Labor LawDigital Nomads and Legal Effects

Although digital nomads were already known before the pandemic, the coronavirus has caused this type of workforce to increase considerably around the world, either by their own decision or even by new company policies. These persons may provide services under this modality for a fixed period or even permanently, without having to be physically present in a specific place as most employees used to do. As a result, some of these employees have decided to return to their place of origin or even decided to turn their lives around by leaving their hometown or even the country in which they lived.

Leaving aside the organizational challenges that employers or even workers may have regarding labor productivity under these types of conditions, it is crucial to make an analysis from the legal perspective and specifically on issues of immigration, employment and tax law. Do I need a visa from the countries I plan to visit while working remotely? Will I be covered by my health insurance during my travels? Do I have to declare or even pay taxes in the different jurisdictions I visit as a digital nomad? These are just a few questions that may arise from this condition and will need to be reviewed carefully with your legal advisor.

In recent days we have seen in several news published by national and international media, issues related to remote work visas. Antigua and Barbuda, Barbados, Bermuda, Estonia, Georgia and Croatia are implementing visas and residency programs for digital nomads who wish to temporarily relocate to these countries. Compared to traditional work visa options, these programs provide a more affordable option for those who are investing or starting a business in a new country. However, it is worth continuing to consider other visa options not specifically designed for remote work that may be just as beneficial on a case-by-case basis.

Now, what can a digital nomad do when they go to travel to countries where there is no clear regulation of this type of activity? There has always been a debate about which activities should be considered as business or work from an immigration perspective, therefore, when a worker with this condition wishes to enter Colombia, they must mention that they are coming to work or that they will simply carry out tourism activities?

On the other hand, from the tax perspective, the time spent in the country, as well as the activities to be carried out, will be relevant because they may generate tax residence in the country they visit and, thus, obligations or payments for this concept must be fulfilled.

It should also be taken into account that the travel insurance would generally only cover short term visits or stays, or if it is the EPS (Health Promoting Enterprises) or ARL (Professional Employment Administrator), local coverage initially, so this should be taken into account in case of a contingency during the stay.

These phenomenon are no longer the future but the present and will continue to increase every day, which is why, our invitation is to support and regulate them from different areas as in other jurisdictions, as they can be very beneficial to the country, even more so in an extraordinary situation like the one we live in today.