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Ever dreamed of writing emails from the beach in Bali, working from a cosy cafe in Paris or taking calls from a mountain lodge in Switzerland? Thanks to technological advancements, increased flexibility on the part of employers and the growing prevalence of digital nomad visas, this lifestyle is now more accessible than ever.
But, while this way of life can offer serious benefits in terms of freedom and flexibility, there are also legal and compliance factors to consider. In this article, we’ll cover everything you need to know to explore the world without taking a sabbatical or saving up your PTO.
What is a digital nomad?
A digital nomad is a person who works remotely while travelling the world, blending work, life and travel into one seamless experience. They usually fall into one of three categories:
- Remote employees with flexible employers
- Freelancers offering services to clients
- Entrepreneurs and business owners
Some digital nomads settle in one country for months or even years at a time, while others hop between destinations and work from anywhere with a WiFi connection. Many digital nomads choose destinations with a lower cost of living, allowing them to stretch their income further and build a better work-life balance.
The role of the digital nomad visa in 2025
To cater for the rise in digital nomads, many countries have introduced special visas designed for remote workers. These typically let digital nomads stay for a limited period without being subject to the usual immigration or tax requirements.
As of 2025, countries offering digital nomad visas include Spain, Italy, Croatia, Estonia, Thailand, Japan, Panama and Turkey — and the list keeps growing. Each visa has its own requirements, from minimum income thresholds to health insurance and employment status — we’ll cover this in more detail below.
How to become a digital nomad: 6 key considerations
Ready to embrace the digital nomad lifestyle? Not so fast: before you pack your bags, there are some key legal, financial, and practical factors to consider. Read on for everything you need to know.
1. Choosing the right visa for your situation
Digital nomad visas vary significantly from country to country, and the specific requirements for each one may play a role in determining where you begin your remote working adventure. Here are some of the different factors to consider when comparing digital nomad visas:
- Minimum income requirements: For example, Portugal requires individuals ot earn €3,480 per month, while Croatia asks for €2,870 plus €287 for each dependent. On the other hand, some visas have no income requirements at all.
- Minimum savings requirements: Some countries also require you to have a certain amount saved up before they’ll grant you a digital nomad visa. In Italy, you’ll need to show you have a total balance of €30,000 or more, whereas Georgia requires €22,000.
- Visa fees: Some visas are free or have a nominal fee of between €10–20, while others cost several hundred euros. There may also be other costs, such as application fees, to bear in mind.
- Employment status requirements: Certain visas are only open to remote employees, while others are also available to freelancers and entrepreneurs. Digital nomad visas typically don’t allow you to work for clients or employers headquartered in the country you’re staying in.
- Length of stay: Most visas are valid for between six months and one year, though some are granted for longer. For example, the recently introduced digital nomad visa in Thailand is valid for up to five years. Many visas can be renewed as long as certain conditions are met.
- Tax benefits: Many countries offer low tax rates or special schemes for individuals working through digital nomad visas. We’ll dive into this in more detail below.
- Family members: Some visas allow you to bring direct family members like spouses and children. You’ll usually need to provide documentation to prove your relationship, and there may be additional income or savings requirements for each dependent.
Failing to meet the requirements of a specific visa will result in your application being denied. To avoid disappointment, it’s important to do your research before you apply.
2. Applying for a digital nomad visa: a step-by-step guide
The steps to apply for a digital nomad visa are different in each country. However, here’s a basic step-by-step guide to give you an idea of the process:
- Step #1: Fill out an application form: This can usually be done online, though some countries require a printed and signed version. To avoid delays, make sure the details you provide are accurate and up to date.
- Step #2: Schedule an appointment with the embassy or consulate: This is when you’ll officially submit your application. Depending where you’re based, you may need to travel to a neighbouring country. Appointments can take time to secure, so be sure to plan ahead.
- Step #3: Prepare your documents: You’ll need documents to prove your employment status, income, and more. Some countries require translations or certified copies.
- Step #4: Submit your application: Once everything’s ready, submit your application and documents at the embassy or consulate. You may also need to attend a visa interview and pay a fee.
The process of applying for a digital nomad visa could take as little as one week or as long as six months. It’s totally dependent on the visa you apply for and the particularities of your situation.
