The surge in digital nomad visas has been a godsend for working Brits who crave a new life abroad. They allow you to move to a foreign country and continue working remotely. We take a closer look and offer some financial pointers.
One silver-lining from the Covid pandemic has been the rapid evolution of remote working – from bursting into households during lock-down to being accepted today as a viable option for many people. Zoom, Facetime, Skype – many of us have lockdowns to thank for mastering how to communicate digitally.
Dovetailing off this, there has been a surge in countries around the world using remote working to offer foreign workers the opportunity to relocate and experience life abroad. Cue the digital nomad visa (DNV), also known as the remote worker visa.
Single or young professional couples are the obvious target of DNVs, having the freedom to up sticks and take their job halfway round the world. Existing second homeowners are also ideally placed to take advantage of visa. Likewise, anyone close to being able to retire abroad could use a DNV to make the move early and enjoy their final few years working somewhere sunny!
Typical requirements
Key to obtaining a DNV anywhere is being able to work remotely for a company or clients (as a freelancer) not based in your host country. Most countries – but not all – offer them only to non-EU (third country) nationals, including Brits.
Requirements typically include providing a valid work contract, showing a minimum number of years’ work experience and/or education/ training and proving a minimum level of gross monthly income (usually based on the local minimum wage). Proof of private healthcare is usually needed too.
In exchange, you’ll be offered a visa to reside and come.
Partners and children can usually be included (requiring extra monthly income). While DNVs are designed as short-stay visas and often suit more transient relocators, they can be a springboard to more permanent residency. Timescales vary, but while some indicate they will only last for a year, most are renewable several times – by which time you may be able to switch to a long-term residence visa and stay for good.
DNVs in European countries are especially appealing to Britons who lost automatic EU residency rights through Brexit. Recent research by a Dubai-based citizenship consultancy estimated that in December 2023 there were 16.9 million digital nomads roaming the globe – a whopping 162% increase from 2019.
Where are DNVs available?
In the past few years, most popular expat destinations in Europe have launched a DNV. Spain requires applicants to earn a multiple of its national minimum wage, which in 2024 equates to €2,646 per month or €31,752 annually. Freelancers can earn up to 20% of their income from Spanish clients.
Portugal’s monthly DNV income requirement is €3,280 (four times its 2024 minimum wage) and applicants can choose between a one or more permanent two-year visa. Italy introduced its DNV only this year, requiring a €2,333 monthly income (three times its minimum wage excluding healthcare contributions). Other examples include Greece (monthly income requirement €3,500), Turkey – launched in April this year ($3,000) – Malta (€3,500) and Cyprus €3,500. Amongst long-haul destinations offering DNVs, Caribbean nations have a typical annual salary requirement of $50,000.
Currency considerations
As a digital nomad you’ll have a new local currency, which more than likely will be different to your source of income. Typically, your wages will continue to be paid in pounds by your UK employer or UK-based clients. Which means you need to think about the best way to exchange and transfer funds. Start by chatting to Smart Currency Exchange, who have a range of solutions for optimising value in cross-border payments.
Their regular payment plan (RPP) is ideal in this scenario, ensuring your wage is transferred automatically to your local foreign account each month. You could also combine this with a forward contract, allowing you to fix an exchange rate for a set number of months. Popular with retirees transferring pension payments, this can help you budget for day-to-day living.
Besides highly competitive exchange rates and one-to-one customer service, an important benefit of using specialists like Smart is that they charge zero or negligible fees, unlike banks.
You should take care planning annual overheads, including tax payments. Likely to be payable in your host country, think about where you will put money aside for these, in what currency and when Smart can assist in making any required transfers.
Don’t relax before considering tax
Research and plan your tax status as a digital nomad. Much will depend on the rules of your host country, as there is no one size fits all solution. Some visas exempt digital nomads completely from local taxes, some just partially. For example, in Spain the so-called Beckham’s Law means certain DNV applicants, depending on circumstances and line of work, can benefit from a special non-tax resident rate of 24 per cent on all annual income (up to €600,000).
In Europe, the tax year runs typically from 1st January to 31st December and countries predominantly use a territorial tax system. This means if you spend 183 days or more in any given calendar year in a country you are deemed tax resident there and pay tax on all your income. Just ne aware that other factors can make you eligible for tax residency.
Because the dates of the UK’s tax year are different, a tax specialist could advise on how to time your arrival in a new country and benefit from a more favourable tax bill. Conversely, at a certain point in the year there is a risk of being deemed tax resident in more than one country. The UK has double taxation agreements with many countries, which should protect you from this.
