The phenomenon of work-from-anywhere has firmly entrenched itself in the modern landscape, ensuring its lasting presence. Around the world, countries are actively competing to attract the growing population of international remote workers known as digital nomads.
A digital nomad is an individual who embraces a nomadic way of life, leveraging technology to engage in remote work beyond the confines of their home country. The digital nomad visa grants its holder legal permission to work remotely while temporarily residing outside their home country.
Governments that provide digital nomad visas often eschew the actual term, opting instead for distinctive nomenclature specific to their respective regions. For instance, the Cayman Islands offers the Global Citizen Concierge Program, while others adopt broader designations like residence permit.
At present, 44 countries extend the privilege of a digital nomad visa to interested individuals.
It is important to note that most of these visa programs impose restrictions on working for local companies or establishing local businesses. However, Estonia stands as an exception, permitting visa holders to engage in limited local employment, on the condition that their primary purpose of stay remains remote work. Conversely, while Bermuda prohibits remote workers from pursuing local employment, it does afford them the opportunity to conduct local meetings.
Digital nomad visas are available around the world, but the visa type is booming in Latin America.
"Digital nomad workers in Latin American countries have increased due to the new realities of remote work, the low cost of living in these (Latin America) countries, and the inflation and increase of the dollar," says Daniela Lima, the managing director for Latin America at Newland Chase.
Presently, Latin America boasts an assortment of approximately six digital nomad visas, with this number continually on the rise.
Exploring South America’s Digital Nomad Visa Landscape: Spotlight on Brazil, Costa Rica, Mexico, Colombia, and Argentina
The surge of digital nomad workers in Latin American countries finds its roots in a confluence of factors: the transformative impact of remote work in the wake of the pandemic, the favorable cost of living in these nations, and the fluctuating currency dynamics.
"We have seen that the favorite destinations for remote workers earning salaries in USD or EUR are Buenos Aires, Mexico City, Medellin, Lima, and Guadalajara," Lima says.
In response to this trend, Argentina introduced the digital nomad visa in May 2022, offering temporary residence for up to 180 days to individuals who do not require a tourist visa. The purpose of this visa is to provide remote services through technology and telecommunications.
Brazil’s digital nomad visa, launched in January 2022, has attracted travelers, particularly to Rio de Janeiro. Residency procedures have been streamlined, enabling visa holders to work remotely while staying in Brazil for one year, renewable for another 12 months. Rio de Janeiro has invested in enhancing connectivity with citywide 5G coverage and cultivating a digital nomad-friendly environment, featuring modern cafes with fast internet and trendy brunch offerings.
Mexico implemented the temporary residence visa in 2018, enabling remote workers to stay as tourists for more than 180 days. The visa can be extended for up to four years and allows for remote work and freelance activities, provided they do not conflict with local employment.
Colombia launched the digital nomad visa in 2022, allowing visa-free entry for foreigners. It grants stays of up to two years for remote work, telecommuting services, or digital entrepreneurship aligned with Colombia’s interests, with the possibility of extension.
In 2021, Costa Rica introduced the digital nomad visa to revive its post-pandemic economy. This visa enables visitors to work remotely for foreign companies or engage in freelancing. It is issued for one year, renewable for an additional year, and offers benefits like driving with a foreign license and tax exemptions.
"In general terms, Latin American countries that introduced the digital nomad visas for remote workers intend to grant a temporary status, require proof of economic solvency, and health coverage during their stay in the country," Lima says
These digital nomad visa programs showcase the growing trend of countries adapting their immigration policies to attract remote workers and tap into the benefits they bring to local economies.
How Workers Use Digital Nomad Visas
Although the digital nomad lifestyle is often associated with flexibility, it is important to note that many digital nomad visas have limitations on the type of work that can be conducted in the designated location, which may not align with popular assumptions of complete flexibility.
"We can see that the trend is to keep the eligibility criteria for remote workers or employees who render their services in the local territory but do not provide services for the local market and do not receive local income or remuneration," Lima says.
It is crucial to recognize that numerous digital nomad visas impose limitations on the type of work permitted. For instance, these visas may not be a feasible option for companies seeking to hire foreign workers.
Interestingly, a digital nomad visa could present an intriguing alternative for companies facing challenges in securing a work visa for a foreign worker. It can serve to temporarily station the worker in a neighboring country that allows for convenient commuting to the company’s office. However, it is essential to note that this approach is not a long-term solution, and consulting an immigration lawyer is advised before utilizing a digital nomad visa in such a manner.
How Do Digital Nomad Visas Benefit Latin America’s Economy?
Supporters of digital nomad visas argue that they offer a means to optimize the economic advantages associated with attracting remote workers. Particularly for countries heavily reliant on tourism, these visas have emerged as a potential alternative to short-term tourist travel, serving to recover a portion of the revenue lost during the pandemic. Destinations now perceive digital nomads as travelers who not only contribute to local communities but also possess significant purchasing power, making them a desirable group of visitors.
Digital nomad visas address challenges in global immigration policies and visa delays, benefiting both countries and local communities. These visas offer a temporary solution to issues faced by knowledge workers, such as immigration bottlenecks and lengthy visa processing. The pandemic has worsened these problems, but digital nomad visas provide a way for remote workers to access countries for a period of six to 12 months. Moreover, the flexibility of digital nomads has the potential to boost business travel and generate increased demand for the airline industry.
“The rise of digital nomads along with changes in the political climate and economic impact has brought about immigration trends that have increased compliance, protect local labor markets, and increased the level of scrutiny during the visa application process in certain countries," says Lima when asked about how digital nomad visas impact local Latin American economies.
With the introduction of new digital nomad visa programs and ongoing implementation efforts, it is premature to ascertain whether these visas will deliver the promised economic advantages they are touted for.
The Potential Risks of Digital Nomad Visas
In response to the pandemic, governments and employers have implemented various measures to accommodate remote workers. Digital nomad visas have emerged as a means for governments to promote their countries as welcoming to remote workers and align with broader economic goals. However, it’s important to recognize that these visas may not be suitable for everyone.
While digital nomad visas offer opportunities, they can also introduce complexities for both workers and employers. The Migration Policy Institute’s report cautioned that many countries’ immigration systems are ill-prepared to handle remote work arrangements, necessitating future adaptations.
For employers, ensuring compliance for remote employees can pose challenges. Digital nomads need to be mindful of potential issues such as the risk of double taxation, variations in worker protections across different countries, and the portability of Social Security benefits across jurisdictions, as highlighted in the report. Overall, the evolving landscape of digital nomad visas requires careful consideration by both workers and employers.
Learn more about intersection of remote work and global mobility in Worldwide ERC’s Evolution of Remote Work Report.