Competing for the digital nomad
On December 3rd Forbes reported the latest country to get on the growing digital nomad bandwagon:
On Wednesday (2 December) Greece's parliament passed a new law allowing digital nomads to half their income tax. This makes Greece the latest European country to try and woo the new work-from-home workforce, and puts southern Europe against the North in a new talent race.
"If you can work from anywhere, why not work from Greece?"
Good question. But of course the question for the digital nomad is, “if you can work from anywhere, who is giving the best deal?” Halving your income tax sounds like a very good deal, particularly if you can combine it with sun, beaches, culture and good food. But Greece is by no means the only destination wooing digital nomads with these kinds of seductions. A recent study by WYSE Travel Confederation showed that thanks to the pandemic, 20% of their members were actively developing digital nomad products, in destinations ranging from Sweden to South Africa, and from Thailand to Peru.
Although digital nomads have been around since it became possible to find decent Wi-Fi in beach huts around the world, the recent drive by countries to attract this mobile market is changing the scene. Previously, digital nomads were relatively ignored by their hosts, and a desire to avoid taxes meant that most nomads were also happy to be below the radar. The first moves to attract nomads were therefore very pragmatic. Estonia realised that it had a growing army of freelance workers who were not linked to the tax system (or any other administrative system, for that matter). Creating a visa for the nomads was therefore a way of turning this hidden workforce legit, and capturing at least some of the previously lost tax income. And in the longer term, maybe attracting more mobile taxpayers. The Estonians are also aware that digital nomads are generally highly educated and highly skilled, so they also represent a new gain in terms of talent. This may also be a major bonus for countries like Greece, which have seen a brain drain in recent years. But capitalising on this flood of talent will mean finding ways to anchor nomads to society and the economy as a whole, not just the tax system.
Moving the digital nomad from the margins to the mainstream may benefit a growing range of destinations in the post-pandemic world of remote work. However, the hyper-mobility of the nomads is also likely to make this an increasingly competitive market, particularly as more places offer tax breaks as an incentive. The other challenge will be dealing with the anti-system mindset of many nomads. They are on the move because they don’t want to have the trappings of a settled life or be party of mainstream society. Attempts to move them into the mainstream may therefore meet fierce resistance from the digital nomads themselves.