Digital Nomads Could Ease Economic Turmoil In The Tourism Industry

With tourism on its knees thanks to COVID-19, what could possibly save economies in some of the world's tourism hotspots? The answer: remote workers and digital nomads.

Although digital nomads have been a thing since the mid noughties, today you can't set foot in a major city or tourist destination without wading through a sea of bloggers, YouTuber's, and remote working devs. And why the hell not?

When you're making a decent wage and you don't need to be in Dullsville, Ohio for most of the week, why not set up camp in Dubrovnik or Barcelona?

And that's the thing. Many digital nomads are on incomes that are relatives in their own countries, but their income can go a lot further in places like Colombia. This is what many governments are starting to realise.

The average US coder makes something in the region of $85,000. A full-time digital marketer can be making anything from $20,000 to, well, the sky is the limit.

Compare that to a backpacker in Colombia. Many are travelling on a budget, keeping their spend under $30 a day, which they do for maybe a few weeks to a month at the most.

A remote worker will spend money on rent and utilities. They'll probably enjoy a few high-end restaurants, go to events, maybe even employ a local to do their housework or cooking. In short, the digital nomad is a source of money that keeps on giving. So long as they are resident.

They are like having a high-paid resident (although they aren't necessarily paying taxes - more on that in a moment).

So, how does this work with the new generation of digital nomad visas?

OK, so how does a digital nomad visa differ from a regular tourist visa? Surely people have been working in places like Chiang Mai or Costa Rica for years, with just the inconvenience of an occasional border run. No big deal, right?

The joy of the digital nomad visa is that it legitimises your existence. You can finally get a long term pad that isn't an Airbnb, sign up for WiFi in your apartment, and maybe even make some plans to stick around.

And for some, there is even the eventual promise of permanent residency. Countries like Estonia and Italy are very attractive as their passports offer unfettered access to the European Union. After a five year residency, made possible by a rolling digital nomad visa, you'll be eligible to apply for permanent residency.

And then after that, you're on the road to citizenship if you want it.

Sounds expensive right?

Well, it depends where you want to go and live. Dubai and Abu Dhabi have rolled out digital nomad visas, which give you tax free access to the infrastructure of the UAE including schools and utilities.

The catch? You need to be taking home at least $50k a year, and you need to have your own business, or work for a business, that doesn't operate from the Emirates.

Contrast this with Mexico, where you only need to be making around $1,620 a month, and pay the roughly $100 visa fee. They also don't care who you work for, so long as you got the numbers in the bank. Suddenly Cancun seems like an attractive place to live year round.

Some countries do have a complex list of requirements for entry. Italy requires that you either work for a local business, or that you are setting up a local business and you intend to hire a local.

Portugal has a very low income bar to entry, but you do need to pay local taxes on your income.

There isn't a blanket rule around applying for digital nomad visas, and the list of countries offering these visas is already quite long. Some countries such as Jamaica or Mexico don't even advertise their visas as 'digital nomad' visas per se, but long stay visas.

The best thing to do is keep an eye on the press and search for digital nomad visas or long stay visas for your target country.

For most of these visas, you need to have a business established in your home country, so your tax will still be going home. Americans, take it as read that you'll always be paying the IRS, whatever you do (unless you renounce citizenship).

Some visas, including the German freelancer visa, do require local taxes paid.

But for most, tax isn't payable to the local government, just the visa fees.

Post COVID-19, we're going to see a lot of people hungry to get back out there and explore. I for one am planning my own escape, having lived in Thailand and Spain as a remote worker in recent years.

The problem was often the hassle of border runs or understanding some of the red tape. But with these digital nomad visas, the borders of the world are less of a hinderance to those of us who wish to change our surroundings and enjoy life in a new culture.

So, where are you planning to take your laptop next year?