The rise of the immigration remote working visa

Tuesday 18 October 2022

Julia Onslow-Cole
Fragomen, London

In July 2020 during the Covid-19 pandemic, Estonia was the first country to announce the launch of a digital nomad visa. A law was passed offering one-year visas to freelancers and employees who were able to work remotely and spend part of their time working from the Baltic state. Estonia hoped to increase its working population and boost economic growth, as well as strengthen its image as an e-state. Applicants for the scheme had to show that they were making at least £3,174 per month and would be given a visa for a 12-month stay in Estonia including 90 days of travel across Europe’s 26-country Schengen zone. Unfortunately, the scheme in Estonia was badly hit by a second wave of Covid-19, which meant that the government was reluctant to encourage travellers from overseas and immigration was not a priority. The immigration process was also not well-defined and initially included the requirement of having a ‘patron’ or local sponsor to take legal responsibility for the digital nomad. There was little guidance available on these requirements and the uncertainty around the process also affected the initial success of the scheme.

Closely following Estonia, several countries have devised different forms of remote working visas, many of which became successful within a short period of time. In particular, in the summer of 2020, Barbados opened its remote working visa scheme where applicants earning $50,000 or more a year from an employer based outside the country could come to live and work in Barbados. The Financial Times ran a story at that time about a businessman who swapped his office in rainy southwest England for a new office next to a polo field in Barbados. He and his wife, who was also working in the UK, packed up their belongings and moved within a week.

Antigua, The Bahamas, Bermuda and St Lucia quickly followed with their own schemes. Caribbean governments reported being overwhelmed by interest in their schemes, which helped their economies which had been disproportionately affected by the pandemic as an average of 40 per cent of their gross domestic product (GDP) was connected to tourism. About two thirds of the new remote workers came from Canada, the UK and the US. The tax regimes were also attractive to remote workers.

The remote working visa in Dubai in the UAE has been a very popular choice by employers who have been forced to move Russian employees out of Russia quickly because of the impact on their businesses following the invasion of Ukraine. Not only is the Sputnik vaccine recognised by the UAE, but the requirements of the visa itself are easily accessible.

There are currently approximately 46 countries offering remote worker visas with common benefits and requirements. The visas provide entry and work rights, require minimum monthly salary ties with and employment by companies abroad and local sponsorship or local work is usually forbidden. From a national policy, perspective remote working visas are seen as a means of increasing GDP and revenue and drawing foreign investment into an economy. From a company perspective moves to a remote workforce were accelerated by the pandemic which brought country entry and exit bans, lengthy quarantine requirements on entry and a significant increase in relocation costs.

Nevertheless, remote working has created many compliance issues. These include the risk of the creation of a permanent establishment for tax purposes and other tax implications, data security including the increased risk of cyber-attacks, and the general lack of communication and engagement. Against this background there is currently much debate as to whether the current trend of using remote working visas has reached an equilibrium.