Can you see yourself immersed in the vibrant chatter of a Bia Hoi in Hanoi or basking in the glow of a Tonsai Beach sunset – all while meeting your work deadlines and saving toward retirement? This is the allure of the digital nomad lifestyle that captivates many. 

Before you pack your laptop and book a one-way ticket to Bali, however, there’s a question that’s been buzzing around the world’s cafes, apart-hotels, and coworking spaces like a persistent mosquito: Is being a digital nomad legal? And should it be? 

To get to the bottom of this 21st-century conundrum, we dove into the legalities of tourist visas and work permits, explored the bureaucratic hoops nomads have to jump through, and chatted with a few remote workers to gain their insights. Below, you’ll find a full breakdown of the benefits, challenges, and legalities of the digital nomad lifestyle. 

What Is a Digital Nomad Lifestyle?

A digital nomad is someone who leverages technology to work remotely and live an independent and wandering lifestyle. They’re not tied down by physical offices or rigid schedules. Instead, they’re free to work from anywhere in the world (Wi-Fi permitting), exploring new places and cultures along the way.

To the restless and adventurous at heart, there’s something irresistibly enticing about the idea of moving from place to place every few months. Sick of city life? No worries – you can pack up and move to the country. The moment you get bored or develop a hankering for different scenery, you can start planning your next adventure. 

Of course, as with everything in life, it’s not all sunshine and cocktails. From finding reliable Wi-Fi to navigating time zones, this lifestyle comes with a plethora of unique challenges. Chief among these is the legality of it all. 

Is being a digital nomad Legal?

The answer to this question depends on how you’re doing it and what country you’re in. If you’re traveling around on tourist visas, there are a few ways you could end up in a legal gray area, both in the countries you visit and back home. 

For example, Thailand technically requires a work permit for any work performed in the country. So even if your employer or clients are based in another country, you technically could run into problems if caught. Of course, in practice, few nomads are getting in trouble for working on their trips to Thailand. 

Where you might push the limit a little is if you’re making money in a way that takes potential work away from locals. For example, if you’re paid by local hotels or resorts to do promotional work, that’s clearly something a local person could do. So if you’re really unlucky, there’s the potential that you could find yourself in trouble. 

In practice, however, this doesn’t seem to be much of an issue… not yet anyway. None of the nomads we spoke to have experienced any legal problems arising from working on their travels. Many publish freely on social media, with their paid promotions made perfectly obvious on their pages. They did note that whether or not you’re questioned about work can vary greatly depending on the country you’re visiting, your citizenship, your visa status, and the local laws. 

The nomads who do tend to get in trouble are not those who quietly write, design, or program from the comfort of their Airbnbs. A recent example of problematic nomad behavior comes from Indonesia, where travelers on tourist visas have been operating tours, retreats, and other services from their accommodation. By failing to obtain the proper work permits and licenses, these nomads have stepped beyond the grey zone and into illegal territory. However, since this is a relatively new trend, it seems to be taking some time for the law to catch up with them. 

All things considered, you’re definitely operating within blurred legal lines if you’re traveling and working on tourist visas. In practice, few people seem to be having any issues. However, some are pushing their luck by engaging in clearly illegal activities, and this could have repercussions for all nomads, not just the law-breakers.

If you’re not a fan of legal ambiguity, you’ll be pleased to know that some of the most popular nomad destinations have started introducing Digital Nomad Visas. These visas give travelers permission to live and work remotely in a foreign country, so long as they meet certain criteria. 

Digital Nomad Visas 

A Digital Nomad Visa is a type of residence permit that allows you to live in a country and work remotely for a certain period, typically more than 90 days. This visa is designed for people who can perform their work anywhere using telecommunications technology. The requirements and benefits vary from country to country. To give you an idea of what you can get and whether you qualify, let’s take a look at two examples: 

Estonia Digital Nomad Visa

Estonia offers a Digital Nomad Visa that allows remote workers to legally stay and work in the country for up to a year. To apply, you need to be able to work 100% remotely and you must meet the minimum monthly income requirements. You also have to fit into one of the following three categories: 

1. Have an employment contract with a company external to Estonia;
2. Conduct business through your own company that’s registered outside of Estonia;
3. Work as a freelancer for clients whose businesses are registered outside of Estonia.

Croatia Digital Nomad Visa

Croatia is another country offering Digital Nomad Visas, allowing remote workers to stay in the country for up to a year. To qualify, you must work for a company outside Croatia and be able to prove that you’re not a citizen of an EU or EEA country. Once again, there’s a minimum monthly income requirement, and you’ll need to be able to prove that you’re capable of financially supporting yourself throughout your stay. 

