How to properly insure a digital nomad lifestyle

Working from anywhere in the world: sounds like a dream, doesn’t it? During the corona crisis, the amount of ‘digital nomads’ has skyrocketed, and it seems to be a trend to stay. But is a laptop and a stable internet connection really all that’s required? The answer is quite simply no. When the world is your office, one of the first things you’re going to need to look at is your social security and insurance.

What to take away from this article

  • Crossing borders could land you in a new employment ‘status’
  • Some European countries are more flexible than others when it comes to remote working
  • The best statute for digital nomads is freelancer
  • Several countries give tax breaks or offer tax exemption to digital nomads
  • As health care and medical services vary, it’s important to have insurance that adapts as you go

A shift towards home and remote working

The corona crisis has made us reshape our personal and professional lives. Many studies show that homeworking is here to stay. Some even suggest that 40 to 60% will be the norm in the future! It’s not difficult to understand: homeworking allows for a more flexible daily schedule and takes away the stress of a long commute. For some of us, though, working remotely doesn’t necessarily mean ‘home’. Since the start of the crisis, many countries have been handing out remote worker or freelancer visas. It’s advertised as a win-win situation: you’re working from a beautiful place with a relaxed atmosphere, and in turn these countries make up for losses in the tourism sector. For it to be a win-win, however, you need to be well prepared.

Social security: European rules

Are you planning to work in another European country? If you cross borders, it’s possible that you find yourself categorised under a new employment ‘status’: that of frontier worker, or salary splitter, for example.
According to EU rules dating back to 2010, anyone who works more than 25% from home in a foreign country (slightly more than 1 day a week), should be covered by the social security of the country where he or she is residing the majority of the time. Theoretically, that would mean that lots of companies would have to set up a ‘foreign’ payroll system, which preferably they don’t. If everyone works from home 2 or 3 days a week and a frontier worker is not allowed to, this could easily be seen as discrimation.

Luckily, during the pandemic, some countries like the Netherlands, Belgium and Germany, have agreed to allow exceptions on this rule, giving workers more flexibility. After the pandemic, the common rules will apply again.
The best statute for digital nomads would be freelancer, so you don’t depend on the goodwill of your employer to adapt his payroll. Employees enjoy too much protection, which inevitably leads to inflexible situations. Many of these employment rules date from before the existence of the internet.

Occupational accident insurance

On top of that, your employers’ occupational accident insurance could become a problem. You can be allowed to work from home, but if you stay at your second residence at the sea side, this is not seen as your home address, and thus not your ‘working place’. An accident during work time could then be refused.

Popular destinations for digital nomads


Mexico City

visa for 1 year, extendable to 4 years with proof of a min. monthly income of $1.620 required

Iceland

visa for 6 months, with proof of a min. monthly income of €6.500 required


Bahamas & Bermuda

visa for 1 year (extendable). $500 for students, $1000 for workers.

Mauritius

visa for 1 year (extendable), free of charge



Dubai

exclusively for families, with proof of a min. monthly income of $5.000. No income tax!


Portugal

visa for 1 year (extendable), min. monthly income of $750


Cayman Islands

visa for up to two years, min. yearly income of $100.000 required

Costa Rica

visa for two years (extendable), only for entrepreneurs


Berlin

freelancer visa for 3 months with possible residency permit afterwards

What about taxes?

Working abroad can also mean a change in your tax system. Some countries, like Greece and Croatia, give out tax breaks for foreigners who decide to work in those countries. Usually, these are countries dealing with a loss of tourism and brain drain. As a digital nomad in Greece, your taxes are deduced by 50% for 7 years. In Croatia, you can work tax-free for the first year. On top of that, those countries also make it very easy to extend your visa if you wish to prolong your stay. More exotic locations, like Barbados for example, even offer tax exemption if you can prove that you make a minimum of 50.000 USD per year.

What the brochures don’t tell you

Working abroad also means living abroad. Your free time might include hiking, extreme sports, and other attractive pastimes the place might have in store for you. Inevitably, you’re taking some risks traveling to a country where the health care and medical services might not be as extensive compared to your home country.

“Catching the flu or stubbing your toe badly on a rock could land you in a very difficult and costly situation”

Simple things like catching the flu or stubbing your toe badly on a rock could land you in a very difficult and costly situation, which is why proper insurance is absolutely indispensable. As stated above, every country has its specific rules, regulations and health care system. Choosing an insurance plan that adapts as you go should be the first step you take as a future digital nomad.

Expat & Co’s Digital Nomad Insurance keeps you safe

If you’re thinking about a remote working adventure, make sure to talk to Expat & Co first. Our flexible travel and health insurances are adaptable as you go and tailored to your specific needs.

“Thanks to our Chameleon Principle, you enjoy the same coverage wherever you’re heading”

On top of that, thanks to our Chameleon Principle, our insurance easily adapts to the social security system you have, no matter where you are heading to.

Thinking of working abroad? Our experts make sure you can travel and work without any hassle. Get in touch or get your free quote here!

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