available for both short-term and long-term stay: up to 90 days under a short-term application process, and up to one year under a long-term application process. The latter also includes 90 days of travel across the Schengen zone. You’re eligible for the Digital Nomad Visa if you can deliver proof of a gross income of at least €3500.
You’re eligible for the Digital Nomad Visa if you either have an active employment contract with a company abroad, conduct business through your own overseas company, or as a freelancer for clients mostly outside of Estonia.
When you’re staying in Estonia on a Digital Nomad Visa for more than 183 days a year, you are considered an Estonian tax resident. That means you have to lodge your taxes here.
FRANCE: Self-employed Person
With the Self-Employed Person Visa you are allowed to stay in France for a year. You’re eligible if you can prove a yearly income of €18,240. To obtain the visa, you need to have an address, however it’s possible to use the address of a friend or even of a short-term accommodation like an Airbnb. When applying, you also need a notary certified letter that declares you won’t work for a French employer.
When you’re working in France under this Self-Employed Person visa, you will qualify as a French tax resident. That means your worldwide income will be subject to French taxation, regardless of whether it is actually being transferred to France. On the first €10,000, you don’t pay taxes. After that, it goes up to 45%. In France, you also need to pay a social tax, which is around 20% for self-employed workers.
GEORGIA: Remotely from Georgia
Georgia has become more and more well known as a true digital nomads’ hub. They introduced a scheme to citizens of all countries aimed at freelancers and the self-employed. You’re eligible for their visa if your income meets the threshold of $2000 per month.
To apply, you fill out an application form with your personal information, show a certificate of employment and a letter of consent to undergo a quarantine upon arrival and obtain a preliminary confirmation. You’ll cover the expenses of the mandatory 14-days quarantine yourself and need to provide proof of a travel insurance that lasts at least six months.
You’ll fall into tax residency after having spent 183 days in Georgia and will have to pay Georgian income taxes which can be as low as 1% if you earn less than $155,000 per year.
GERMANY: Freiberufler Visa
Germany offers this visa carrying a beautiful German name which targets freelancers and remote workers: Frei Berufe means liberal profession. The visa is typically granted for three months. It can be converted into a residence permit while your visa is still valid. This residence permit for freelancing can be extended for up to three complete years.
For digital nomads from outside the EU the Freiberufler is particularly attractive because it’s a legal way to sidestep the strict Schengen Visa requirements which only allow you to stay for 90 days out of every 180-day period in the entire Schengen zone (which is most of the EU).
When you’re staying in Germany as Freiberufler, you become a tax resident. You have to register with your local Tax Registration Office (Finanzamt). That’s how you obtain a Tax ID (steuernummer), which you need to charge your clients and to pay taxes on your freelance operations.
ICELAND: Remote Work Visa
In case all those tropical destinations aren’t calling your name, you might get enthusiastic about working remotely in Iceland. You do need to have a significant income, as the threshold is set on $85,000 per year.
This high income requirement is set in place because when staying in Iceland under the Remote Work Visa, you don’t need to pay taxes.
MAURITIUS: Premium Travel Visa
This island in the Indian Ocean is offering a brand-new visa that allows non-citizens to stay for up to one year on the island. It’s aimed at tourists, retirees and professionals who are willing to come with their family and carry out their business or work remotely from the island. You need to prove you’re not entering the Mauritius Labour market, and your main place of business and source of income/ profits should be outside Mauritius.
When you stay 183 days or more (hence half a year), you become a tax resident and you’re liable to tax in Mauritius. The money you spent when using a foreign credit or debit card is not liable to tax on the island.
MEXICO: Temporary Resident Visa
Mexico might be a very attractive destination if you’re just at the beginning of your digital nomad existence. You’re eligible for the Temporary Resident Visa with a monthly income of $1620. Once granted the visa, you can stay up to four years. You might actually want to stay that long as there’s so many places to discover, with Tulum as the absolute number one digital nomad hub.
Most likely, being in Mexico under the Temporary Resident Visa, you don’t qualify as a tax resident. Mexico’s taxation system is in practice more domicile-based, so you’re only considered a tax resident when it’s your permanent home or the place where you have the most ties.
NORWAY: Self-employed Person Visa
Norway is definitely not for everyone, and not just because of its low temperatures almost all year round. You can only stay here if you are freelancing with a Norwegian country and earn at least €36,719 per year. However, if you happen to have this special link with Norway, this visa is perfect for you.
If you have spent at least 183 days in Norway in a year, or 270 days in any period of 36 months, you are considered a Norwegian tax resident. Tax residents in Norway are taxed on their worldwide income, net of expenses. Income tax rates go up to 38.7% and the social security tax to be paid is 14.1%. Also, your capital gains are taxed, usually at a rate of 25%.
PERU: Rentista Visa and Work Visa
No matter what, you are allowed to stay for 183 days a year in Peru, which is six months already. If you want to stay longer however, there’s two types of visas to consider. There’s the Rentista Visa, for which you’re eligible if you can prove a steady income of $1000 a month. Then, there’s the Work Visa as the CEO of your own company, applicable for many digital nomads. These visas allow you to stay three entire years and are suitable in case you wish to use Peru as your second or regular residence.
When staying in Peru under the Rentista Visa, you are not a tax resident and you are exempt from paying the annual tax.
PORTUGAL: Residence Visa for Independent Work or Resident Visa for Entrepreneurs
Another great location for beginning digital nomadism is Portugal. Lisbon has a huge international and vibrant community. There’s the Residence Visa for Independent Work and the Resident Visa for Entrepreneurs you can apply for. You are eligible for these visas if you can prove to have a monthly income of €600 and a valid health insurance. The visa firstly allows you to stay for a year which then can be extended for five years. If you’re still not done with the gorgeous Portuguese beaches, you can even get residency after that.
As a freelancer, you don’t need to pay social securities for a year. You have to pay taxes in Portugal if you stay for longer than 6 months.
SPAIN: Self Employment Visa
Both Barcelona and Madrid have amazing digital nomad scenes. If you’re self-employed, this visa is for you. It allows you to stay for a full year in one of the sunniest and laid-back European countries. You’re eligible for the visa if you can prove you have sufficient funds to “establish and maintain employment indefinitely”. Moreover, you need to pass a background check.
If you stay more than 183 days a year in Spain, you are considered a tax resident. As a freelancer or self-employed, you pay the same personal income tax as everyone else. Important to realize is that the different regions in Spain levy taxes differently, so you won’t be paying the same amount of taxes across the country.
URUGUAY: Residence Permit
As a tourist, you are already allowed to stay for a full six months. However, if you wish to stay longer, make sure you apply for a Residence Permit in the first thirty days after you arrive. You qualify for the permit if you can show you earn $600 per month.
You become a tax resident in Uruguay if you stay more than 183 days a year in the country, if you carry out activities in Uruguay or if your economical or vital interests are in Uruguay. For the latter, it is considered the case if your spouse and children are living with you in Uruguay too, hence it’s important to consider when you decide to bring your family with you.
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NOTICE: The content of this article is not to be considered as a legal opinion or tax advice. Wanderers Wealth does not hold itself out as a legal or tax advisor. If you want to receive a legal opinion or tax advice on the matter in this article please contact us directly and we will refer you to a legal practitioner.