The immigration angle on Digital Nomads – opportunities & risks of a future way of working

In reality the concept presents about as many challenges as it does opportunities. How do I maintain productivity? How do I motivate myself? How do I deal with the emotional challenges of a nomadic lifestyle? Over the past couple of years that has been plenty of analysis on how to deal with these challenges, however there has been comparatively little analysis on probably the most fundamental challenge – how to do it legally.

What is a Digital Nomad?

When researching this article, I was surprised to learn that the definition of a Digital Nomad is nothing new. Whilst the concept is the new hot topic in global mobility, one of the earliest known uses of the term was in Tsugio Makimoto and David Manners’ 1997 book Digital Nomad. This came as surprise given that this predates most of the necessary tools required to work remotely such as wireless broadband, high performance laptops and cloud based applications, however the type of work Digital Nomads perform has changed drastically since the mid-nineties. 

Simply put, if you can perform your job on a laptop then technically you could be a Digital Nomad – why go to the office every day when I can work anywhere that I can get an internet connection? It goes without saying that a nomadic lifestyle is not for everyone, and your boss might not be too happy with you being in a completely different time zone, however for a certain groups it is a very appealing lifestyle.

Many Digital Nomads tend to come from developed nations due to the fact that their passports given them greater freedom to travel visa free than other nations. For example, a German passport grants the holder visa free access to 101 other countries, whereas an Indian passport only grants the holder visa free access to 20 other countries. As a result, many Digital Nomads tend to be legally classified as tourists in the countries that they are working, which presents all sorts of risks both from a tax and immigration perspective. 

What is a “Digital Nomad” visa?

Simply put, a Digital Nomad visa is a visa for someone who wants to work in a country / territory other than their country of nationality and also wants to have the freedom to work in other countries / territories at their leisure.

Current examples of Digital Nomad visa programmes vary considerably. Generally speaking the applicant must either have an employment contract outside the host country, be self-employed by a company registered outside the host country, or be a freelancer with regular income and client contracts outside the host country. Obviously every country will have their own specific requirements; however these are generally common requirements.

Of course, there are government fees to be paid and these vary significantly, ranging from a few hundred Euros in Malta or Montserrat, to thousands of dollars in some Caribbean locations.

According to the European Union’s website, 25 countries around the world have visa programmes specifically designed Digital Nomads. Some examples include Germany, Italy, Thailand, Indonesia and the majority of the Caribbean nations. 

The never ending arms race – technology Vs the law

There are few certainties in life, however technology being one step ahead of the law is one of them, and immigration law is a perfect example of this. Even in the most advanced economies the majority of immigration laws were drafted in the pre-internet age – in the United Kingdom the key piece of legislation which underpins the immigration system was enacted in 1971. As such, even though many immigration systems have adopted digital principles, the basic underlying assumptions regarding work have not kept up with reality. As a result, most immigration systems focus on the physical location of the worker rather than the location of the customer / project / deliverable. For example, a team of software developers can be spread around the world and all be working on the same project thanks to collaboration tools and cloud based systems.

Over time legislation will develop and attempt to address some of the challenges presented by the concept of the Digital Nomad, however a key area which is going to be very difficult to address is what I am going to call the grey zone. 

For the purpose of this article I am defining the grey zone as the area of overlap between tourists and workers, and it is best explained using two example scenarios;

Scenario 1 - A solicitor takes a family vacation with her partner and their children. They are all American citizens and decide to come to the UK for two weeks to see the sights. The holiday happens to fall at a very busy time of the year for the solicitor, and as such she decides to take her laptop with her so that she can catch up on work in the evening. 

Scenario 2 – A couple of years later, the solicitor’s brother moves to the UK and she decides to visit him for a few weeks. Her firm has a London office, so in order to avoid taking any leave she agrees with her firm to work from the London office for 6 weeks and will spend time with brother in the evenings and at weekends.

In both of these examples the solicitor is performing work however her reasons for doing so are very different, and herein lay the issues with trying to write legislation which covers the grey zone where tourism and work overlap. The UK’s visitor rules specifically state that individuals cannot work in the UK if they have sought entry as a visitor, so could the solicitor face being refused entry if she tells the immigration officer she plans on checking her emails in the evening as in scenario 1? Equally, how much clearer are the solicitor’s intentions in scenario 2? Her main reason for visiting the UK is to see her brother, however because she is going to be working whilst she is the UK does this mean she falls foul of the visitor rule?

Are Digital Nomads going to become more common place?

The grey zone is a challenge that most western countries are yet to face as they are not popular destinations for Digital Nomads, however for popular nomad destinations such as Thailand, the UAE and the Caribbean nations this is very much a current challenge. Indeed, it is now common place for immigration officials in many of these countries to examine visitor’s laptops.

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As we have seen with the rise of global tech companies, figuring out where they need to pay tax on their profits is an extremely complicated proposition and it is going to be equally complicated determining what rules need to be imposed on workers who are not bound by geographical borders. There is already a lag time between technological capabilities and legislation, and this is only going to increase as time goes by. The Coronavirus pandemic has created something of a perfect storm when it comes to this lag, whilst governments around the world have been preoccupied with keeping their populations safe, demand for remote working has never been higher and has led to an explosion in the availability and effectiveness of collaboration and productivity tools.

More and more countries will introduce visa programmes focused at Digital Nomads over the coming years, however the promised land of being able to work anywhere on the planet is still some way off.