Did you start working from home in 2020 due to COVID-19? Or are you a veteran digital nomad, looking for some place new?
Or maybe you have been a location independent digital worker for some time, but your home city or state became unlivable over the past year due to lockdowns, riots, and increasing taxes.
The nomadic lifestyle has become more challenging over the past year due to COVID-19 travel restrictions and border closures. Hence it might make sense to consider longer term options, and perhaps settle down in a digital worker friendly country for the next year or two until the dust settles a bit.
Countries that traditionally rely on tourism have been hard-hit by the pandemic, with many of them now scrambling to launch digital nomad visas in order to make up some of the lost revenue.
Here we outline eight of the best long-term visas and residencies for remote workers and digital nomads. But first, let’s answer the obvious question: Why would you want to be a digital nomad in 2021?
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Three main reasons you might want to become a digital nomad include reducing your taxes, lowering your cost of living, or to secure a second residency or citizenship.
For example, American citizens owe taxes on their worldwide income, even if they live and work outside of the United States.
However, if you live abroad, you can take advantage of the Foreign Earned Income Tax Exclusion (FEIE), and be exempt from US taxes on your first $108,700 of earned income (i.e. not investment income or interest).
You could also choose a country with lower taxes than your homeland, or consider countries offering special tax incentives to attract foreign workers and foreign investment.
Taxes for Digital Nomads
Keep in mind that you will generally become a tax resident of any country you live in for for more than half the year — and often much sooner.
In this article, we note when a country specifically exempts the visa holder from paying taxes, such as under the Barbados Welcome Stamp program. And in other cases, we include information about exactly how long you have to live in a country before becoming a tax resident.
However, we are not tax advisers, and we do not provide tax advice. This information is provided for reference and educational purposes only. You should always talk to a trusted tax adviser about your specific circumstances before making a decision.
Places like Mexico and the Republic of Georgia have a much lower cost of living than the United States and most of Europe, so choosing these countries for your next nomadic adventure could save you tons of money on food and housing.
Plus in these countries, you won’t have to give up the comforts you are used to, like fast internet and upmarket restaurants.
Finally, certain countries allow foreigners to acquire temporary or even permanent residency. That is better than a visa, because it is longer term, often comes with additional benefits, and in some cases, like Mexico, permanent residency does not even have to be renewed.
Residency can also lead to naturalization, which means being able to become a citizen after spending a number of years in the country, or holding residency there for a specific period of time.
Second residency, and even better, a second citizenship and passport, ensures you always have somewhere to call home outside of your home country. It means one government cannot totally control your right to travel, or dictate where you are allowed to live, earn a living, or raise a family.
Below we highlight a couple of countries, like Portugal and Mexico, where residency can lead to citizenship. If you want to learn more about acquiring a second citizenship, click here now to see the four ways anyone can qualify for a second passport.
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Here are the best options for you if you are a digital nomad looking to obtain residency and visa in 2021:
Bermuda hopes to attract remote workers and students to the Atlantic island to live and work there for up to a year.
Requirements: Valid health insurance.
Duration: One full year.
Bermuda has no income taxes, but it’s worth noting that the cost of living is pretty high in general.
This option is available not just for digital nomads, but also for remote employees of companies based outside of Barbados.
That company, by the way, could also be one you own. If you’d like a few other people in your company to work alongside you in Barbados for one year, that’s fine — you can file multiple applications for your company’s remote workers.
Requirements: A yearly income of at least $50,000
Duration: One full year.
Cost: $2,000 application fee ($3,000 per family)
Under normal circumstances, you would become a tax resident in Barbados. But the program’s conditions specify that applicants will not be liable for taxation in Barbados, even if they stay there the entire year.
Honorable Mention: Puerto Rico
Although Puerto Rico is a territory of the United States, it has its own tax laws.
Two of its tax laws used to be called the Act 20 Export Services Act, and the Act 22 Individual Investor Act. They still exist, but are now collectively referred to as Act 60.
The Individual Investor Act allows bonafide residents to pay 0% taxes on capital gains and investment income (although there are other costs to consider).
The Export Services Act allows bonafide residents of Puerto Rico to pay a 4% corporate tax rate for a business incorporated in Puerto Rico which provides services for customers outside of Puerto Rico— for example, research and development, advertising, any kind of consulting, project management, accounting, legal services, IT, telemedicine, and much more.
