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What is a Digital Nomad Visa (Benefits and Disadvantages)
The Digital Nomad Visa Explained
Individuals who want to travel the globe in order to try working in different countries — without becoming a citizen or permanent resident of that country — may qualify for a digital nomad visa in order to streamline their ability to temporarily reside abroad. Similar to the visa waiver program in the United States and other countries, a digital nomad visa allows a person a more direct or streamlined route to becoming a resident of a foreign country, for a temporary time. Especially with Taxpayers across the globe being cooped up as a result of Covid, the digital nomad visa has become much more popular in the past years. While not every country offers a digital nomad visa, let’s explore the basics.
Which Countries Offer the Digital Nomad Visa?
While there are many different countries across the globe that offer the digital nomad visa, the more popular digital nomad busiest time to be in countries with high-demand coastal cities and/or metropolitans. Some of the more popular digital nomad visa countries include:
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Portugal
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Spain
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Greece
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Barbados
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Bermuda
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Cayman Islands
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Brazil
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Taiwan
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Panama
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Is it Hard To Get a Digital Nomad Visa?
In general, it is not very difficult to obtain this type of visa – noting, that is different than citizenship-by-investment or residency-by-investment in that the digital nomad visas are just temporary visas Most of the time, the application fee is a few thousand dollars (vs. hundreds or thousands, if not millions of dollars for a CBI or RBI). Applicants are required to prove that they have a certain amount of income — and the amount of income varies depending on which country the taxpayer seeks to obtain a digital nomad visa.
Is a Digital Nomad Visa Expensive?
The cost to obtain one of these types of visas is generally not very expensive. For usually a few thousand dollars or even less, Taxpayers can apply for a digital nomad visa – and the length of the process for acceptance is generally relatively short — as taxpayers are only granted a year or less of residence in that country.
US Persons and Worldwide Income
One important fact for US Taxpayers is that since they are US persons, they are still required to pay tax on their worldwide income and report their global assets in investments on various international information reporting forms such as the FBAR and FATCA Form 8938. Even if the taxpayer is in a tax-free country, that does not mean they escape US tax on their worldwide income, although they may want to consider making a treaty election to be treated as a foreign person—although this also has some pitfalls to be aware of, especially for those who are already considered long-term lawful permanent residents.
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