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The Rise Of The Digital Nomad

The Spanish government stated in the autumn of 2022 that it intends to introduce a new year-long visa aimed at third party nationals who are working as digital nomads. They say that this is also likely to apply to close family members (such as spouses and children), and that it can be extended for up to five years. They plan to include some tax breaks, too. We will be taking a look at this initiative in more depth below.

New visa for digital nomads in Spain

As reported by the Guardian in October, the new visa will be available to digital nomads who work remotely for companies outside of Spain, and who derive around 20% of their income from Spanish companies.

You will need to be able to demonstrate that you have been working remotely for a year, must have a contract, or, if freelance, must be able to show that you have been working for a company outside Spain. You’ll need to have a clear criminal record, a Spanish address, and proof that you can be self-sufficient. If this sounds a little vague, it’s because the legislation is still being worked out.

As mentioned, there will be tax breaks as well. For your first four years, you will be taxed at 15% rather than the current 25% base rate. If you’re earning a lot, and living in Andalucia or Madrid, you may be eligible for the recent tax allowance aimed at wealthy residents. It is expected that the minimum income will be set at around €2,000 per month.

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Advantages of being a digital nomad in Spain

The Guardian reports that Madrid, Valencia and Barcelona are already popular with remote workers. Barcelona in particular is trying to move away from a tourism-dependent economy and set up as a tech hub, and it’s proving appealing to a number of start-ups, many of which use English as a lingua franca.

The Spanish authorities are trying to streamline the bureaucracy as well. At present, Spain is not particularly competitive in relation to nations such as the UK or the Netherlands when it comes to setting up start-up companies. It can take up to a month, and the bureaucracy is typically complicated, but the government is due to bring in legislation in order to make this a smoother process.

However, from the point of view of the digital nomad, Spain has some distinct advantages, namely high broadband speeds (at 148Mbps, speeds are twice that of the UK) and low rents. Although property experts have pointed out that higher wages amongst digital nomads from places like the UK and the USA are driving up Spanish rents.

Rising numbers of digital nomads

Spain is not the only country to start looking seriously at incentives for digital nomads. The phenomenon has been growing for some time, but has received an injection of rocket fuel from the pandemic and the inevitable change in working practices. Working from home became necessarily much more commonplace, and there have been articles in the UK press recently about working from pubs (you can pay a £10 daily package for lunch, WIFI access and electricity). All this has resulted in wider horizons on the part of many aspiring expats.

Forbes reports Etias Visa’s comment that “visas for digital nomads fill a legal vacuum for remote workers who wish to spend short or extended periods of time abroad working independently. These professionals can take their job with them anywhere they go. (Usually they only need a laptop and an internet connection.)”

Other countries offering incentives for digital nomads

Spain is only one possibility for relocation. The Migrant Policy Institute reports that at least 25 countries offer digital working visas, and this is increasing. Croatia, Estonia, Georgia, Latvia, Malta, Norway, Iceland, Greece and the Czech Republic offer visas for digital nomads with options for extensions beyond one year. Germany also offers a similar visa, but that is valid only for a single year.

But this is just in Europe alone. Many digital nomads head further afield, to places such as Thailand and Malaysia – currently the only two South East Asian countries that offer special visas for digital nomads. As with other places, you will need to be able to prove a minimum income: US$24,000 in Malaysia and US$80,000 for two years prior to your application in Thailand. Many may regard the latter as not reflecting the income stream of the average freelancer.

You will have been able to apply for Malaysia’s 12-month DE Rantau Nomad Pass from 1st October 2022, at a cost of around US$215. If you are a freelancer or a contractor who works in certain sectors, such as IT, or a remote worker who is employed by a non-Malaysian company, you will be eligible, but do check the application criteria, as the new visa doesn’t apply to all digital nomads. There is a three-month minimum stay requirement. You will be able to extend it for a further 12 months, and it will cover your close relations.

Thailand’s Long-Term Resident Program was initiated in September, and this will cover, among other categories, “Work-from-Thailand Professionals” (this includes digital nomads). It will cost around US$1,300 to apply for this from within Thailand. Application criteria is stringent – as well as the steep income requirements above, remote workers will also need to be employed by a stock exchange listed company. If you’re working for a private company, then it must have a combined revenue of at least $150 million in the three years prior to your visa application. You’ll also need to be able to demonstrate five years’ prior experience in the relevant field.

Reuters has recently reported that a digital nomad visa might be forthcoming in Indonesia. Bali is a particularly popular area among digital nomads, but it is not clear which visa these people are currently using. The Indonesian tourism minister said in September that nomads can work on the B211A visitor/social cultural visa, but there seems to be some doubt about this as the legislation is not yet in place. If you are thinking of working remotely in Indonesia, it is worth thoroughly checking this out.