This makes it an excellent choice for US citizens who are freelancers or can work remote to reduce their federal tax bill. The United States is unique in demanding taxes from its citizens even when they live and earn money outside of the United States.
Here is yet another Caribbean island nation competing for your patronage.
Requirements: Evidence of employment or self-employment, income of $50,000 per year, and medical insurance.
Duration: Two years.
Cost: $1,500 for an individual, $2,000 for a couple, and $3,000 for a family
The government of Antigua and Barbuda has a full website dedicated to this residency program.
The Cayman Islands program is a bit more exclusive, and requires a higher income. And it may not be possible for self-employed or freelancers to qualify, since the small self-governing British overseas territory requires proof of employment.
Requirements: Income of $100,000 per year, $150,000 if married, and $180,000 if married with kids. Proof of health insurance. Proof of employment outside of Cayman Islands.
Duration: Two years.
Cost: $1,469, plus $500 for each dependent.
Based on the government’s website, they appear to be marketing this program to high-end clients looking to work from home while enjoying tropical beach-side living.
Requirements: Proof of Employment or Business Incorporation Certificate.
Duration: One Year.
Cost: $2,000 or $3,000 for a family of 4 plus $250 for each additional dependent.
Anguilla’s website has dedicated videos for nomads, students and families, encouraging them to apply for the visa to live and work remotely for a year.
Mexico does not have a program specifically geared towards digital nomads or remote workers. But its temporary residency permit is easy to acquire, and certain towns, like Playa del Carmen, just south of Cancun, are hotspots for digital nomads.
The low cost of living is also appealing.
Requirements: Proof of investments or a bank balance with a monthly average balance equivalent to 5,000 days of Mexican minimum wage per person for the past twelve months. In 2021, that’s approximately $36,000 per applicant, but most consulates still want to see a balance of $40,000or more.
Proof of monthly income (after tax) greater than the equivalent of 300 days of the Mexican minimum wage for the past six months. In 2021, that comes to about $2,100 per month (again, confirm the exact requirement with your consulate). Add $700 or so per dependent if you are not applying alone.
Duration: One year, after which it can be renewed for three years.
Another big benefit to maintaining residency in Mexico for five years is that it makes you eligible to become a citizen through naturalization, and gain a powerful second passport in the process.
As part of the European Union and Schengen area of Europe, Estonia’s Digital Nomad Visa allows you to travel throughout Europe during the duration of the visa (when borders aren’t restricted due to COVID-19).
Requirements: You must be a business owner (or employee) of a company incorporated outside of Estonia, or a freelancer with clients based mostly outside of Estonia.
You’ll need a monthly gross income of €3,504 (~$4,250). And you’ll need to prove that you’ve earned this minimum amount for at least six months prior to your application.
Duration: One full year.
Cost: €100 (~$120).
Please note that Estonian Digital Nomad Visa holders who stay in the country for more than 183 days will be considered Estonian tax residents. So, you’ll need to declare and pay local taxes, albeit at some of the more competitive rates in Europe: a flat 20% personal tax rate and no corporate income tax (except on distributed profits, which are taxed at 20%).
The Non Lucrative Visa program has historically been quite popular among retirees. If you’re still of working age, “non lucrative” means that you will have to bring your remote job with you, and not seek local employment in Spain.
Requirements: Between savings and investment accounts, you will have to prove that you have at least €25,560 (~$31,000) available to support yourself while living in Spain. The requirement goes up by €6,390 (~$7,750) for each additional applicant.
Or, you can qualify based on your income, but financial requirements vary based on which consulate you apply through.
You must also have comprehensive medical insurance.
Duration: Your residency is good for one year, after which it can be renewed in two-year increments.
Cost: A $153 application fee for US applicants, $612 for Canadians, and $86 for everyone else.
You can apply through your nearest Spanish consulate. Here is the list of Spanish Consulates in the US.
Requirements: To obtain residency under the D7 visa, you will need to prove that you have sufficient savings/income to sustain yourself for at least 24 months in Portugal. (Two years is how long your initial and subsequent residency permits are valid for.)
The official financial requirements are rather low, and tied to the Portuguese minimum wage (which in 2021, is €665 a month).
So, a family of four would need to prove they have €33,516 (~$40,500)) worth of income or savings to qualify. But that’s the bare minimum. It’s better to show at least a few thousand more.
Your local Portuguese consulate — where you’ll submit your residency application — can advise you about what minimum sum they’d realistically like to see. As with Spain, this is the bare minimum, and of course, it’s always best to show more if possible when you submit your application.
