Published at: 10/12/2020 09:00 am
Barbados, Cape Verde, Croatia, Dubai, Estonia, Georgia, Greece and Spain launched digital nomad temporary residence permit programs during the pandemic. Let's talk about the details, taxation, benefits and dangers.
It allows a remote worker to stay and work from another country other than his homeland or place of residency through a temporary residence process. The resident status may or not may lead to permanent resident status and later citizenship. Depending on the country, some offer tax advantages as well.
What are the tax advantages of the Digital Nomad Visas?
Perhaps the following sentences will be the best advice you find online about choosing your tax structure under a digital nomad visa, please, read with attention. The tax planning of Digital Nomads is more than a complex issue as it always adapts to the objectives of the individuals. Your dream tax paradise can become a tax hell if you don't plan your finances carefully.
Not all countries with Digital Nomad Visas offer tax advantages.
Barbados Digital Nomad Visa: tax-free status for up to one year
Cape Verde Digital Nomad Visa: one-year tax-free residence
Croatia Digital Nomad Visa: will start from 1 January 2021 but needs to amend the Immigration laws.
Dubai Digital Nomad Visa: One-year temporary residence permit, tax-free status, must prove 5,000 USD monthly income
Estonia Digital Nomad Visa: temporary residence permit, full taxation, must prove a monthly income of 3,504 euros. Click here to read more.
Georgia Digital Nomad Visa: tax-free, must prove a monthly income of 2,000 USD.
Greece Digital Nomad Visa: half tax for up to seven years
Spain Digital Nomad Visa: The Canary Islands plans to introduce some visa for digital nomads. Notice, Spain is a tax hell.
Yes, in Dubai. All the other Digital Nomad Visas have clear dangers or at least disadvantages. Because it just does not worth to change your tax status for only a single year. And as the validity of the digital nomad visas is finite, you will have to restart the process in another country or stay there and become a regular taxpayer (if the program for remote workers allows you to continue your status at all) or must leave the jurisdiction.
If you change your tax residence, you must alter the address on all of your bank accounts to comply with the international tax regulations. And when you leave the country, you must change your tax residence again to another jurisdiction. Don't forget if you continue your resident status after the Digital Nomad Visa; then you will become a regular taxpayer. And depending on the country, your income will be fully taxed as all the other residents of the country. Estonia and Spain are tax hells. Of course, Estonia is the pioneer of digital nomad solutions in Europe, and Spain is beautiful, but both EU Member States have high taxes, which you can avoid. However, if you want to get access in the EU, and not wealthy enough to use an EU residency by investment solution, then this is the time to act.
At Discus Holdings Ltd we have been working with our colleagues remotely for decades. This long-term experience allows us to advise you the two best Digital Nomad Visa locations:
If you are interested in financial advantages and a possible long-term solution, then Dubai is the best place for you. Discus Holdings Ltd's local office will help you to plan, please contact us here for a consultation.
If you want to enjoy a holiday at an affordable, secure, clean and beautiful country, then go to Cape Verde. You can get a charming and well-equipped house with three bedrooms and a swimming pool on the shore for 300 euros and can eat well for a month for 200 euros. But most importantly, you can enjoy the kindness and friendliness of the local people, the music, the food and the calm happiness. Cape Verde is unique.