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By Sue Guillory
Thanks to an unnamed pandemic, the idea of going to the office every day is moving as fast as the dodo.
profit? Free-spirited people now have more opportunities to work and live abroad.
If you’ve been fantasizing about fiddling with your laptop on a tropical beach somewhere in the world, it might not be such an unattainable dream these days.
The rise of the digital nomad visa
Countries around the world, especially those that can benefit from a little extra income, have so-called digital nomad visa. This visa allows individuals working remotely to stay in the country temporarily. Generally, a digital nomad visa does not allow you to engage in business activities in your country of residence. You may be able to renew your visa if you meet certain eligibility requirements.
Portugal is one of the most well-known countries offering digital nomad visas, but it is not the only one. Other European countries also offer Georgia, Croatia, Iceland, etc. Elsewhere in the world, you can find digital nomad visas in Grenada, Panama, Dubai, Sri Lanka, etc.
This visa is actually sometimes called a “digital nomad visa”. Sometimes called by different names, but the meaning is the same.
This is the category I fit into. I have a remote content writing and expatriate coaching business and I live in Italy. I am here on a self-employed visa.
The main difference between the digital nomad visa (currently not available in Italy, but a law has been passed to approve it) and the self-employed visa is that the latter allows expatriates to participate in business activities in a new country…and they must pay taxes there.
The self-employed expatriate likely intends to stay in his new home instead of flying from one digital nomad-friendly country to another every few months. Also, with a self-employed visa, you don’t have to work online. However, in many countries, if you can make money in your home country, it can be difficult to find a job in another country, so it is an advantage. It is not possible to live in that country due to the lack of work, qualifications, and language barriers.
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Further differences between the two
Another difference between a digital nomad and a self-employed expat is that a digital nomad is not necessarily self-employed. If your employer is open to you working in another country, you can become a digital nomad as an employee.
Self-employed expats must register their business in the new country. This may involve obtaining some kind of business identification number (called Partita IVA in Italy) to allow you to report earnings and file taxes in your home country as well as your home country . (My advice is to find an accountant as soon as you settle in so you can understand what reporting and billing you need to do to comply with tax timing.)
Digital nomads typically pay income tax only in their country of origin. However, self-employed expatriates may be required to pay in both countries. Tax laws are ambiguous between borders, so I won’t go too deep here. But as an example, there is an agreement between Italy and the US that you pay US self-employment tax as well as Italian taxes, but your US taxes are reduced by the amount you paid in Italy (I’m right I think you haven’t filed your taxes yet!). I will continue to pay Social Security in the US, but I had the option of paying a comparable amount here in Italy.
The ease of obtaining either type of visa depends on the country, number of applicants, availability of seats, etc. In Italy, it was said that it would be very difficult to obtain a self-employed visa because there are restrictions on how many people need permission per year, but I was able to obtain it without any problems. In some countries flooded with digital nomad visas, the number of approval applications may start to decline.
Are self-employed expatriates digital nomads?
The term digital nomad is hyped. Sexy and Instagrammable. Digging into the spirit of the term I think, a digital nomad is someone in his 20s who can work anywhere and chooses to live in Bali for 3 months where he will then go to India, Panama etc. You can Obviously, this is a stereotype. Because digital nomads don’t necessarily have to fly around the countryside, regardless of age.
In my case, I identify as a self-employed expatriate. I have lived in Italy for a long time and have my roots in Italy, both professionally and personally. I tackle the complexities of accounting and tax reporting because I want to make a meaningful contribution to the country I have chosen as my immediate home.
About the author
Sue Guillory Overseas coach and business content creator. She supports women through the transformational process of emigration so that they can live happy and more authentic lives. Su her has been featured in AllBusiness, Forbes, SoFi, Lantern, Nav and more.
Related: A digital nomad might be right for your company — here’s what to consider