Is being a digital nomad legal in Thailand? – that will be the topic of today’s article.
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Introduction
Digital nomads are people who use telecommunication technology to make a living and lead a nomadic lifestyle. This kind of employees usually works remotely, like from foreign countries, public libraries, coworking spaces or cafes. This is often achieved through the use of devices with wireless Internet access, such as smartphones or mobile hotspots. Successful digital nomads often have the need to develop high levels of self-confidence and self-discipline.
The digital nomad uses online (or “digital”) tools to work from anywhere. This kind of work is also called “location independent”.
Digital nomads are people who use wireless digital technology to carry out their work duties and are generally nomadic. These workers usually work remotely – from home, in cafes, public libraries, and even from recreational vehicles – to accomplish tasks and goals that would normally be accomplished in a single stationary workplace.
The digital nomad community has organized various events to host its members. The most popular types of digital nomads are:
- retirees or semi-retirees,
- independently wealthy people or entrepreneurs,
- remote workers (most often younger ones).
People usually want to become a digital nomad for different reasons, and the first one can be the desire to be financially independent and locationally independent. During that time when digital nomads enjoy the advantages of freedom and flexibility, they see one biggest problem – called loneliness, which can consequently cause other problems.
Lifestyle also comes with other challenges such as securing international health insurance with global coverage, complying with various local laws, obtaining work visas and paying taxes in accordance with local and local laws.
Who are digital nomads?
Digital nomads can be:
- Freelancers who write, code, teach, run social media campaigns, and more for their clients online.
- Professionals who provide online / remote services including legal assistance, accounting or even consulting.
- Entrepreneurs who manage their team with online tools
- Employees who work remotely in a more traditional company
- People who create and sell digital products like e-books, manuals, online subscription services, etc.
Digital nomads mostly are young people and they are usually working in industries such as marketing, design, information technology, writing, media, tutoring, or consulting. According to a 2020 study by MBO Partners, there are 10.9 million digital nomads in the US alone, with an additional 19 million Americans reporting that they are considering a digital nomad lifestyle.
Digital nomads can be either remote workers or knowledge process outsourcing workers. While most homeworkers and freelancers are technically digital nomads, the term is most often used to describe people living or traveling abroad or inland while working. Some digital nomads have a wide range of clients and make a living by combining jobs, while others enter into formal or semi-formal agreements with clients that guarantee a certain amount of work or paid time.
Digital nomads are often people who want freedom and flexibility in their job choices and travel times. Digital nomads often live a minimal existence rich in experience rather than physical objects. They get the opportunity to explore new cultures, leaving temporary roots in many places each year. The digital nomad lifestyle isn’t for everyone. If you can’t make enough money on the road, you may find yourself broke with no money to return home.
You may have to work unconventionally and manipulate multiple clients. Digital nomads must have reliable internet access and work and meet deadlines across time zones. Many digital nomads separate the feeling of loneliness, with no family or close friends in the city, and it can be difficult to establish long-term relationships. It can be expensive to purchase travel medical insurance, and even though health care in some countries is cheaper than in the United States.
Pros:
- Freedom from the traditional office environment
- Chance to travel and learn about new cultures
- Time to do some outdoor hobbies like surfing
- More control over your time
Cons:
- Traveling regularly can be expensive
- You may need to work with clients across multiple time zones
- Loneliness or isolation from family and friends
- Must be highly organized for maximum balance between life and work on the road
What destinations are most popular among digital nomads?
Several destinations are some of the most popular destinations for digital nomads, including Chiang Mai – Thailand, Lisbon – Portugal, Medellin – Colombia, and Mexico City – Mexico.
Bali – Indonesia, is a great example of a popular destination due to its low cost and reasonably high quality of life. For example, the city of Ubud in Bali became popular with digital nomads after installing fiber-optic connections to access the Internet. There is also a petition for a digital nomad visa to the Indonesian government, signed by over 2,000 people and led by social media advisor Olumide Gbenro.
Another popular choice among digital nomads is Cyprus: a European nation with low taxes, fast company formation and beautiful scenery, the island of Cyprus has a growing nomad community.
