The rise and rise of the digital nomad

Claudia Gualdi, travel intelligence data team lead, Riskline

The prevalence of ‘digital nomads’ – someone who performs their job almost entirely over the internet whilst travelling or residing away from home – has snowballed since the Covid-19 pandemic spread across the world in 2020. The lifestyle offers a range of benefits, including lower living costs, flexible working and the opportunity to explore new destinations and interact with different cultures. Unsurprisingly, as digital nomadism has become increasingly popular, businesses have been left to fathom its impact and how to manage it – or indeed whether to permit it at all. BTN Europe speaks to Claudia Gualdi of Copenhagen-based travel risk intelligence company Riskline about the trend.

BTN Europe: How popular is the digital nomad lifestyle now in the wake of the Covid-19 pandemic?

Claudia Gualdi: The number of digital nomads has grown exponentially in the past few years, reaching at least 40 million people worldwide. During the Covid-19 pandemic, between 2019 and 2022, the number almost tripled. While remote work for many companies had to be provisional during the pandemic, it remained popular even after countries lifted travel restrictions, allowing international movement to resume for both leisure and business.

BTN Europe: What's acceptance of the digital nomad set-up like among corporates now?

Claudia Gualdi: Nowadays, at least 16 per cent of companies worldwide allow employees to work fully remotely. In the UK, working from home – a variation of digital nomadism – is especially common. In response to an ONS study, 44 per cent of workers reported working from home or hybrid working.

BTN Europe: What are the main reasons that people are turning to digital nomadism?

Claudia Gualdi: Chiefly, it is the flexibility it offers – digital nomads are able to explore multiple locations and can experience life in a new country as a local. Perhaps surprisingly, there are also some cost benefits too.

BTN Europe: Isn’t it an expensive lifestyle travelling from country to country?

Claudia Gualdi: Contrary to popular belief, hopping from country to country can be cheaper than permanently settling down, especially for those who struggle with expensive housing and rent – namely the younger workforce. For example, Indonesia’s Bali and Thailand’s Bangkok offer low rent and living costs, which helps make them popular locations among digital nomads. However, one of the side effects of growing numbers of digital nomads abroad is that by taking advantage of cheaper living arrangements in some cities, house prices are being slowly driven up. In addition, living as a digital nomad can bring tax benefits.

BTN Europe: How does current visa regulation affect digital nomad behaviour?

Claudia Gualdi: Although digital nomads often hop from country to country, 80 per cent prefer to stop in a single place for three to nine months due to visa and cost reasons. Tourist visas normally allow them to enter and reside for a short stay (90 days) and work remotely. Many countries allow visa-free entry, often for up to six months, during which they can reside and work without visa requirements. Popular countries like the United States and the United Kingdom don’t offer digital nomad visas due to their efforts to limit migration, but digital nomads can still benefit from short stays during which they can visit and work.

For stays longer than 90 days, a long-term or work visa may be required. These visa types are more difficult to obtain due to bureaucratic requirements, such as proof of sponsor/invitation by a local company, bank statements, proof of employment with a minimum duration or proof of running a regular business in the country. Work and business visas are also more costly in terms of fees.

BTN Europe: Which countries have launched digital nomad visas and what are their reasons for doing so?

Claudia Gualdi: Over 66 countries have launched digital nomad visas, including Anguilla, the Bahamas, Greece, Portugal, Spain, Croatia, Germany, Norway, Japan and Taiwan. With the growth of this trend, more countries are working towards regulating this type of work with new visa schemes. The purpose of these visas is to boost the local economy by encouraging relatively wealthy individuals to reside and work there for a certain period.

Most digital nomad visas cover stays between one and two years and offer some benefits, including special rates, tax reductions, or full tax exemptions. The tax regulation for digital nomad visas is complicated and varies from country to country. However, many digital nomad visa applicants face a common obstacle, which is the requirement for a minimum yearly or monthly income that can be quite steep.

BTN Europe: Do many companies set digital nomad policies?
 
Claudia Gualdi: As the trend grows, an increasing number of companies are developing specific policies to accommodate digital nomads. These policies often outline guidelines for remote work, time zone coordination and communication expectations. They support the employees' desire for location independence while ensuring productivity and compliance with local laws. Such policies can also help companies attract and retain talent, particularly among younger workers who prioritise flexibility and work-life balance.

BTN Europe: Are you seeing any trends regarding which business sectors are more likely to allow this sort of work set-up?

Claudia Gualdi: Absolutely – the tech industry is at the forefront, with many companies embracing remote work and digital nomadism. Other sectors following suit include marketing, creative industries and consulting. These fields often rely on digital communication and collaborative tools, making it easier for employees to work from anywhere. Start-ups and smaller companies tend to be more flexible in adopting such arrangements compared to traditional, larger corporations.
 
BTN Europe: How can companies manage and keep track of where their employees are?

Claudia Gualdi: Effective management of remote employees involves leveraging technology and clear communication strategies. Companies can use project management tools, time-tracking software and regular check-ins to stay updated on their employees' locations and progress. It's also crucial to establish clear expectations regarding availability and deliverables. Some companies implement ‘work from anywhere’ policies that require employees to inform HR of their location, especially if they change countries, to ensure compliance with tax and legal requirements.

BTN Europe: What responsibilities do TMCs have towards digital nomads?

Claudia Gualdi: Despite the low chances of getting caught in legal troubles in foreign countries, travel agents and travel management companies should direct digital nomads to the appropriate visa option as part of their duty of care responsibilities. They should be able to guide or help clients get an appropriate digital nomad visa and comply with the latest regulations in each country.