How Countries Are Competing for Digital Nomads Now and In The Future

By Ciarra Maraj

Mountain views and blue skies draped behind? Niels Olsen , the prime minister of tourism in Ecuador, as he advocated for his country’s temporary stay visa.?

Fresh fruit and ocean sounds accompanied the prime minister of Dominica as he invited digital nomads to work in nature.?

Portugal’s slow pace and low cost of living inspired an American couple to retire early from their day-to-day hustle and bustle as millionaires.?

What do these countries have in common? The competitive need to convince remote workers to trade the big city pigeon coos for tropical bird chirps and low costs in their country.

The rise of digital nomadism is in full effect: over 40 countries in five of the seven continents are offering visas to attract remote workers. Portugal is the latest to create a visa specific to digital nomads. Estonia was the first country to provide a digital nomad visa in 2020, allowing workers to stay up to a year. But, digital nomadism has been around since the early 1980s, when Steven K. Roberts became the first to be referred to as a high-tech nomad.

In a 2021 study from MBO Partners , 15.5 million Americans identified as digital nomads, a 42% increase from 2020 and 112% from 2019. Millennials lead the movement: 44% claim to be digital nomads; 21% of responders are Gen Z.?

Since the pandemic halted foreign travel, countries needed to find creative ways to boost their economy. As a result, the digital nomad visa was born, encouraging foreign workers to stay in the country longer than the one to three months a regular passport permits.?

Most countries allow nomads to stay up to two years, and Thailand allows up to a decade on a temporary stay visa. In all countries, applicants must meet basic income requirements, have a clean criminal record, submit passport photos and have valid health insurance.

Digital nomads are not the ones to settle in one place yet countries are competing to attract and retain them. The questions are why and will it work??

Countries Find New Ways to Compel Digital Nomads

Olsen said Ecuador was the first Latin American country to offer a digital nomad visa when it created the Rentista Visa to restore tourism after the pandemic.?

More than 100 visas have been issued since its launch on Sept. 27, 2022, for International Tourism Day as the small west coast country of almost 18 million courts international workers, focusing on those from the U.S.

The Rentista Visa allows a temporary stay of two years. Digital nomads can expect to pay $450 for the application and processing, zero tax obligations, a discount on select hotels and a free sim card to access 4G and 5G data. Ecuador’s official currency is the U.S. dollar and remote workers interested in a visa need to make $1,350 a month, three times the country’s basic salary.

The low cost of living is an enticement.

“You can still be making $5,000 per month being employed for the international company, but you'll be spending about $1,000 per month here,” Olsen said, “and you can be in front of the beach eating fresh seafood, partying, having parties every night or having happy hours in a beautiful small town by the beach.”

The Galápagos Islands, about 600 miles off the coast, offer miles of hiking grounds and world-class wildlife viewing if beaches are not your preference. Visits to neighboring Colombia and Peru are also an option.

“Travel around Ecuador is super easy, and it's kind of Latin America in a nutshell,” Olsen said. “So you can be up in the Andes Mountains range, horseback riding in the volcanoes, or you can be [in] the Amazon Rainforest having Ayahuasca…so, there’s so many beautiful and great things to do in Ecuador.”?

Olsen predicts at least $1 billion will be injected into the Ecuadorian economy if current nomads spend $12,000 ($1,000 a month) by the end of their year.?

“But that's being super conservative because I think the remote workers spend a little bit [more than] $1,000,” Olsen said.?

The Caribbean Islands also created temporary stay visas to aid tourism, the lifeblood of their economy.

Income requirements range from $30-$100k a year, depending on the island. Most countries allow nomads to stay for a year, and others allow up to two. In all places, nomads can expect zero local tax obligations. Here is the breakdown of each Caribbean country offering a digital nomad visa and its fees:

• Barbados requires workers to make $50,000 a year. The application and process cost $2,000, but the approval process takes five days compared to Ecuador’s two- to four-month wait.
• The Cayman Islands require single applicants to make $100,000 a year. The application costs $1,469 and takes three to four weeks to be approved.
• Dominica requires applicants to make $50,000 a year with application fees totaling $900. Visa holders can stay up to 18 months. They built a village for digital nomads called “Work In Nature,” equipped with luxury accommodations and coworking spaces.?
• The Bahamas and Anguilla allow nomads and students to apply for a digital nomad visa. No income threshold or local taxes are required. Extra costs to use the University of Bahamas’ facilities may incur, and visa holders can stay up to a year. Application costs for Anguilla are $2,000.?
• Cura?ao does not have any income requirements and allows nomads to stay up to six months with an opportunity to renew for another six months. The application costs $294.?
• Grenada’s $37,000 income requirement is the cheapest in the Caribbean. The application costs $1,500. Visa holders can stay up to a year with a chance to renew.?
• Montserrat has the cheapest application cost of $500 and requires applicants to make $70,000 a year.
• Antigua and Barbuda requires applicants to make $50,000 and pay $1,500 in application fees. Workers can stay up to two years.?

