More Countries Open Their Borders to Self-Sufficient Migrants
Your US passport, once a gateway to the world, is now a travel liability. As I pointed out in this article, the number of countries US citizens can travel to without a visa, or with minimal visa restrictions, has fallen by more than half in the last six months. Countries such as Albania, Moldova, Serbia, and Ukraine now offer their citizens a passport of better travel quality.
But the pandemic will eventually end and travel restrictions will one day ease. And if you can work remotely as a “digital nomad” when they do, an increasing number of countries are rolling out the red carpet for you to relocate there. Plenty of countries and territories would love to have well-heeled Americans come live there(at least temporarily).
Estonia’s “Digital Nomad Visa” initiative gives remote workers the right to live in Estonia for one year while working for a company registered abroad. Alternatively, you can work as a freelancer for non-Estonian clients. You must meet minimum income requirements and pay a flat 21% tax on your earnings, which you can credit against your US income tax obligations if you’re a US citizen.
Estonia’s chilly climate isn’t for everyone, and the language is almost indecipherable. But everyone in the country speaks at least some English, and you’re under no obligation to stay in the country 100% of the time. Since Estonia is an EU member, you can travel to any other EU country visa-free.
Unfortunately, Estonia’s borders are currently closed to US citizens (but not Canadians). Only people coming from a COVID- approved country are able to apply for a Digital Nomad Visa. And you’ll need to visit an Estonian consulate before your application is approved.
Barbados recently unveiled its “12-month Barbados Welcome Stamp” program, allowing you to come to the country and work remotely for a full year. You don’t need to show proof of income, but you will need to pay a $2,000 application fee -- $3,000 if you plan to bring your spouse (opposite-sex only) and children.
The Barbados program is up and running and Americans are free to apply as the US isn’t on a COVID-related exclusion list. And the entire application process is electronic: there’s no need to visit a Barbados embassy or consulate. With this visa, you won’t need to pay Barbados tax on your earnings. But keep in mind this policy won’t help you if you’re a US citizen, since Uncle Sam taxes you on your income no matter where you live.
Barbados bills itself as a “tropical paradise” and boasts that it has the fastest fiber internet and mobile services in the Caribbean, as well as "a range of flexible office space locations." Since the official language is English, you’ll find it easy to communicate. And if you find yourself getting “island fever” on this small (167 sq. mile) rock in the Lesser Antilles, you can leave anytime.
Bermuda. In August, Bermuda announced it would give self-sufficient migrants a one-year visa under its “Residential Certificate Policy.” While you can’t work in the local economy, digital nomads are entirely welcome. And unlike Estonia, you don’t need to demonstrate a minimum monthly income to qualify for the visa. And there’s no income tax, which has always made Bermuda a draw for well-heeled residents.
Bermuda is perhaps best known as an international financial center for banking, captive insurance, and international business. But tourism is also a big draw, and thanks to the pandemic-related travel shutdown, tourism revenues have fallen sharply in 2020. Rolling out the red carpet for self-sufficient migrants is designed to make up some of the shortfall.
Bermuda enjoys a mild climate year-round, although it’s susceptible to hurricanes. And although the island is tiny, it has first-class amenities, including high quality (albeit expensive) medical care. It’s also a small, tightly knit culture and somewhat socially conservative.
United Arab Emirates. In 2019, the UAE began processing applications for a retirement visa permitting foreign retirees (55 or older) to apply for a five-year renewable visa. To qualify, you must purchase an investment property in the UAE valued at two million dirhams ($544,500), have savings of at least one million dirhams, or demonstrate an income of 20,000 dirhams or more. Successful applicants can bring their spouse (opposite-sex only) with them to the UAE.
The UAE consists of seven individual emirates, with the largest and most popular for expats being Abu Dhabi and Dubai. And Dubai has now introduced its own retirement visa with slightly different requirements.
These initiatives are some of the latest measures to encourage
tourists, students, and job seekers to spend more time in or even relocate to the UAE in the wake of falling oil prices. In particular, the government hopes to boost demand for luxury real estate and retail consumption. Moreover, there’s no income tax, although again, US citizens don’t benefit from this status.
The UAE has a huge variety of cultures, food, and experiences available. It also has a high-qualify physical infrastructure with first-class medical care readily available. But summers in this region are almost unbearably hot, so most retirees spend a few months annually there. And it’s socially conservative with some of the world’s strictest anti-drug laws.
Georgia. At the crossroads of Europe and Asia, the nation of Georgia has long welcomed expats. US citizens (and citizens from dozens of other countries) can already spend up to one year in the country without a visa. During that time, you can work in the local economy without any restrictions. And at the end of it, you can leave the country, come back the next day, and stay for another year. You can also qualify for a five-year renewable residency permit in return for a $35,000 investment if you want to make doubly sure you’re permitted to come back. There’s also a visa issued for the equivalent of a $125,000 investment that awards successful applicants immediate permanent residency.
Georgia also has some of the lowest living costs in Europe, along with some of its best food. It’s also one of the easiest places in the world (apart from Delaware) to set up a company. The corporate income tax is only 15%. There’s also a 20% tax on personal income, but only within Georgia. Capital gains within Georgia are taxed at 15%.
The downside is that Georgia’s neighbor Russia regularly intervenes in local politics and in 2008 invaded the country to support the “breakaway provinces” of Abkhazia and South Ossetia. The physical infrastructure of Georgia also isn’t as advanced as that of Bermuda or the UAE, and medical care generally isn’t up to Western standards. It’s also socially conservative, with far-right vigilante groups targeting refugees, gays, and other minorities.
Where Not to Go
Not everyone is rolling out the red carpet to expats. The US is the best-known example, with President Trump signing executive orders suspending many work visas and imposing a self-sufficiency test (now overturned by a federal court) on applicants for permanent residency.
The US isn’t alone in its anti-expat policy. Spain’s federal tax authority recently declared that it would not change its residency rules to exempt tourists, students, or short-term visitors stranded in the country due to ongoing COVID lockdowns. Anyone spending 183 days or more in Spain in 2020 thus must file a tax return and pay tax on their worldwide income.
Meanwhile, Singapore, long known for its restrictive immigration rules, has announced further policy tightening with the intent of forcing some expats to depart. The government has increased the minimum monthly salary a non-citizen or temporary resident must earn to at least S$5,000 (US$3,300). Employees over the age of 40 must earn twice that much to keep their residence permit.
Relocating abroad is a big decision. In our premium subscription service, Nestmann Inner Circle Gold, we discussed some of the considerations for an international relocation in this Alert. This issue discusses some of the unique considerations digital nomads who work internationally should review. And last week, we published an expanded version of this article which included a list of domestic incentive programs which will actually pay you to relocate to another state.
To learn more about Nestmann Inner Circle Gold, and how you can obtain a risk-free subscription, follow this link.
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