3. Understanding tax residency and obligations
Understanding your tax responsibilities is key to a smooth and simple digital nomad experience — but these differ from one country to another. To start with, many countries only consider you a tax resident if you spend more than 183 days per year there. So, if you’re only there for a short stay, you may not have to worry. But things can get a bit more complicated than this…
Take Spain, for example. To keep your digital nomad visa valid, you’ll need to spend at least half the year in the country, which means paying local taxes is unavoidable. However, the country also has a special scheme for digital nomads, which allows them to pay at a flat rate of 24% on income under €600,000 per year.
Additionally, you may also need to file a tax return (and potentially pay taxes) in your home country, even while you’re working abroad. US citizens, for example, must file a US tax return no matter where they live. However, digital nomads can usually avoid double taxation through foreign tax credits.
In short, it’s complicated — and it’s important to read up on your specific situation before getting started as a digital nomad. Above all, don’t neglect your tax obligations, or you could risk fines, penalties and other legal consequences.
4. Managing health insurance and social security and benefits
Many digital nomad visas require proof of a health insurance policy covering the length of your stay, ensuring you won’t burden local healthcare systems if you need treatment. These days, there are many insurance companies catering specifically for digital nomads with options that provide coverage in multiple countries at various price points.
Digital nomads may also be required to pay social security contributions, either at home or in the country where they are living. For example, US citizens have to pay Social Security and Medicare taxes based on their income, even if they are working from abroad. If you pay social security contributions in your country of residence, you may be able to access benefits like public healthcare.
5. Handling multi-currency banking and payments
Managing finances in different currencies is another key challenge for digital nomads. For example, let’s imagine you work in Colombia as a freelancer for European clients. You probably receive payments in Euros but need to pay for accommodation and other expenses in the local currency, the Colombian Peso.
Traditional banks can hit you with hefty fees for currency conversions and international payments. Thankfully, there are now digital banking solutions like Monzo, Starling, Revolut and Wise, which are specifically designed to handle multiple currencies with greater flexibility.
In some cases, digital nomads may be required to open a local bank account. For example, this is required in certain European countries in order to pay rent, make tax payments and set up contracts for things like mobile phones and utilities.
6. Overcoming cybersecurity and data privacy concerns
Working across multiple jurisdictions also raises data security and cybersecurity risks. Digital nomads must stay on top of local data privacy laws, such as the General Data Protection Regulation (GDPR) which applies across the EU and in some other countries.
They should also be careful when using public internet networks — especially when accessing sensitive data belonging to clients or employers — since this can open the door to cybersecurity threats. A common solution is investing in a VPN, which ensures private, secure, internet access.
Digital nomads also need to be mindful of the tools they use for work and communication. While it’s true that a laptop is all you technically need to be a digital nomad, you’ll also require key programs and platforms to effectively collaborate with clients, employers, and colleagues from a distance.
Hiring digital nomads: what employers should know
Many employers are hesitant to let their remote employees work from abroad, often citing tax and legal concerns. And it’s true that employers of digital nomads have certain obligations.
First, employers must ensure that their workers are working legally and that their taxes are paid properly. This might involve deducting the correct amounts from wages and remitting them to the tax authorities in the country the employee is working from.
Employers are also required to comply with local labour laws, which can vary significantly between countries. In some countries, it might mean providing extra vacation time, termination protections or benefits like the 13th salary.
Another key concern for employers of remote digital nomads is permanent establishment. This is a tax concept that could make a company liable for corporate taxes in another country if they have a significant presence there. Hiring a digital nomad won’t necessarily trigger permanent establishment — but it’s important to understand the risk.
Preparing for the future of digital nomadism in 2025
The digital nomad lifestyle is only going to grow in popularity as technology continues to improve and more countries introduce specific visas for remote workers. And, in today’s interconnected world, it’s easy to think that becoming a digital nomad is as simple as packing your laptop and hopping on a plane. But the reality is that digital nomads must navigate a variety of legal and compliance requirements.
Out of Office by CXC is a community-driven platform built to connect remote workers and digital nomads together, wherever they are. It encompasses a job board filled with global remote opportunities, along with support for relocation, visas and payroll, all designed to help both digital nomads and their employers comply with local regulations. Crucially, Out of Office also provides digital nomads with a sense of belonging, empowering them to thrive in remote roles anywhere in the world.