Bermuda, though not a part of the Caribbean, has no income requirements and charges $263 for an application. They also offer a $200 customs allowance.?

Digital Nomad Life in Europe

Dianne and Guillermo Rastelli are expats who moved from Virginia to Guadalaraja, Mexico, to Portugal. Their story about retiring early as millionaires went viral . They went viral again when another millionaire reacted to their story, stating that moving to Portugal “is like cheating” because of its low cost of living.?

“That's part of putting yourself out there, right? You never know what other people are gonna say or think,” Dianne Rastelli told LinkedIn News.?

The Rastellis have known each other for 30 years and have been married for 18. They run a YouTube channel, called Seeking Paradise Bugs, to document their travel adventures and inform others about life abroad.

During the beginning of their time in Portugal, the couple found a gem in establishing residency.?

“We could get a EU passport for the EU citizenship if we stay here for five years,” Guillermo Rastelli said. “And we're liking it so much that we may be staying here for five years, because after that, once we get that EU passport, we can live anywhere in the EU.”

The process for obtaining a temporary stay visa in Mexico was easier than Portugal’s D7 because the requirements were less extensive.?

“So [Portugal] not only wanna see your finances,” Dianne Rastelli said. “They wanted an FBI report, they wanted you to have private insurance, they wanted you to have a bank account in Portugal with money funded for a year to support yourself.?

“They wanted you to have your NIF number, which is your tax number. And at that time, when we were applying to come over here was during COVID. So U.S. citizens were not allowed into Portugal, so we couldn't come over and open up a bank account and apply for the NIF and all of that. So we had to do everything online, which was also rather challenging…And then they also required that you have a six-month lease, so we had to get a six-month lease for a place, even though we weren’t going to see the place.”

Thanks to YouTube videos and Facebook groups, the Rastellis completed the process without hiring an immigration lawyer or visa service. But hiring someone can help alleviate the bureaucratic stress.

Sara Galis, founder of Welcome to Portugal, a Lisbon-based firm that helps the visa process, told CNN that 60% of her clients are from the United States, and most are applying for the D7 visa. According to the same CNN article, a 2021 Portugal immigration report showed that Americans represented just 6,885 people among Portugal's 698,887 official immigrant arrivals that year.

The Rastellis pay a reduced rate in Portugal taxes under the Non-Habitual Resident tax program, valid for 10 years. A tax break, but they are still responsible for paying U.S. taxes.?

“We can just do a tax credit for what we pay here on our U.S. taxes,” Dianne Rastelli said.?

“So, we don't get double taxed,” Guillermo Rastelli added.?

Traveling to Portugal or any other country outside of the U.S. offers a different feeling.??

“The whole vibe is very relaxed,” Guillermo Rastelli said. “So compared to the United States, which was a fast rat race [with work] and everything here, it's like a turtle.”

Unlike the Caribbean, nomads in Europe will be responsible for paying taxes after 183 days. Estonia charges taxes after a year instead of six months. A workaround is paying taxes to the country you live in or leaving before 183 days. Malta and Romania exempt digital nomads from paying taxes. In all countries, nomads who apply for a visa must have proof of housing.

Income requirements for European digital nomad visas or temporary stay residence permits are higher than in the Caribbean, but the application and processing costs are cheaper. Portugal’s digital nomad visa launched on Oct. 30, 2022,? and Spain’s will at the beginning of 2023.

Application costs include the application and processing fees, and visas are valid for a year unless stated otherwise:

• Iceland is the highest, requiring applicants to make $7,000 a month. Workers can stay for six months.??
• Estonia requires applicants to make $3,682 a month. Applications cost $105.?
• In Croatia, applicants must make $2,479 a month. Applications cost $100.?
• Malta requires applicants to make $34,063 a year. Applications cost $344.?
• Romania requires applicants to make $3,890 a month. Application costs are unknown.??
• Greece requires applicants to make $3,679 a month. Applications cost $78.
• Norway requires an income of $37,538 a year. Applications cost $630.?
• Spain requires an income of $2,109 a month. Application costs are to be determined.??
• Hungary requires an income of $2,045 a month. Applications cost $115.?
• Cyprus requires applicants to make $3,679 a month. Applications cost $73.
• Latvia requires an income of $3,022 a month. Applications cost $63.
• Portugal applicants must earn more than $2,900 a month. Visa costs are $189.?

Life As a Digital Nomad

What is life like as a digital nomad??

“We just change plans all the time based on what we feel like doing at that moment,” said Eduardo Borges , a serial digital entrepreneur who has been location independent for 13 years.

Borges is also known as the first Brazilian digital nomad after quitting his job at Citibank to become an SEO expert and create the life he wanted. He founded Flipper Spy, an app to help people buy and sell digital businesses.?

“So far I've lived in five continents, 19 countries and partied in more than 50 [cities],” Borges wrote in an email while on a boat outside of Phuket, Thailand.

Borges has been a digital nomad for 13 years, and freedom of choice continues to draw him in.

