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Digital Nomad Visas: State Incentives, Opportunities and Limitations

Digital Nomad Visas: State Incentives, Opportunities and Limitations

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Digital Nomad Visas have emerged as a policy response to the growing number of remote workers seeking to live and work abroad. Notably, the COVID-19 pandemic acted as a catalyst, accelerating the development and adoption of these visa programs worldwide.

Yet, what are the motivations behind the design and promotion of these visas by states? Apart from this interesting question, this article aims to explore the criteria digital nomads consider when selecting a destination, and the legal rights afforded to them. In doing so, it also critically examines the limitations and structural challenges associated with Digital Nomad Visas.

Understanding Digital Nomadism

Digital nomadism can be defined as a technology-enabled lifestyle that does not involve the need to be tied to a fixed workplace. More concretely, it describes individuals who combine remote work with travel, using digital tools to carry out their jobs from various locations with reliable internet access1Bozzi, A. Digital nomadism from the perspective of places and mobilities: a literature review. Eur. Transp. Res. Rev. 16, 50 (2024). https://doi.org/10.1186/s12544-024-00663-z. In both scholarly and non-academic literature, digital nomadism is commonly associated with sectors such as information and communication technologies, finance, scientific research, and other professional fields where services can be delivered without the need for physical presence2 KC, Hari, and Anna Triandafyllidou. “Digital Nomadism and the Emergence of Digital Nomad Visas: What Policy Objectives Do States Aim to Achieve?” International Migration Review, 2024, OnlineFirst, https://doi.org/10.1177/01979183241306367.

High living costs are a primary factor driving individuals to leave their home countries. Based on interviews with digital nomads in Bali, mostly from Western nations facing economic pressures like those in the UK, many cited financial reasons such as unaffordable rents, rising expenses, and high taxation. In contrast, destinations like Bali offer a significantly lower cost of living, allowing for better housing, frequent dining out, and opportunities for saving and investment. Additionally, many are drawn by the opportunity to travel while working and by the appeal of more welcoming, safer cultural environments than those in their home countries3Public First. Digital Nomads: How Many, Why and Does It Matter? Public First, 5 Mar. 2025, www.publicfirst.co.uk/wp-content/uploads/2025/03/05-03-25-_-DIGITAL-NOMADISM-FINAL-REPORT.pdf.

It is noticeable that, year by year, more countries are introducing Digital Nomad Visas, and an increasing number of people from diverse regions around the world are adopting the nomadic lifestyle. According to the Global Digital Nomad Report by Global Citizen Solutions4Global Intelligence Unit. Global Digital Nomad Report. Global Citizen Solutions, 21 May 2024, www.globalcitizensolutions.com/intelligence-unit/reports/global-digital-nomad-report/., 91% of active digital nomad visa programs were introduced after 2020, underscoring the pivotal role of the COVID-19 pandemic in accelerating their adoption.

As to the nationalities of digital nomads, as you can see displayed below, the highest proportion of individuals identified as digital nomads come from the United States and the United Kingdom.

What Nomads Look for in a Destination

According to Bozzi, there are various factors influencing the destination choices of digital nomads. First and foremost, reliable high-speed internet is essential, not only for enabling remote work but also for staying connected with friends and family. Second, a low cost of living, often linked to geoarbitrage5Geoarbitrage refers to the practice of relocating to a lower-cost country or region while maintaining income from a higher-cost economy, thereby increasing one’s purchasing power and quality of life. The term was popularized by Tim Ferriss in The 4-Hour Workweek (2007), where it was presented as a core strategy for achieving financial and lifestyle freedom through location independence., enables nomads to enjoy a higher standard of living or invest in entrepreneurial ventures. Third, strong local communities of like-minded individuals help combat isolation and foster networking and professional growth.

