How “Digital Nomad” Visas Can Boost Local Economies
More and more companies are offering their employees the option to “work from anywhere,” whether in their home office, in another state, or even halfway around the globe. A growing group of remote professionals are taking the “anywhere” in work-from-anywhere to new lengths. These “digital nomads” leverage their remote jobs to allow them to live in tourist hotspots or tropical destinations for months at a time. Others engage in months-long “work-cations,” combining periods of working and tourism. During the Covid-19 pandemic, many countries — especially those with significant tourism sectors suffering from reductions in global travel — began offering specific visas to these digital nomads. It’s abundantly clear that digital nomads, and remote workers in general, can be a boon to any economy— spending money, facilitating collaboration and spurring innovation — a win-win for both the digital nomads and the economies where they choose to live and work.
Work-from-anywhere, where workers enjoy the flexibility to live in a geography of their choice, is here to stay, and countries around the world are in a race to attract the growing class of international remote workers known as “digital nomads.” Portugal, for example, now offers a two-year renewable residence visa for workers who can prove that they have a remote job for the length of their stay. Other countries that offer a form of digital nomad visas include Australia, Czech Republic, UAE, Estonia, Germany, Thailand, Indonesia, Italy, Spain and Brazil, among many others. (See the below chart for details). These visas typically require proof of income and remote employment, travel insurance, and intent to depart. In summary, digital nomads invest their time and money in the local economy, without taking local jobs, and build bridges with local knowledge workers — a win-win for both remote workers and local communities.
More and more companies are offering their employees the option to “work from anywhere,” whether in their home office, in another state, or even halfway around the globe. Some companies, like Zapier, GitLab, and Doist, have embraced an all-remote model, doing away with offices entirely. Others, like Twitter and Shopify, are keeping their physical offices but using a “remote-first” mindset. Still others are exploring hybrid-remote models, whether that means allowing certain roles to work remotely, or (as Google announced in 2021) allowing annual periods of work-from-anywhere.
A growing group of remote professionals are taking the “anywhere” in work-from-anywhere to new lengths. These “digital nomads” leverage their remote jobs to allow them to live in tourist hotspots or tropical destinations for months at a time. Others engage in months-long “work-cations,” combining periods of working and tourism.
During the Covid-19 pandemic, many countries — especially those with significant tourism sectors suffering from reductions in global travel — began offering specific visas to these digital nomads. Digital nomads can now choose from a range of tropical destinations (Costa Rica, Mexico, Ecuador), island getaways (St. Lucia, Barbados, the Seychelles), and winter escapes (Estonia, Iceland, Norway). Other countries expanded their existing short-term work visas to account for those working remotely, including several European Union members and many Southeast Asian countries. The visa programs generally cost around $1,000 and exempt visa holders from local income tax for their six-month to two-year stay. They also have income and employment requirements, ensuring that these visa holders can support themselves without taking local jobs.
Digital nomad visas accrue many benefits to countries and local communities. Firstly, these visas act as a temporary fix for immigration policy woes and visa delays around the world. Many knowledge workers are currently unable to work around the world, especially in countries such as the United States, due to immigration policy logjam or extended visa processing backlogs. Even before the Covid-19 pandemic, knowledge workers faced long wait times for visas, rising rejection rates, and great uncertainty. The pandemic compounded these issues, adding travel restrictions from Covid-19 hotspots, embassy closures overseas, and even longer processing times for all visa types to the list of challenges. A digital nomad visa provides short-term access to countries around the world, and typically last six to 12 months for remote workers. The geographic mobility of digital nomads could spur business travel in the short to medium term, giving the airline industry a much-needed demand boost.
Secondly and importantly, digital nomads could act as catalysts for knowledge and resource flows between regions, benefitting themselves, their organizations, and their host countries. My longstanding research on geographic mobility and innovation has shown that short-term travel and even short periods of co-location with geographically distant colleagues can help workers access information and resources that can help grow new ideas and projects, which benefits both the mobile worker and their organizations. My research with former doctoral student Do Yoon Kim also showed that skilled migrants bring to their host communities unique knowledge from the cultural context of their home country. Also, local inventors engage in “knowledge recombination” by combining their existing knowledge to knowledge transferred by migrants. In subsequent research with Dany Bahar and Hillel Rapoport, we showed that migrant inventors not only “import” knowledge from home countries, which translates into more patenting; the migrant inventors actually boost patenting in the same technologies their home countries specialize in. As a result, a country is likely to have migrants as inventors of the first-ever bulk of patents in any new technology.
Finally, digital nomads might play a key role in fostering entrepreneurship and the creation of technology clusters around the world. Foreign entrepreneurs congregating in a shared space for even a few months can spur new connections and new enterprises, as I saw in my work with Start-Up Chile, a government-sponsored incubator program that has invited more than 280 start-ups to spend time in Chile since its founding in 2012.
In summary, it is clear that digital nomads, and remote workers in general, can be a boon to any economy — spending money, facilitating collaboration and spurring innovation. However, the United States has not announced a digital nomad program. Countries around the world are competing for remote talent. It is time, for the U.S. to get on board — or risk being left behind.
