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Where to set up your taxes as a nomad & remote worker

‘The grey zone’ is a place often referred to when the phenomenon of digital nomadism and working remotely outside of your home country are discussed. This unexplored area is located within the cracks of society and bureaucratic processes. It’s becoming a dimension often traversed by the ever-increasing population of remote independent workers.
Although working full time, many nomads still fall into the bracket of contractors or freelancers, titles often fraught with tax complications. Throw in a nomadic lifestyle and no fixed residency, and you’re looking at an incredibly difficult position to define in terms of taxation.
Legitimizing tax status allows individuals to exist within societies without worry. It lets them get paid and contracted whilst making basic processes like banking more manageable. In this series, we will explore the desire for legitimization within the location-independent community and look at the best options currently available worldwide.

A desire to contribute

Before we delve into the ‘how,’ let's start by asking the most important question: Do nomads and remote workers want to contribute to places they consider a temporary home? We saw evidence that they do during the recent SafetyWing Retreat, where three teams of nomads active in the digital nomad community, alongside some of the members of the SafetyWing team, participated in a hackathon aimed to create “the perfect Nomad visa”.
First, each team looked at the issues surrounding the current options available to nomads. Convoluted processes, piles of paperwork, Digital Nomad visas that were, in fact, not allowing location independence, unrealistic financial thresholds and rigid rules regarding periods of stay were discussed and often met with collective groans by participants who had experienced these issues time and time again.
Secondly, the teams took time to discuss and compile their solutions to these problems in the form of their ideal visas before presenting them to all hackathon participants. Each group came up with a variety of unique visas featuring an array of elements aiming to make general nomadism and the ability to work remotely from other countries a more streamlined process. When the ideas were presented, one thing that became apparent was a united desire between the groups to create something that benefited the local economies, environments, and communities to which their visas gave access. They wanted to contribute to a country in a meaningful way whilst being able to remain location independent, an element that, unfortunately, no existing systems seem to be able to facilitate.
”Instead of trying to create new villages, which reinvent the whole console society, try to iterate on the society you're currently living in” Pieter Levels
But how would they make this happen? Each visa created featured either low tax rates or an initial fee aimed at providing a suitable stream of finance. None of the imagined visas were looking to avoid paying any kind of tax.

Challenges with existing systems in place

More people are heading away from their traditional tax residencies as they traverse the world whilst working remotely. Currently, there is no global solution for this issue. Still, many countries have identified the growing need for a resolution and implemented their own unique, individual plans, helping nomads and remote workers to exist within their borders, either physically or virtually, as tax residents.
To view how much the reality of these schemes meets expectations, we first have to identify where we fit within this puzzle.

What are your obligations relating to tax?

Fully nomadic, slomad, freelancer, location-independent remote worker... there are many different ways to define individual styles of nomadism. Still, when it comes to tax status, it doesn’t matter what label a person gives themselves, the key issue lies within the obligations they have for their home country and, more often than not, what their current country of residence and visa is.

Fully nomadic

An individual who is totally committed to being a Nomad. They have no specific home base, but they could use a ‘legal residency’ to deal with legalities, set up their taxes, and, perhaps, open a bank account.

Location-independent

Nomadic for most of the year whilst having a ‘home base’ where they can spend some time off the road. They can travel whenever they want and stay as long as they wish. Location-independent people may travel to Mexico during cold winter months or head to dryer climates during rainy seasons. This habit of relocation might send them outside of their home base for more than six months at a time, making it possible to pay taxes elsewhere, depending on the country.

Remote worker looking to move

A full-time remote worker, not tied to a specific country for work. These workers may have decided to make the most of their location-independent status, but don’t have the desire to be nomadic. Having a stable home base is still the most favorable lifestyle for them, but they’ve chosen to uproot and head away from their home country to another destination, perhaps one with better weather, a better quality of life or a more favorable tax system. They’re happy to spend a long period of time in one place and would like to exist there as a legitimate, legal entity.
Although there is a considerable rise in Remote Workers who have decided to remain within certain countries and not move, we will not be adding them to this list as their tax situation is simplified. They are obligated to pay taxes to the country in which they reside. The status of remote worker or freelancer does not exempt them from this. Figured out which of these suits you the most? Now it’s time to take a look at the options available for you. Take a look at our guides on how to set up your taxes in: Estonia Portugal Costa Rica United Arab Emirates Georgia Cyprus Antigua & Barbuda
Still looking for more information? Dive into this article where we investigate if Italy is the new remote tax haven or head over to this page where we explore the implications of Estonian E-Residency.

About the author

Luke Poulson

Researcher & Writer
Luke has been traveling around the globe for the last decade and is currently based in Chiang Mai, Thailand. He's been working remotely on everything from directing music festivals, to online ESL coaching, to writing and contributing as a researcher for Borderless. He is a passionate advocate for the modern nomadic way of life and enjoys getting others started on their journey towards remote living.