In addition, the availability of shared workspaces and cospaces is becoming increasingly important. Easy access to transportation, even in remote areas, is also key—most destinations are a few hours from a major airport. Lifestyle factors such as surfing, yoga, and other leisure or self-development activities are often considered. Natural beauty, heritage sites, and warm climates also rank highly among preferences6Bozzi, A. Digital nomadism from the perspective of places and mobilities: a literature review. Eur. Transp. Res. Rev. 16, 50 (2024). https://doi.org/10.1186/s12544-024-00663-z. Furthermore, there are other vital indicators identified by the Global Digital Nomad Report7Global Intelligence Unit. Global Digital Nomad Report. Global Citizen Solutions, 21 May 2024, www.globalcitizensolutions.com/intelligence-unit/reports/global-digital-nomad-report/.. Overall, the index created within the Global Digital Nomad Report comprises 12 targeted indicators organized into five thematic sub-indices: Visa Costs, Visa Benefits, Quality of Life, Economic Environment, and Technology and Innovation. It also accounts for safety, internet speed, and the ease of obtaining residency and citizenship, particularly for nationals holding weaker passports.

Nine out of the top Ten countries for a DN to live and work are in Europe, with only 1, Canada, in the Americas.

Interestingly, in terms of the economics indicator that considers cost of living, tax optimization, and co-working desk prices, Ecuador, Namibia, Mauritius, Cape Verde, and Peru top the list. This highlights why the index adopts a holistic approach in identifying the favorite destinations.

Governments’ Goals: Why Countries Are Offering Digital Nomad Visas

Being a digital nomad is no longer a trend; it is a phenomenon that has a considerable impact on the economy of home countries. For instance, “nearly 200,000 British citizens are currently working abroad as digital nomads, collectively earning £6.2 billion while overseas8Public First. Digital Nomads: How Many, Why and Does It Matter? Public First, 5 Mar. 2025, www.publicfirst.co.uk/wp-content/uploads/2025/03/05-03-25-_-DIGITAL-NOMADISM-FINAL-REPORT.pdf.” Furthermore, as stated in the GCS Digital Nomad Report, only one digital nomad visa program was created in 2018. However, this number increased significantly, reaching 26 program creations by both 2020 and 2022. This raises an important question: Why are countries offering these visas, and how can we categorize the incentives driving their implementation?

According to Kaisu Koskela9Koskela, K., & Beckers, P. (2024). Typologizing Digital Nomad Visas: Comparing Policy Rationales from Tourism to Wealth Accumulation to Immigration. Journal of Comparative Policy Analysis: Research and Practice, 26(5), 407–425. https://doi.org/10.1080/13876988.2024.2343696, there can be three possible options:

Tourism Promotion:

Digital nomad visas in tourism-dependent, middle- and low-income economies aim to enhance economic development by attracting tourists. Especially those launched during the pandemic had the objective of reviving tourism revenue affected by travel restrictions, extending tourism seasons, and promoting remote regions. For instance, the Croatian government generally uses DN Visa to increase off-season revenue and visits to unexplored areas. For instance, the Carribean countries were among the first to introduce DN visas in 2020 as a strategic response to the decline in tourism revenue, among the countries being Barbados, St. Lucia, Antigua and Barbuda, Dominica, etc.

Attraction of Foreign Investment and Entrepreneurship

In contrast, countries like the UAE and Thailand leverage digital nomad visas to attract foreign investment and entrepreneurship. The UAE targets wealthy, skilled individuals to secure long-term investments, while Thailand’s Long-Term Residence visa, requiring a minimum income of US$80,000 annually, prioritizes capital inflow through its international remote workers, which promotes the visa and targets investors over salaried professionals. In 2024, The United Arab Emirates had 5600 tech startups, the second highest in the entire MENA region after Israel10Number of Tech Startups in the Middle East and North Africa (MENA) in 2024, by Country.” Statista, www.statista.com/statistics/1489755/mena-number-of-tech-startups-by-country/..

Talent Acquisition through Migration

Additionally, some nations aim to use digital nomad visas to attract and retain tech talent and human capital. These visas offer incentives such as tax exemptions, fast-tracked applications, and potential pathways to residency, encouraging skilled workers to establish businesses or secure local employment. Not many, but such existing models expect the remote workers to find local employment or establish a business, with an opportunity to transition to another legal status.