Other cities include Tallinn, Tarifa, Bansko, and Tbilisi due to the critical mass and wider acceptance of the digital nomad lifestyle, as well as the relatively lower cost of living. For digital nomads, there are cities with a higher cost of living, including Singapore and Oslo. Other notable movements loosely associated with the rise in popularity of digital nomads include Vandwelling.
Due to the popularity for people, there are opportunities to live in the area as digital nomads to facilitate this. Popular cities in the United Kingdom include Bristol, Birmingham and Brighton. And all this is happening due to the reduced cost of living compared to London. Organizations such as Innovation Birmingham exist to house 90 technology companies.
Many digital prefer Thailand for their adventurous lifetime. Except for all the mentioned, one question will arouse, is being a digital nomad legal in Thailand or in any other country. Let’s discuss this question below and try to understand every point.
Is it legal to be a digital nomad?
Living a life with the freedom to travel the world and work as digital nomads right from your laptop is too good to be true. The first impression is that there is something suspicious behind this.
Some can say it is illegal and some can insist on its 100% legal. Before we dive into why it’s legal or illegal to be a digital nomad and debunk the myths you’ve heard about them, let’s see what kind of definitions people give to being a digital nomad.
Many digital nomads tend to come from more developed countries with passports allowing a greater degree of freedom of movement. As a result, many seek to travel on a tourist visa. While it is technically illegal for digital nomads to work in the country on a tourist visa, many digital nomads tend to live in lower cost of living places, working online on different projects abroad in another country.
In most countries, as long as a nomad behaves discreetly and does not take work from a local, the authorities turn a blind eye to the work of nomads. In the digital nomad community, it is not uncommon to be without a visa. Some nomads also tried to legalize their stay by taking part-time jobs, teaching English, and attending university courses in their country.
In addition, digital nomads often use their status as perpetual travelers to avoid tax liabilities in their home countries without immigrating to another country’s tax system. However, this practice is considered controversial among digital nomads.
This has led to the creation of several programs targeted at digital nomads, such as e-residency in Estonia and the SMART visa program in Thailand. Estonia also announced plans for a digital nomad visa following a growing number of e-residency applications. Other countries such as Bermuda, Barbados, Georgia and Croatia have begun offering similar digital visa programs for nomads.
Some digital nomads have used residence permits in Germany for the purpose of freelancing or self-employment to legalize their stay, but successful candidates must have a real connection and reason to stay in Germany.
Tourist visas and digital nomads
Many countries understand this very clearly when you apply for a tourist visa – it does not give you the right to work, it just gives you the right to come and visit on vacation.
It is quite true that the tourist visa was developed by most places even before the advent of the Internet. It is also true that millions of real tourists will check their emails or chat with the office while on vacation.
This, according to some digital nomad gurus, turns tourist visa work into a so called gray zone and it’s only “technically illegal”. They are wrong. Being a digital nomad with a tourist visa is illegal.
However, this does not mean that you will be held accountable for checking your email or receiving calls at work. Countries have taken a very simple approach to the small amount of work done with tourist visas – they pretend they don’t.
Any written exemption that allows tourists to do a reasonable amount of work would be open to exploitation by those looking to immigrate illegally. It would be a work visa with a back door.
Unfortunately, digital nomads don’t do tiny businesses – they work in the countries they visit. If you need a tourist visa, you are almost certainly working illegally.
It probably doesn’t matter if you’re restrained. The only digital nomads we know of who were prosecuted for working on a tourist visa were wrong all this time. Local residents gave them to work because they continued to brag about the money they earned while doing it.
You can lie in the pool and relax if you figure out how to be a digital nomad, even if you are “illegal”.
Do not tell anyone and no one will ever know that you are working on a tourist visa at all. And whatever you do, don’t declare your digital nomad status to the immigration office when traveling on a tourist visa – say you’re a tourist.
All we know that this gives some people discomfort, but it is much less inconvenient than being denied entry into the country and then deporting or arresting as an illegal alien.
However, you should be aware that even if you are working illegally, you may still be eligible to pay tax on your income in the country in which you are a tourist. In most countries, you are eligible for taxation if you reside in the country for more than X days a year, and this is usually, but not always, 180 days out of 365.
