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Digital Nomad Visas – What do employers need to know?

A digital nomad visa is a permit that allows a person to stay in a country for a designated amount of time, providing they can prove that they are working remotely for a foreign-based organisation. The most popular timeframe of a digital nomad visa is 12 months, however, it varies by country, and some have the option to extend those visas.

Why were digital nomad visas created?

Essentially, we are seeing the increase in popularity of the nomad visa as a direct result of the COVID-19 pandemic, with arguably more flexibility than ever before for people to work from anywhere they choose, which for some is abroad.

Prior to the COVID-19 pandemic, working from home was understood to be the ‘exception’. Fast forward two years and working from home is now considered to be very much the norm. As businesses recognise that employees are able to work remotely without a reduction in productivity, remote and flexible working has been instilled in society.

Countries are using digital nomad visas as a tool to attract foreign visitors who will contribute to local economies, whilst bringing new talent into their towns and cities. In recent years, UAE, Brazil and Italy have joined the digital nomad visa scheme to support economic growth and realise the benefits of the global nomad market, which is estimated to be around 40 million people.

What do businesses need to consider?

From an employer’s perspective, giving employees the opportunity to work abroad through a digital nomad visa could be an excellent attraction and retention tool for talent, especially in the midst of the Great Resignation and the cost of living crisis.

Employees may wish to pursue travel aspirations or return to their country of origin, and a digital nomad visa could offer the opportunity for them to fulfill this whilst retaining their role.

However, there are a number of areas to explore if an employee requests to work abroad.

Having a good internet connection and a space to work is a prerequisite and its important to consider that the employer’s duty of care extends to employees working abroad. Depending on the destination, the employer would need to consider the impact of time zones and agree an arrangement for working hours.

Tax and social security requirements also need to be considered and can be difficult and complex to navigate, and so we would strongly advise that legal advice is sought regarding any tax implications. There are also wider legal implications when employees are based outside of the UK.  The employer must also consider the employment rights of the country in which the employee is to be based, as this may lead to further entitlements, which we would also recommend seeking advice on.

Data protection is also a key aspect, depending on the type of work being conducted, especially when working in public shared spaces and where public Wi-Fi connections are not safe. Company insurance schemes would also need to be taken into account, to understand whether or not the employee is covered by them.

We are here to help

If you require support with employee requests to work abroad, our HR team can help. Please contact us to speak to an experienced Advisor or Consultant. We also have available a policy on working and travelling abroad which addresses these issues and many more, which will be vital for your business to consider if implementing hybrid working outside of the UK.

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