While the first digital nomads
date back to the earliest days of widespread internet access and email, the trend
accelerated considerably in the wake of the pandemic in 2020. Once employers
begrudgingly accepted that employees could be just as productive from home as in the
office, it was easy to argue that they didn’t need to be constrained by geographical
region either.
In the wake of all this growth, it’s worth
taking stock of how the digital nomad has evolved, both as a concept and as a
practice that’s increasingly allowed by firms. For both employees who want to be
digital nomads and the companies who employ them, it’s important to stay on top of
this dynamic and fast-changing trend—it’s not going anywhere anytime
soon.
How many digital nomads are there in
2023?
Once a niche lifestyle that was typically
limited to self-employed individuals without a boss or company they have to answer
to, the digital nomad lifestyle has massively expanded with the growing acceptance
of remote work. A report by MBO
Partners estimated that 17 million Americans called themselves a digital
nomad in 2022, with 10% planning to spend the entire year outside the US and 47%
planning at least some international travel. That represents a massive growth of
131% compared to pre-2020 levels.
Worldwide, the number of digital nomads is
estimated to be about 35 million people. They have an average salary
of about $120,000 per year, and predominantly work in fields like marketing, tech,
communications, design, and e-commerce.
Which countries give out digital nomad
visas?
Perhaps unsurprisingly, countries have taken
notice of the trend’s expansion. In recent years, many more desirable locations,
such as Portugal, Spain, Estonia, and Greece, have formalized their visa options for
digital nomads, inviting them to work and live for varying amounts of time. The list
of non-European countries accommodating digital nomads include Indonesia, the
Bahamas, South Africa, and many more.
All of these options allow remote workers to
legally work and reside in their location of choice, rather than working illegally
on a tourist visa and relying on “visa runs” to renew. However, there are typically
minimum-income requirements to apply for this type of visa, which limits who can
apply to a certain extent.
While digital nomad visas may increase the
bureaucracy and paperwork involved in the digital nomad lifestyle, they also offer
the peace of mind and legal framework for employers to allow it. Overall, they have
helped the trend grow and mature for the better.
What are the challenges involved with employing a digital
nomad?
From immigration and tax to legal and
privacy/IT, there are a number of concerns and complicating factors for companies
who want to employ digital nomads.
Tax implications and legal
concerns
The first major issue is an employer simply
being unaware that one of their workers is working in another country, instead
assuming they are working “from home.”
This kind of “don’t ask, don’t tell” policy is
risky for both the nomad and their employer, as it can open up liability if the
nomad does not have permission to be working in a given country. That’s why it’s
best for corporate firms to craft HR policies that make it clear which countries
their employees can and cannot work remotely from or have time limits on how long an
employee can work out of the country. The last thing a company wants is to find
they’ve inadvertently made themselves subject to tax and employment law in another
country, simply by having an employee working from there.
It’s vital that a digital nomad do the
research and abide by all the tax requirements their digital nomad visa stipulates.
Keep in mind that American digital nomads usually have tax obligations both at home
and in the country they’re visiting. Digital nomad tax is complicated, and hiring a
professional with knowledge is essential.
Privacy and data liability
Another concern is opening up a company’s
privacy and data liability by having an employee conducting company business on
public or unsecured Wi-Fi networks. Employers should make it clear what they expect
of nomads when it comes to digital hygiene and privacy protection. This can include
measures such as using VPNs, encryption, and conducting any sensitive company
business from a secure network, rather than a cafe, hotel, or airport.
Why should HR cater to digital
nomads?
From a corporate employer’s point of view, it
may seem like a lot of work to put the policies in place that enable your employees
to work as digital nomads. But in reality, it’s a great way to attract and retain
talent.
By formalizing these policies and setting
clear boundaries around what you will and won’t allow, you can attract the types of
creative, dynamic, and talented individuals who will thrive at your company. Another
bonus: Allowing it can also mean lower overhead and less office space to house your
workforce.
What is the digital nomad lifestyle
like?
It would be easy to assume that the digital
nomad lifestyle is all cocktails on the beach with the odd Zoom meeting in between.
But it’s important to be realistic about what the digital nomad lifestyle requires
from both the employee and employer’s point of view.
While working in cafes, co-working spaces,
and, sure, sometimes the beach may sound ideal, the most common hassle that nomads
report is weak or unreliable Wi-Fi connections. Employers should set expectations
about what is reasonable. If a nomad is constantly offline because they’re
struggling to find an adequate connection to attend meetings, that’s an issue that
is affecting their performance and should be addressed.
Time zones are another important thing to keep
in mind. While the freedom to work from anywhere sounds ideal, it doesn’t mean your
colleagues will be awake when you’re online. Some companies set a maximum
time-difference allowance (say, within five hours of the HQ’s time zone) to ensure
that employees aren’t on the clock at opposite hours of the day to their
colleagues.
Stay in the loop with Newland
Chase
The digital nomad trend has come a long way
from its early days of dodgy internet cafes and guest houses. When done properly,
it’s a working arrangement that can be a win-win for both employers and employees.
An experienced immigration specialist can help you navigate the complexities of
border-crossing requirements.