Digital nomads are freelancers or remote workers who don’t have to be at the office for providing their service and make a living through it. Rather they work by using technology as location-independent people living in a nomadic lifestyle.
What is digital nomad?
They are also known as modern nomads as a result of their lifestyle. They are still in business life; however, they permanently travel, they can live in a foreign country. Long term travel is one of the most attractive opportunities that digital nomadism offers.
So they can work from anywhere in the world that has wifi and telecommunication technologies. Cafes, beaches, libraries, hotels, co-working spaces, coffee shops might be listed as some of the places that these remotely working individuals, digital nomads, can work from.
Not only do digital nomads work while they’re on the road, but also their working style is very advantageous under current lockdown situations and its necessities. It can be said that the lockdown that we have been experiencing in the last years because of the Covid-19 pandemic has given rise to the digital nomad population.
Where does the term “digital nomad” come from?
In their book titled “The Digital Nomad”, writers Tsugio Makimoto and David Manners predicted the birth of this style of working which has opportunities of communicating powerfully and working from anywhere by using technological devices.
In what areas do digital nomads work?
Actually, a digital nomad who is working remotely may work in many areas such as writing, IT, consulting, visual and audio media, design, teaching, marketing, translation, social media and so on. Any job area that is sustainable with telecommunication opportunities and by using digital devices are open to digital nomads for them to work anywhere in the world and make a living via remote work.
Some digital nomads who have various clients might also combine different jobs to earn while travelling. Others prefer to work with a client or with a company on a full-time, part-time or freelance basis by contracting to guarantee the amount they earn.
Is it legal to be a digital nomad?
Many digital nomads who work remotely travel as a tourist holding a tourist visa. This gives them to stay in a country between 90 and 180 days (of course, differing depending on the country and the freelancer’s nationality). That means you can legally stay in a country and be a digital nomad while travelling. So the answer to the question “Is it legal to be a digital nomad?” is yes.
You may get a work visa to reside and work in a country but in this case, you need to stay longer and make a long term contract so you can’t be a nomad by obtaining a working visa.
In recent years, there is a special visa on the agenda of some countries for only digital nomads.
Many countries like Spain, Croatia, Costa Rica, Estonia etc. offer digital nomad visas for freelancers who want to work in a country other than their home country and travel while doing so. Although it is very good news for digital nomads to have a visa launched for only their working style, it is relatively new and requires some planning which might contradict their spontaneous way of living.
It seems like it will be more common to live as a location-independent digital nomad. Also, many more countries will regulate their laws according to the digital nomad lifestyle. So let’s wait and see the new improvements in remote work.
Getting paid as a digital nomad
A digital nomad who is a remote worker needs to take into account the possible transaction fees while representing their services to clients all over the world.
There are, of course, certain agreements on transactions between banks of different countries. And they generally apply fees and additional payments if you transfer money from one to another. It is always a wise choice to research and get knowledge about these beforehand to prevent paying charges for international money transfers.
If your client transfers money in a currency other than the one you have a bank account in, there will probably be an extra payment because of the exchange rates. To not losing money to the banks in this manner, you may use systems like Paypal and Wise.
Although these systems also have fees to transfer money, many digital nomads prefer these digital money transfer systems to pay lower fees and make transactions more quickly and easily.
Do digital nomads pay tax?
There are two types of taxes mainly: personal and corporate taxes. Personal taxes are the ones paid in your resident country based on your earnings and corporate taxes are the ones companies pay depending on their profits, of course, after reducing their costs in the country where the business is held.
It is also possible to avoid tax completely if you are a non-resident in also your home country and in any other country while travelling. Being a non-resident requires to be away for long periods of time (mostly 183 to 349 days) and this period may differ depending on the country’s laws. So it is better to check your resident country’s laws on this issue. However, it is not guaranteed that you won’t be reached out by tax authorities of your resident country when you return there. So it’s somehow a risky option.
Reducing the tax you pay as a digital nomad
You may set up a company and show yourself as an employee by paying a salary to yourself. By doing so, you may reduce the tax amounts you pay because individuals and companies need to pay different amounts of taxes.
Setting up as a sole trader may be a good option because you will pay taxes on profits by choosing this option and reduce costs under your company.
Lastly, being a digital nomad gives you the freedom to choose the location you work and there are many options to reduce taxes and transaction fees you pay via various options. And in this age of technology, it seems like many countries adapt their laws by considering this new style of living.
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