A practical guide for digital nomads

Digital nomads can log in for work from anywhere in the word. The advantage of the digital nomad lifestyle is the ability to work remotely from any location, often with flexible hours that allow you to prioritize travel.

Digital nomads work in diverse fields, from tech to freelance writing, and may be freelancers or employees at companies that allow flexible, remote work. The popularity of this lifestyle is growing as more professionals seek better work-life balance.

Roughly 40 million people globally identify as digital nomads, 4 percent are Canadian, according to statistics from DemandSage, a data analytics group. An estimated 83 percent of digital nomads are entrepreneurs.

If you want to join this growing group of professionals, check out our quick guide on things you should know before you become a digital nomad. We cover key questions on handling work visas, filing taxes and protecting your health, safety and business abroad.

Factors such as length of stay, cost of living in your host country, safety, infrastructure and visa rules can determine where you choose to work as a digital nomad.

Nations with relatively flexible visa terms for how long foreign workers may stay in the country are often ideal. You could opt to mostly consider countries with digital nomad specific visas which may allow for longer stays than tourist visas.

For example, Mexico offers a Temporary Resident Visa that grants remote workers employed or contracted by companies or individuals outside of Mexico temporary residency status for terms of six months to up to four years.  The Iceland long-term visa allows digital nomads who work for companies outside of Iceland to stay in the country for up to 180 days.

Many digital nomad visas have minimum monthly income requirements, which can be a clue about the cost of living in your intended host country. When considering how long to stay, keep in mind that not all digital nomad visas are renewable.

Check out this list of digital nomad visas from 30 countries.

This content is not intended to replace professional tax guidance. Ensure you seek advice from your tax advisor regarding any tax questions.

Your Canadian residency status significantly factors into how you will be taxed as a digital nomad. “ Before becoming a digital nomad, you first need to decide if you’ll maintain your Canadian residency ties,” writes Nerd Wallet. “Your choice directly impacts your tax obligation and how you’ll file your tax returns.”

If you plan on spending more than 183 days in Canada within any tax year and/or have significant ties to Canada, such as property, you will most likely be considered a resident, according to the Canadian Revenue Agency. If you maintain residency, you will be required to complete a Canadian tax return that reports your worldwide income.

To reduce the amount in Canadian taxes you must pay on foreign earned income, you could consider applying for a foreign tax credit, the Canadian Revenue Agency advises.

You also should factor into your budget paying income tax to your host country. To reduce your tax burden, you could opt to work from countries that don’t have income taxes, such as the Bahamas, or countries that don’t tax your total, worldwide earnings, writes Nerd Wallet.

Purchasing travel insurance is one of the most important steps you should take to protect your health and safety. Travel insurance is essential for digital nomads for innumerable reasons.

For starters, without proof of health insurance, you won’t be eligible to receive a digital nomad visa in many instances. And your provincial or territorial health insurance plan may not fully cover you if you experience a medical emergency abroad. “ It is highly recommended that whenever possible, Canadians purchase private health insurance before departing Canada to ensure adequate coverage,” writes the Government of Canada.

An Allianz Travel Insurance plan with emergency medical treatment and transportation benefits may help you fill coverage gaps abroad. We may reimburse certain non-refundable eligible expenses if you experience a covered medical emergency while travelling.

Thorough research of your destination and staying up to date on travel advisories and reliable news reports is also key. The Government of Canada regularly updates travel advisories regarding health, government unrest, crime, inclement weather and more.

You can also sign up for automatic updates. Being aware of cultural norms, particularly if you are woman or a member of a marginalized group is also an important safety measure. Lonely Planet country guides are a good resource to begin researching your host country’s customs.

The adage safety in numbers holds true. Get to know other expats and digital nomads and stay plugged into expat social media and blogs.

“ For digital nomads, unreliable internet is a career liability,” writes Remote Tribe. “Choosing the right destination could mean the difference between seamless productivity and a stress-induced meltdown.”

A site dedicated to advice for digital nomads, Remote Tribe has a comprehensive guide for the best, worst and mid-tier destinations for reliable internet access.

Consider purchasing travel insurance with baggage coverage to protect yourself against monetary losses if your work equipment is lost, damaged or stolen. An Allianz Travel insurance plan with baggage protection benefits reimburses certain non-refundable expenses if your work equipment or other items are lost, damaged or stolen during your travels.

Factors such as your travel plans, coverage needs, health status and budget may determine what sort of travel insurance coverage may be best for you. Firstly, you should know the benefits travel insurance offers. Allianz Travel Insurance plans can fit a wide range of budgets to meet specific travel needs. Our travel insurance benefits include reimbursement of certain eligible expenses if:

• Your trip is cancelled, delayed or interrupted midway, for a covered reason, such as a diagnosed illness.
• You experience a covered medical emergency and require emergency medical treatment or transportation.
• Personal items such as work equipment and other baggage are lost, damaged, stolen or significantly delayed.

If you will be away from Canada multiple times a year, an annual plan may suit your needs and budget. For one yearly fee, an annual plan provides comprehensive protection for an unlimited number of trips for 365 days. Travellers on a budget can also pay per trip for a medical-only plan.

Living as a digital nomad can be a rewarding experience that allows you to balance work and travel. To make the most of your experience, it’s important to know visa and tax regulations, travel risks in your destination, and to protect yourself with travel insurance.