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13th Apr 2024

Feature

The visa downside of digital nomads’ Instagram lifestyle

  • 'Digital nomads' as a category do not technically exist in EU law (Photo: Unsplash)
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"I worked in my spare time, whenever my English classes allowed," says Nuria, a 24-year-old Spaniard who has been living in a small town in northern Malta for the past three months. The young woman is one of today's so-called 'digital nomads' — those who work online without a fixed workplace.

The term is more common now than before the pandemic, but it continues to cause confusion as to its meaning and scope, especially in terms of labour law.

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Nuria, for example, is a self-employed marketing professional who in recent months decided to swap her desk in central Madrid for the sea and English lessons in Malta. Her Spanish employer didn't mind, and all she had to take with her was her computer and cell phone.

But not everyone's situation is always so idyllic, and although the EU's freedom of movement makes it easier to move and work from one member state to another, citizens can still suffer from certain gaps in coverage.

In the case of Nuria's colleagues from Chile and Brazil, the way to live and work in Malta was through a digital nomad visa, a temporary residence permit offered by some European countries for limited periods, usually between six months and two years.

The goal is to attract high-skilled, high-income earners to boost local economies without competing with local workers. It is also a way for Europe's most tourism-dependent economies to generate wealth outside their peak seasons.

One of the latest European countries to introduce such a permit is Spain, which joins others such as Croatia, Estonia, Portugal and Greece in competing to attract these new 21st century workers.

They offer good weather, a lower cost of living, attractive landscapes, and even tax breaks and exemptions. In return, they demand a certain minimum monthly income.

In countries like Portugal, the level is four times the national minimum wage. In Malta, where the minimum wage is around €835 per month, they demand around €2,700.

They may also require a minimum length of stay, as in Portugal, which sets it at 16 months.

So far, these visas have only been introduced at country level, which poses a problem for a cross-border remote working reality.

Where are taxes paid? What tax deductions are available? What health care is available? Who do you go to if you have a problem with your employer or an accident at work? How and by whom are labour inspections carried out? So far, there is no common framework for all these questions.

Firstly, because "digital nomads as a category do not technically exist in EU law," according to a new analysis by the European Trade Union Institute (ETUI).

The legal uncertainty of their status puts them in a vulnerable position. "The law is still catching up with a reality where people are already using telework and digital nomadism," ETUI researcher Zane Rasnaca told EUobserver.

As each country has a different legal framework, the concept is unclear.

Secondly, there is no data on how many of these European and non-European digital nomads there are in the EU.

"If we don't have the data, we don't really know how widespread the phenomenon is," Rasnaca said.

In addition to legal status, there are several aspects that make it difficult to effectively enforce digital nomads' rights as workers, including multiple employers, the cross-border element, or working from an atypical location.

"Currently, cross-border teleworking significantly challenges existing tax systems. Both company profits and workers' wages might be subject to the threat of double taxation," the ETUI analysis notes.

Living and working for a limited period in a country with which they generally have little connection complicates the enforcement of employment law and the possible shifting of tax or social security liabilities, which can lead to gaps in coverage.

But despite the lack of concrete data in Europe, digital nomadism is clearly a booming global phenomenon, as evidenced by portals such as Nomad List, which was used by more than five million people last year.

"We need to recognise this [trend] rather than outlaw it, because it can push them into an irregular migration situation that could create more problems," the ETUI researcher said.

Meaning, using a tourist visa to enter a country to work without any kind of coverage or protection and without legal permission to do so.

The impact of these nomads on destination communities must also be analysed, says Rasnaca, to avoid possible inequalities between those who work locally and those who work remotely for foreign employers.

Lisbon has already seen some hostility towards this group, which locals blame for exacerbating the city's housing crisis in recent years, forcing many Portuguese to move from the centre to the outskirts.

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