“You have less stress when you can be wherever you want,” Borges wrote. “Being forced to live in a place you don't really like nor belong can be really draining. If I'm living in a city for a few months, going to the same bars every weekend, having lunch with the same friends and talking about the same topics, at some point I'll realize: ‘OK, there's nothing new for me here, so, time to leave my comfort zone.’ Then I just book a flight ticket and go. Everything gets better when I land in a new place.”?

Frederico Maia Arantes , CEO of Meteor Software, agrees that new people, food and culture were the best part of his two-year digital nomad journey with his wife.?

“I think one of the places that it was very unexpected was Croatia,” Arantes said. “I didn't know basically anything about them. And there is a lot of history there. So it is very nice to go to a place where sometimes you don't expect much, and then you realize that there's a lot to learn about that place. So we love history now.”

Arantes and his wife traveled to France, Croatia, Switzerland, Italy, Spain, Ireland, the UK, Portugal and the Netherlands. He paid taxes to Brazil, his country of origin and because he had a business registered there. The Arantes stopped being nomads because, though it was amazing, they felt two years was enough and wanted to move to the next phase of their life.?

“Right now my wife is pregnant… we were planning to do that,” Arantes said. “So having a fixed place, to have a baby, to be closer to our family, it was a new priority in our life.”?

But, on a more serious note, Borges mentioned solitude as an initial downside.

“You don't have many friends to hang out with in new cities, sometimes you want to grab a drink and laugh with friends on a Saturday night but you don't know anyone in that city,” Borges wrote. “At the same time, that is a good thing, because it forces you to make friendships (and that's why I always prefer to travel alone).”

Solitude is no longer an issue for Borges, but his current challenge should cause you to think deeper about your choice to become a digital nomad. While the atmosphere, the sights, the little to no taxes and happy hours might draw you, do not forget to consider this one thing.

“Work productivity,” Borges wrote.?

“It's really hard to be an active traveler and perform the best you can at work,” Borges continued. “Our brain doesn't work like that, especially when you just arrived in a new city and still don't know where to go for lunch, where the gym is, how to buy water or find a cleaning company.?

“Every new location you move can take a few weeks of adaptation, which basically impacts your capacity to work properly. That's why we become slowmads, staying at least three months in a country before moving.”?

How you receive your wages is another thing to consider when debating whether you should be a digital nomad. HR departments are starting to crack down on their policies because employers often need to register with the country and pay taxes when employees work from there.

“What a digital nomad basically does is [open] a company and bank account in a country with low or no taxes and [get] paid through it,” Borges wrote. “Though I won't say it's an easy process, KYC is our biggest enemy. If you want to make a digital nomad angry, just ask him for a proof of address. It's always a nightmare.”?

KYC stands for “know your customer/client” and is an anti-money laundering and anti-terrorism financing initiative that requires customers to verify their identity and address. But, if you do not have an address, you cannot open a bank account, and cannot obtain an address without opening said bank account.?

Is the Future Digital Nomadism?

Thailand’s digital nomad visa tries to create new industries and supply chains while boosting tourism. The hope is to attract workers from more than 10 industrial or technological fields, such as electronics, electric vehicles, defense and medicine. Companies would no longer have to hire four natives per foreign employee, a rule put in place before the movement to protect the workforce. Visa holders would pay 17% in taxes, half of the standard 35%. Applicants would have to make $80,000 a year, and the application costs $1,370. Thailand will allow visa holders to stay for up to a decade.?

More countries will adopt these temporary stay visas permitting nomads to stay in the country longer. Though, it is unclear whether nomads would remain for that long instead of moving around to see new sights and avoid becoming tax residents in a country. On a wider scale, gentrification is not a consequence yet, at least in Ecuador, Olsen said.

“We're very, very, very far [from] a gentrification problem in Ecuador,” Olsen said.?

Increased demand and competition to house nomads boost housing prices in smaller towns. Digital nomads can create jobs and bolster the country’s capital. But, in some places, locals are not happy with digital nomads’ presence.

Everyone interviewed for this story reported pleasant interactions with locals. However, Borges was robbed in Bali and the Rastellis were robbed in Mexico.?

“I personally never felt offended by a local, I just understand that's how it works and most importantly, that bad behavior might happen because of personality, not nationality,” Borges wrote.

Having the freedom to move around became more realistic during this work-from-anywhere movement. Temporary stays in one country might not be ideal if you possess a strong passport that allows extended stays without paying taxes. But whatever you choose, be ready to meet other nomads and have unique experiences.?

“In the end, we are just a big family living around the world that prefers to say ‘see you soon, in another country’ instead of just ‘goodbye,’” Borges wrote.?

Top Takeaways

How Countries Are Competing for Digital Nomads Now and in the Future

• ?In over 40 countries on five continents, a temporary stay visa for digital nomads is available.?
• Some income requirements are higher than others because countries target people of certain net worth.?
• After 183 days, you pay taxes in some countries on a digital nomad visa.
• Factors to consider when debating whether you should go are income, the method of receiving wages and your work productivity.?
• 15.5 million Americans identify as digital nomads, a 112% increase from 2019.