Is it Legal to be a Digital Nomad? — Andy Sto
Digital nomads are people who use the internet and technology to do their work while travelling. More specifically, they are people who do remote jobs while travelling from one country to another.
Digital nomads usually stay for a period, longer than a tourist but shorter than an expat, in the country of their choice, working for clients online. In many cases, digital nomads benefit from cheap living costs in the countries they visit to fund their travels and have a good income.
Digital nomadism has been on the rise over the last few years and with the rise of this culture, several questions arise about its legality.
Here we need to note that this article does not constitute any legal advice; it is more of a discussion of the current situation of digital nomadism.
Is being a digital nomad legal?
Well, the short answer is yes. The more accurate answer is that there is nothing illegal about being a digital nomad.
Why is the answer not a clear cut yes? Well, the thing is, digital nomadism, however how long it has been around, is a new type of work culture.
Most immigration laws were written before the era of the internet and thus they haven’t been updated to keep up with the new trends in the work culture, like remote work, digital nomadism and in some cases even freelancing.
There are many aspects of the digital nomad lifestyle that fall within a grey area of the law, because as we said above, most labor and immigration laws were written before the internet era. Another reason for this, is that these laws consider work as something to be done in an office or a physical space, they still don’t have regulations to cover work that can be done remotely.
We will try below to give you a better picture of what elements of being a digital nomad, can fall in the grey area of laws and international regulations.
Most digital nomads travel on tourist visas, which allow them to stay in different countries in a range between 90 and 180 days; depending on your nationality and the destination country laws.
What are the other options? getting a work visa beats the whole purpose of digital nomadism. It requires a contract and a long-term stay, so it can’t be an option in this case.
Another option that has emerged recently, is a special visa for digital nomads and remote workers. Some countries like Estonia, Croatia, Czech Republic and Costa Rica; cities like Dubai and islands like Cayman island, Barbados and Antigua & Barbuda offer a visa dedicated to remote workers and digital nomads.
Some nomads argue, that even these visas beat the purpose of their lifestyle. As many of these visas require pre-planning, while for digital nomads, the freedom and lack of planned movement is part of the reason they signed up for this lifestyle.
These visas however are relatively new; we will have to wait and see how they apply.
Legally, you are not allowed to work when you are on tourist visa. However, these laws were put to prevent visitors from taking jobs from locals, which doesn’t apply in the case of digital nomads.
Will the police catch you if you open your laptop on the beach, or if you visit a co-working space? Theoretically, it can happen. However, the police authority turns a blind eye to this for 2 reasons, first it’s a legal grey area; you will be doing nothing illegal according to the current text. And second because at the end of the day, you are a tourist, bringing money into the economy without taking jobs from locals.
Most digital nomads will advise you to respect the duration restrictions of your visa, and keep a low profile when working, just in case. Go about your work, keeping in mind that there is a very small chance someone might ask you questions.
It also helpful to talk to digital nomads who have been or still are, at the destination you want to be. Specifically, about the legal situation there and if there any practices or advice to follow.
Another complicated legal aspect of digital nomadism that is a major grey area; whether and where digital nomads pay taxes.
For American citizens, it’s more of black and white situation; they are taxed based on citizenship and not location.
For non-Americans, things get a bit blurry. The fact is, you have to be a tax resident somewhere; many nomads choose to pay taxes in their home country, and avoid getting into the complex world of international taxes.
If you don’t want to pay taxes in your home country, you can de-register there and choose to keep moving from one place to another, fast. However, the legality of this can be disputed.
Some nomads choose to establish residency in favorable locations. These include, no tax countries, like The Bahamas, UAE and Bermuda; or a territorial tax country like Costa-Rica, Gibraltar, Malaysia and Hong Kong, where you taxed only for what you earn there.
Other countries like Greece, offer special tax cuts for digital nomads in an attempt to attract them.
All in all, the case of taxes, has many elements at play. Thus, you need to consult with an expert who has knowledge of international tax laws to advise you on what’s best and legal for your situation.
The conclusion is, digital nomadism is new, and there are many grey areas when it comes to working remotely while travelling. However, this doesn’t mean that you are doing something illegal by being a digital nomad.
You need to familiarize yourself with the laws of your destination regarding visas and remote work (if they exist). You can also talk to nomads who have been there and learn from their experience, that way you can almost always guarantee that you will have a pleasant experience.
As the culture of digital nomadism keeps rising, it is certain that countries and legal bodies will start drafting laws to cover different aspects of it.
Do you think there should laws governing digital nomads?
Originally published at https://andysto.com on March 28, 2021.