In June this year, Estonia announced the launch of a digital nomad visa – a new form of visa that would allow traveling nomads to legally work in Estonia during their “migration”. The argument is that the visa will attract traveling digital workers to the country, where they would then spend their money, share their knowledge, and generally benefit the local economy.

In an article on Sifted, Karoli Hindriks states that countries interested in drawing interest from skilled talent to their country should consider implementing a similar visa.

So, will this be the new visa trend?

Blast from the past

This isn’t the first time we’re seeing technology-driven visa initiatives. In fact, it bears many parallels with the startup visa – an initiative that we’ve seen spread like wildfire across Europe. Startup visas are issued in countries such as Italy, France, Ireland, the UK, Denmark, Sweden, Germany, Belgium, Spain, and all three Baltic countries. In fact, France even offers a startup investor visa.

Latvia implemented this document format in 2016 with the hopes of drawing highly qualified founders and startup employees to Latvia to boost the local startup ecosystem, and in turn, the economy (sound familiar?).

Flash forward 4 years, and the startup visa has been issued to 61 companies.

Speaking of the fact, statistics show that Latvian startup visas seem to be more appealing to the Eastern part of the world– almost 50% of the Latvian startup visa receivers so far have been from Russia. However, it’s not that surprising, as for easterners Latvia might be the most convenient pathway to get access to the European market and share their ideas with the Western part of the world.

An example falling into this category is commercial drone manufacturer Fixar, that has chosen Latvia as its starting point for accessing Europe due to political and territorial convenience, and the protection of intellectual property rights offered by the EU.

Depending on the perspective you take, you might consider the sum of Latvian startup visas issued little or a lot. On one side, that’s 61 more companies in the country doing business, generating income, paying tax, than if there hadn’t been this initiative. On the other hand, 61 companies over the course of 4 years may be slightly disheartening, considering that Estonia issued 140 startup visas in 2017 alone. Although all of the Baltic countries seem to be potentially appealing for Eastern-based startups that look up to the European market, not all 3 of them seem to take advantage of this fact and/or receive the expected outcome.

It begs the question – just because the visa is hot, does that mean that every country should implement one?

The business side of things

While you may be tempted to get into a conversation on immigration policy, I’d prefer to look at the situation from business terms. Going back to the basics of supply and demand, as well as resource management.

LIAA announced that they had a nearly 100% success rate of applicants for the startup visa, meaning that the companies that got to the application process were serious and qualified. So that lets us know that the right audience was hit with the right messaging. This could be a “quality over quantity” type of argument.

At the same time, how’s the demand end of things? Were there enough applications to justify the amount of time many different institutions invested into building, launching, and maintaining this program?

Some answers may be found in comparing the startup visa regimes between Latvia and other EU countries.

As seen in the previous paragraph, Estonia, for example, scores much higher when it comes to issued startup visas. Why so? Well, their startup visa regime isn’t that different from the one that Latvia offers, however, there are few quite crucial differences, that may be the case of why startups prefer Latvia’s Northern neighbour:

• Online application– seems obvious in the 21st century, but this is a thing that Latvia doesn’t offer to the applicants;
• Visa renewal length– although Latvia issues the startup visa for 3 years instead of Estonia’s offered 12-month visa, renewal option afterwards isn’t possible, but an application for other type of residence permit can be considered;
• Financial “safeguard” required for an applicant– both countries require a financial “buffer” from the applicant, however, the amount that is asked by Latvia is nearly 3 times bigger than the one asked by their Northern neighbour country.

These are just a few aspects overlooked and certainly there are more things to consider when trying to understand why startups choose Estonia’s offered visa option and therefore this particular Baltic country as their starting point. But this short comparison marks some clues already.

The digital nomad visa – round 2?

Estonia announced their intentions to launch the Digital Nomad Visa on June 7th. Just over a month later, we’re seeing Barbados announcing a similar document – a remote-work visa for up to 1 year (the same maximum amount of time as Estonia’s).

The question is – is this type of document something all countries should implement to make remote working and digital nomadism more accessible in their countries? Rather than speculate, I decided to ask a few well-informed individuals. Notably – full-time digital nomad, Stewart Rogers. His work as Managing Editor at GritDaily and Co-founder of Badass Empire allows him to take his work on the road.

The announcement of the Estonian Digital Nomad Visa is undoubtedly exciting. I visit the Baltics regularly, and the breadth of the Estonian DNV is a breath of fresh air compared to more restrictive DNVs in other countries.
It doesn’t just cover freelancers, but also those that have foreign employers, and want a place to call a base for a year. Similar DNVs in Portugal, Costa Rica, Mexico, and the Czech Republic are more restrictive.

I hope that more countries provide DNVs so that the digital nomad status becomes normalized and accepted. I’m a little tired of having to choose a country and city of residence when I apply for services (web or otherwise) when, in fact, I’d love to choose “Global Citizen” and be done with it. If we make being a digital nomad ordinary, maybe that will become a reality.”

What we can learn from Stewart Rogers is that for a digital nomad that’s frequently on the go, these long-stay visas are not the “make it or break it” deal. However it goes a long way to acknowledge this format of working, which hopefully will benefit freer movement around the globe.

One question that’s always at the top of mind, both for visa-issuing countries as well as nomads, is the question of tax.

Estonia’s digital nomad visa finds that if a person is working in Estonia for 183 days of a year (approximately 6 months), they are considered Estonian tax residents and must pay tax. How do digital nomads deal with this, if they’re already paying income tax somewhere else?

Rogers indicates that the Estonian tax scheme is not applicable in his situation, as he does not spend so much time in one place.

For me, staying anywhere for any real length of time doesn’t suit my style of nomading. Still, along with the e-Residency already available in Estonia, it certainly looks attractive.”

Though it seems unlikely that the tax scheme is what will attract nomads to Estonia, it may pave the way to normalizing nomadic lifestyle, which in turn may prompt the development of questions relating to tax, social security, retirement, and more.

The future of business as we know it?

Since at TWINO we’re increasingly looking to support WFA (work from anywhere) policies, the digital nomad visa is an intriguing solution to a relevant problem. Now that an increasing amount of employers, including ourselves, are open to large portions of their workforce working remotely, it’s worth considering this possible future where these policies might fit in. Particularly in a post-COVID reality when travel becomes more safe and accessible.

In a survey of over 5,000 office workers, the majority said that they would like a hybrid workplace, mixing both working at an office, as well as remotely. Perhaps these new visa formats will make it possible to explore that reality at an international scale.