But if you don’t have the required savings, then you could possibly qualify based on stable, passive income only— ask your local consulate for more information.
Duration: Two years.
Cost: €90 (~$110)
During this time, you’ll become a Portuguese tax resident, so be aware of the high taxes that comes with this.
But you can separately apply for the Non-habitual Tax Regime. Under this program, for 10 years, you will not be taxed on your worldwide income. And your Portuguese income is taxed at 20%.
You can see Portugal’s visa information website here.
BUT… the law also states that if you have the necessary capital (number 3 above) then this alone can be sufficient to receive the visa. Because the law is vague, the officer reviewing your application has a lot of discretion.
And the paperwork requirements can vary significantly, based on what profession capacity you’re applying in.
Also, you’ll need a health insurance plan with €30,000 (~$36,400) of coverage.
Duration: Typically one year, but also available for three years, and it can be renewed.
Cost: €100 (~$120)
If you stay for more than half a year, you’ll become a tax resident of Germany. Freelancers cannot escape that. And if you’re a high-income earner, be prepared to face steep German taxes — as high as 45%.
This visa is also referred to as “Zivnostenske opravneni” or “Zivno”, which refers to a trade or business.
The program is not specifically geared toward digital nomads — if you are going to invest the time and energy to gain approval, you will likely want to spend a significant amount of time in the country.
Requirements: Proof of 124,500 CZK ( a bit under $6,000) in the bank, no criminal record, health insurance, and proof of accommodation in the Czech Republic.
Duration: Valid for one year, and can be renewed for two.
Cost: Monthly social tax of 1800 CZK (~ $84), Živno Fee of 1,000 CZK (~ $46), Visa Fee (may vary by Embassy): €100 per person (~ USD $120)
The true cost of this one might be payable in the time and frustration, as it appears to involve a fairly lengthy bureaucratic process.
If you’re randomly deciding on a place to work from for six months to a year, this might not be your best option. But if you have your heart set on Prague, the process should be navigable.
Most people will be able to apply for the visa at any embassy of the Czech Republic, as long as your country is on this list.
Requirements: A monthly income of at least $2,000 and health insurance covering the entire term of your stay. (Currently, due to COVID-19, a 12-day hotel quarantine is required on arrival, at your own expense.)
The program is available to citizens of 95 countries, including the US, UK, Canada, and Australia (see the full list here).
Duration: Good for 360 days
Cost: After 183 days of residing in Georgia, you will become a tax resident, and get taxed at a flat rate of 20%. However, using a tax incentive called “Individual Entrepreneur — Small Business Status” allows you to pay just 1% in taxes.
This 1% tax rate is applied to REVENUE, and not profit. So, this incentive is ideal for freelancers, contractors, remote workers (who can structure as contractors), affiliate marketers, sellers of digital products and other businesses, which typically have a close alignment between revenue and profit.
This can also lead you to eventually qualify for Georgian residency.
About 85% of the people living in Dubai are expatriates hailing from outside the United Arab Emirates. It’s a high-tech modern city, and you shouldn’t expect to save money living there.
Requirements: An average income of at least $5,000 per month, and health insurance coverage for the term for which your visa is valid.
Duration: One year.
Three main reasons you might want to become a digital nomad include
A number of countries offer easy one to two year residency programs for remote workers or digital nomads.
Barbados, Anguilla, Bermuda, Estonia, and Dubai are some of the latest countries to offer special deals on residency, with an easy application at a low cost.
Estonia offers a digital nomad visa which allows foreigners to live and work in the country for up to a year.
Other European nations such as Portugal, Spain, Germany, and the Czech Republic also offer visas that allow remote workers to gain residency in the country.
It’s long been popular for digital nomads to zip around Asia for a couple months here, and a few months there.
But that’s become harder in the days of COVID-19. And frankly, it was never efficient. When you are constantly moving, a significant amount of time and energy has to go into constantly relocating.
That’s why year-long digital nomad visas may be a more appealing option for those who love to travel, or just need to get away from their home town, state, or country.
And if you want to execute a broader strategy to give yourself more freedom, consider going with one of the temporary residency options, which can be renewed, such as Mexico, Portugal or Spain.
With a second residency, there is at least one other country that basically has to let you in.
And that is a great Plan B to have if you ever find your home country unlivable due to civil unrest, political instability, or extreme lockdowns.
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