Structural Limits and Legal Gaps

However, it is important to recognize that digital nomads often exist outside the scope of national labor laws, as their employment contracts are typically governed by foreign jurisdictions. This exclusion extends beyond labor protections to critical social services. A key limitation of digital nomad visas is the lack of access to public healthcare and social security systems. In most cases, visa holders are required to secure private health insurance for the duration of their stay, as they are ineligible for national health services. Moreover, while some countries allow dependents on digital nomad visas to enroll in public schools, such access is not universally guaranteed and may be hindered by practical obstacles such as language barriers or temporary residency status.

Housing is another area where digital nomads face difficulties. Their lifestyle often leads them to rely on short-term rentals, such as month-to-month leases or Airbnb stays, which are typically outside the protection of standard tenancy laws. Moreover, another concern is that DN visas contribute to inflation in local communities. As high-earning remote workers relocate to popular nomad hubs, they often outbid locals for housing, leading to increased rental prices.

Estonia, the first country to launch a Digital Nomad Visa (DNV) in the summer of 2020, has issued approximately 850 visas to date. In comparison, Malaysia’s Nomad Pass, introduced in October 2022, has been granted to 1,506 individuals, while Croatia has approved 1,411 digital nomad visas. 10 Interestingly, Estonia’s e-residency program (targeted at entrepreneurs and remote business owners)11The e-Residency program allows to establish and manage local-independent businesses within the EU without having to reside in Estonia. has seen far greater uptake, with 6,000 new e-residents approved between January and July 2024 alone. 10 This disparity may be explained by the relative ease of the e-residency process compared to the bureaucratic hurdles often associated with digital nomad visa applications. As a result, many self-identified digital nomads appear to favor Estonia’s streamlined e-residency route over formal visa pathways, using it as a more flexible and business-oriented alternative for remote living.

These factors explain why not all of these visas were as successful as expected, and for those seeking more stability, long-term residency visas can be a better option. Though some DN visas offer certain benefits like Portugal’s D8 visa12“Portugal Digital Nomad Visa: The Ultimate Guide for 2025.” Global Citizen Solutions, www.globalcitizensolutions.com/portugal-digital-nomad-visa/. that allows foreign nationals access to the national healthcare system, the right to work, full labor protections, and public education, it is not very common for DN visas to offer such benefits. Thus, those who seek long-term security, investment migration programs serve as a viable pathway.

An interesting observation is made by Koskela and Szabo, arguing that many existing Digital Nomad Visas schemes fail to align with the actual lifestyles and preferences of digital nomads, contributing to their limited adoption. Rather than embracing the flexibility of remote work, these programs often enforce rigid conditions, including extended minimum stay requirements, in-person embassy procedures, extensive documentation, and restrictions on intra- and international mobility. Such constraints are at odds with the inherently flexible and mobile character of digital nomadism. As a result, despite being presented as innovative migration tools, many DNVs remain grounded in traditional, static models of migration and fall short in providing practical legal frameworks or logistical support for transnational workers who exist outside conventional migrant classifications13Koskela, Kaisu, and Lily Szabo. “‘Digital Nomad Visas’: Critical Gaps in the Management and Facilitation of Transnational Remote Working Mobilities.” Radboud University Network on Migrant Inclusion Policy Brief Series, no. 2, 2024,https://runomi.org/wp-content/uploads/RUNOMI-Second-Policy-Brief-1.pdf.

Conclusion

Digital Nomad Visas (DNVs) are becoming more and more popular, with nine of the top ten destinations for digital nomads located in Europe. Countries promote these visas to boost tourism, attract foreign investment, and acquire global talent. However, digital nomads often fall outside national labor laws, with their employment governed by foreign jurisdictions. This exclusion limits access to key social services such as healthcare, social security, and housing rights. These factors may explain why many DNV schemes have not met certain expectations. Most programs impose rigid requirements, such as long minimum stays and in-person applications, that clash with the flexible nature of nomadic life. In contrast, long-term residency programs offer greater benefits and pathways to citizenship, making them a more attractive option for those seeking lasting integration.

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