Hint: If you’re interested in applying for a Digital Nomad visa in these countries (or any others, for that matter), your first step should always be to head to the official government websites. In addition to giving you the most accurate and up-to-date information, this can save you from paying excessive fees or falling prey to immigration scams. 

Where do digital nomads pay tax?

If you hang out in expat circles frequently, you’ll meet at least one person who proudly boasts about their system for avoiding taxes. That “system” often involves moving from country to country every three months to avoid becoming a resident for tax purposes. Though the idea of keeping all your hard-earned money may sound appealing, doing so via tax evasion is never a good idea.  

A small percentage of nomads may not have to pay taxes due to reasons such as earning below the taxable income threshold or residing in tax-friendly countries. However, most should be paying taxes in their home country or the country where they spend most of their time.

The issue is that, even if you’re not actively trying to evade taxes, you can end up moving around so much as a nomad that you fall into a legal gray area. This can result in nomads submitting tax documents in multiple countries, getting charged eye-watering fees by accountants who claim to specialize in nomad finances, or feeling completely confused about where, when, and how they’re meant to file their taxes. 

Perhaps the most problematic legal grey area arises from the fact that there’s no international tax law regarding digital nomad taxes. The concept of not having a permanent home base anywhere is simply non-existent in tax regulations. Across the world, we’re still operating from laws that were written in times when people stayed in their home countries.

Can you deregister as a resident to avoid taxes?

Many nomads seem to believe that deregistering as a resident in their home country can free them from their tax obligations. However, this isn’t necessarily the case. Let’s consider a UK nomad, for example. 

If our hypothetical nomad decides to deregister as a resident and move to Bali, they’re correct in understanding that they won’t have to pay taxes to the UK government on foreign income. However, if they continue to earn money from sources within the UK (such as rental income, savings interest, or wages), they would still be legally required to pay tax on that income, regardless of their residency status.  

Hint: If you’re a nomad currently lurking in one of these taxation grey areas, it’s worth consulting a legal professional or tax advisor for personalized advice based on your circumstances. The last thing you want is to head home for a visit only to be questioned on your tax status. US border control can detain citizens and question them about their taxes. This is a rare occurrence, but it’s still not worth rolling the dice.

Should laws change to accommodate digital nomads?

Most nomads want to stick within the bounds of the law. The problem is that the legal system hasn’t yet caught up with their free-roaming ways. Many companies are also perfectly comfortable engaging globe-trotting freelancers. However, legal issues like data protection prevent them from being able to allow their workers complete locational freedom. 

So the question of whether laws should change to accommodate this new and growing group of global citizens is a tricky one. Let’s take a look at some of the potential benefits and drawbacks of adapting international and local laws to accommodate digital nomads.

Advantages of establishing nomad-friendly laws

• Adapting to the new normal: The rise of remote work and digital nomadism is a significant shift in how we view work and lifestyle. During the pandemic, many people gained a new appreciation of the importance of work-life balance and the horrors of hustle culture. In light of this, it might be beneficial for laws to adapt to a new reality that supports freedom and flexibility.
• Clear guidelines: Many digital nomads operate in frustrating gray areas, especially when it comes to visas and taxes. Clearer laws could provide better guidance for these individuals, reducing uncertainty and potential legal issues.
• Attracting talent: Countries that create favorable conditions for digital nomads could attract talented people from around the world, potentially boosting their economies.

Disadvantages of establishing nomad-friendly laws

• Potential for misuse: There’s a risk that more lenient laws could be misused, for example, by individuals seeking to evade taxes or immigration controls.
• Strain on resources: An influx of digital nomads could put a strain on local resources and infrastructure, particularly in popular destinations.
• Gentrification: The arrival of digital nomads can drive up local property prices and living costs, potentially displacing long-term residents and changing the character of neighborhoods. This process, known as gentrification, isn’t necessarily good or bad but it can lead to social and economic disparities within communities.

Ultimately, the answer probably lies somewhere in the middle, with countries adapting their laws to better accommodate digital nomads while also putting safeguards in place to prevent misuse and protect local communities. It’s a complex issue that requires careful consideration from lawmakers.

While the digital nomad lifestyle is generally legal, nomads must do their research and ensure they’re complying with the laws of the countries they plan to visit. Top of the list should be understanding visa requirements and tax obligations as these are the two most concerning legal grey areas. As mentioned throughout the article, it’s also a good idea to consult with a professional if you’re unsure about anything. 

Want to improve your chances of making it through the legal ambiguities and uncertainty of the digital nomad lifestyle? Check out our guide to the most common logical fallacies.