Countries are experimenting with special telework visas for “digital nomads”


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Achieving the expat lifestyle once meant finding a job in a faraway land or bouncing back on short-term tourist visas. Today, a growing number of countries allow you to take your current job to a faraway land, with a bit of paperwork. In a decade, immigration barriers and tax disincentives for globetrotters could be looser.

Last year, countries hungry for tourists and talent – from Estonia to Bermuda to Georgia – implemented special temporary visas (some valid for a year or more) to attract affluent mobile professionals to the country. looking for an exotic escape from the routine.

Consultants who work with businesses and expats claim that these so-called digital nomadic visa programs are an experiment to support trade and tourism by harnessing the economic power of the urge to travel. The pandemic’s toll on international economies and travel has prompted more countries like Costa Rica and Croatia to consider visas for economic growth.

If visas help boost economies, “we think other countries will jump on the bandwagon,” said Dave Cassar, executive director of Virginia-based MBO Partners, a provider of independent professional assistance services.

Industry analysts believe the Estonian Digital Nomad Visa program, the first of its kind in the European Union, could prove to be a model for other EU member states.

Estonia has for years allowed non-residents to legally establish an Estonian business online, but without travel and residence rights. Launched in August, the digital nomad visa allows people working for companies registered abroad and freelancers with a predominantly foreign clientele to stay in the country for a year as long as they can do their work from their computer and have a monthly income of at least € 3,504 or $ 4,300. Visa holders staying more than 182 days per year are subject to 20% income tax in Estonia.

In Georgia, freelancers, full-time employees, and business owners demonstrating a minimum monthly salary of $ 2,000 can apply to stay there for at least one year. The one-year “Work From Bermuda” visa offers the right to reside in Bermuda to applicants with a clean criminal record and with “substantial means” or a “continuous source of annual income”. Covid testing requirements still apply

Learn more about expatriate work

More than 10 million traditional and self-employed workers in the United States combine remote work and travel, according to an MBO survey published in 2020. The nomadic population is predominantly made up of men, with a significant share working in the fields of technology. information, education. , training, sales, marketing and consulting, according to the survey.

Last year’s shift to remote office work has dramatically increased their numbers. The number of people who will choose to decamp abroad does not only depend on the easing of visas.

One of the biggest hurdles is U.S. tax policy, which requires even those who live and earn money overseas to file an annual tax return with the Internal Revenue Service. Almost all other countries impose taxes on individuals based on their residence, not their citizenship.

The United States has bilateral treaties with many countries to limit double taxation, and the tax code allows expatriates who earn income overseas to claim credits and deductions to help offset debts.

The offsets do not mitigate other types of taxes owed to foreign countries, such as value added and wealth taxes. And many Americans abroad are still exposed to double taxation, including on Social Security payments and foreign retirement or retirement plans.

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American Citizens Abroad, an advocacy group from Washington, DC, lobbied Congress to take a more residency-based approach to taxation. His biggest victory to date was to have a member of Congress from North Carolina propose a bill in 2018 that would allow expats meeting the definition of a “non-resident citizen” to avoid to pay US taxes on income earned abroad.

“It was a huge victory for the community because they recognized there was a problem,” says Marylouise Serrato, executive director of American Citizens Abroad.

The residency-based tax proposal never left the House Ways and Means Committee, but the group is hoping that a lasting trend towards telecommuting could boost the momentum behind a more expat-friendly tax regime.

“If there is a trend towards more remote work and more work outside the United States, that will become more of a problem,” said Charles Bruce, legal counsel for American Citizens Abroad. “We are totally the outlier in the world.”

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Write to Jacob Gershman at [email protected]

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