Digital nomads are remote workers who travel to different locations while working with digital technologies. They often work in coffee shops, co-working spaces, or anywhere they can find a hotspot. The biggest appeal for most digital nomads is the ability to travel and see the world while earning a living.
The History of Digital Nomads
Digital nomads are a fairly recent phenomenon since the ability to work remotely has increased tremendously with new technology. The evolution of technology has taken the movement from a few dedicated outliers to a mainstream option even for large corporations. The rise of digital nomads has also been fueled by economic considerations such as the rising cost of housing and the expenses associated with high cost-of-living areas. The term digital nomad was first used in the 1990s to describe a high-tech traveling lifestyle fueled by mobile devices and computer networks.
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Countries That Allow Digital Nomad Visas
Many digital nomads are from developed countries with widely-accepted passports. While many use a travel visa to travel the world and work, it's not always legal to work on a travel visa. There are many countries that have visas targeted specifically toward digital nomads, including:
- Antigua and Barbuda
- Cayman Islands
- Costa Rica
- South Africa
- United Arab Emirates
The conditions for each country's digital nomad visa vary, but most allow people to work and live in the country for anywhere between 90 days and five years, under special tax rates or exemptions. While your in-house HR team may find it impossible to manage the shifting regulations involved when digital nomads change countries, Skuad can help you stay on top of payroll, benefits, and compliance for digital nomads no matter how frequently they change locations.
Benefits of Being a Digital Nomad
There are many benefits to being a digital nomad that makes the lifestyle attractive to its adherents, such as:
The ability to travel and see the world
For many digital nomads, being able to travel when and where they want is the main draw to the digital nomadic life. They can choose where they stay and for how long, and they aren't limited to traveling only during vacations.
Exposure to different cultures
Standing in line at a crowded tourist attraction doesn't give you the same cultural experience that you'll get from living in a country, even on a short-term basis. Digital nomads live and work in a country, so they get to experience life as a local.
Most digital nomads live out of their backpacks or suitcases. Paring down your possessions is a necessary part of traveling light. In a time when many people are trying to declutter and live simply, digital nomads do so out of necessity.
Lower cost of living
While you can be a digital nomad in almost any country, many people choose to work and live in countries with much lower costs of living. Some digital nomads choose to maintain their same salaries and save the difference, while others take advantage of not having to earn as much and work less.
Remote working allows most digital nomads to set their own schedules. They can choose to work as much or as little as they need to cover their expenses. They can often take off time to explore their environment.
Meeting new people
Living in different locations gives digital nomads the opportunity to expand their circle of friends and meet people they never would have otherwise. Countries with a large population of digital nomads often serve as gathering places where they can get to know each other and go on joint adventures.
Regularly traveling to new places forces you to leave your comfort zone and interact with all types of people. Travel increases your ability to learn new skills and adapt to new situations.
Digital nomads tend to be more productive because they're motivated to finish their work so they can go explore. When you're stuck in an office for eight hours a day, the temptation to waste time can be difficult to overcome. When you know the world is waiting for you when you finish working, wasting time on social media loses its appeal.
When you're constantly having diverse experiences, your brain will have more new inputs to crunch together. This synaptic play will unleash more innovative connections and creative ideas.
Challenges of Being a Digital Nomad
Although most digital nomads enjoy the benefits of their lifestyle, they freely admit there are many challenges as well.
Despite their love of new places and travel, loneliness is one of the biggest struggles for many digital nomads, especially those who are traveling alone. Traveling and living in places where they don't know anyone can leave digital nomads feeling isolated and alone. They may find themselves surrounded by amazing sights but with no one to share the experience. In some areas, digital nomadic communities have sprung up to help overcome this loneliness and foster a sense of socialization.
Managing taxes and paperwork
Digital nomads may have tax and reporting obligations in several different countries. Some digital nomad visas require workers to pay taxes. The U.S. requires citizens to pay U.S. taxes regardless of where they live when they earn money. Additionally, digital nomads have to make sure they don't violate the terms of their visas. If you're employing digital nomads, being able to address their tax requirements with a payroll management partner like Skuad can give you a competitive advantage.
Budgeting and finances
When you're traveling, unexpected expenses are part of the experience, and this is even more true when traveling full-time. It can be difficult to budget for expenses in a new city. Digital nomads may find also it hard to stay on a budget when they have the chance to participate in unique experiences.
Working in an unfamiliar environment
Digital nomads who are working in an unfamiliar environment may have trouble meeting deadlines. They may find themselves in areas with spotty internet service or unreliable electricity. Regardless of where they're working, digital nomads have to deliver results, so they may be stressed out trying to find a suitable working environment. They can also have a hard time replacing electronic equipment if it gets stolen or broken.
Traveling is tiring, and digital nomads may find themselves exhausted after a long period of constant travel. It can be hard to relax and feel at home in a strange place. All of the adaptability and new experiences can leave you physically and mentally worn out.
Lack of work/life balance
Due to the pressure to deliver regardless of the circumstances, digital nomads can end up working at all hours of the day or night. Additionally, digital nomads who are freelancers can go through feast or famine periods where they alternate between too much or not enough work to sustain their lifestyle.
Finding adequate health insurance and healthcare providers on the road is a significant obstacle to many digital nomads. In particular, people with chronic illnesses may have a hard time getting adequate healthcare for their conditions since they'll likely be changing primary care providers frequently.
Growing apart from friends
Although there are more ways than ever to keep in touch with friends, not being around to go out for dinner or celebrate birthdays can leave digital nomads feeling like they're growing apart from their significant relationships. Since social relationships are an important part of mental health, this can have a negative effect on mental wellbeing.
From its radical and experimental roots to its acceptance into mainstream culture, the digital nomad lifestyle has grown with the evaluation of technology. Digital nomads can be valuable and creative members of your organization. If you're interested in attracting, hiring, and retaining digital nomads, understanding the benefits and challenges of their lifestyle can help you meet their needs.
Skuad's comprehensive platform gives you a complete resource for hiring and managing digital nomads. Our global payment processing solution lets you pay digital nomads and all other members of your dispersed team with one click. Regardless of whether you're hiring employees or independent contractors, you can manage cross-border payments from a unified platform.
Compliance issues for digital nomads can be even more complex than compliance issues related to other types of remote international workers. Our team of legal and financial experts ensures you're in compliance regardless of where your digital nomads are working from, even if they have to pay taxes in their home country.
With Skuad as your global HR provider, you can offer digital nomads benefits that are custom-designed to appeal to them no matter where they're currently residing. You can offer benefits such as healthcare, retirement planning, and paid time off. You'll be able to seamlessly provide these benefits even when laws change or your team members relocate to another country. Skuad offers compliance coverage in over 160 countries. Reach out today to schedule a demo and find out how our platform can help you manage top talent across the globe.