Digital nomads in Thailand
Over the past few years, you can notice a huge increase in the number of so-called digital nomads in Thailand. Countries around the world are now beginning to see the benefits of accepting digital nomads and have begun offering special visas specifically designed to attract them.
Estonia, Barbados, and Dubai have introduced special visas or programs specially designed for this purpose. The same cannot be said about Asian countries, including Thailand. This is relatively surprising considering Thailand is often touted as the best destination for digital nomads, especially Chiang Mai. Koh Phangan is another popular destination that is becoming more and more attractive for its high quality of life and beautiful beaches.
Thailand Smart Visa
While a digital nomad visa would be a welcome option for those looking to come to Thailand, there hasn’t been a single Asian country that could follow Estonia’s lead. As a result, many freelancers are turning to short-term tourist visas as a way to live and work in Thailand. While this may seem like a simple alternative, there is one major drawback: tourist visas do not allow the holder to work.
Although there is no immediate solution to the problem, there is a light at the end of the tunnel. In December 2020, the Thailand Covid-19 Management Center approved a proposal from the Investment Board of Thailand (BOI) that will allow freelancers and digital nomads to work in Thailand for up to four years under the pre-existing Smart Visa program. The proposal is currently awaiting approval from the Thai Cabinet and has not yet entered into force.
The Smart visa was originally introduced in 2018 to “enhance Thailand’s attractiveness by attracting science and technology experts, senior executives, investors and start-ups.” Currently, just over 500 applicants have successfully applied for and received a Smart Visa. However, if the proposal from the BOI is legal, there will likely be a large increase in applications.
Should digital nomads pay taxes in Thailand?
In Thailand, you are considered a “resident” if you are in the country for more than 180 days in any tax year. Residents of Thailand must pay tax on income from income in Thailand, as well as income that is transferred to the country from foreign sources.
However, even if you are not a resident of Thailand, that is, you stay in Thailand for less than 180 days a year, you are still required to pay tax, but only on income received in Thailand. Please note that the first THB 150,000 is tax deductible.
In fact, it is very difficult for the Thai authorities to get taxes paid as most digital nomads live here on tourist or short-term visas. This is because they do not need to register their business or activities with anyone in the country, so it is almost impossible to track down people who owe taxes. However, it is important to note that this is a very dubious and gray legal area.
The possible introduction of the above amendments to the smart visa should create a basis for paying taxes and other issues, but so far there has been no official information on this matter.
What options are currently available for digital nomads seeking legal status in Thailand?
One of the easiest ways for a digital nomad to gain legal status in Thailand is to start a company. However, starting a company is not an ideal solution for digital nomads as the requirements for starting a company are high (2 million baht paid up capital) and a minimum of 4 Thai employees are required to obtain a work permit.
A dealership can be used as an alternative as there are fewer initial requirements, but there are more favorable work permit options, meaning you can get a work permit for the first two years before paying the full investment. There is also a reduced share of only 1 Thai employee per foreigner required to obtain a work permit. Representative offices have several disadvantages, firstly, the scope of their activities is limited, and they cannot generate income. Second, it is mandatory to have a head office outside of Thailand (Hong Kong or Singapore is a popular choice for a head office that is then used for invoicing customers).
Another potential option is the use of Contractor-for-Employment Management. These companies will be able to accept you and provide you with a work permit and visa. However, they will charge you for this convenience by charging you a fee from your monthly salary. The service fee is usually around 15,000/20,000 baht per month.
Or a different solution that has become popular lately is to take advantage of the current smart visa type S. Smart S is an initial 6-month visa (renewable up to 2 years), which is for foreigners who are planning to start a startup. companies in Thailand or engage in promotional activities for startups or startups. This visa is a popular choice as it does not require a work permit to set up and work with a startup. Holders of this visa can also participate in approved startup promotion activities.
However, in order to obtain this visa, applicants must have a plan for setting up a technology startup in Thailand, which must be approved by relevant agencies such as the National Innovation Agency. Alternatively, they should participate in activities aimed at promoting startups, or in activities like Startup Camp approved by government agencies such as the Investment Council and the National Innovation Agency.
It is highly recommended that digital nomads register with news sources related to digital nomad visas in Thailand.
The main pros and cons of being a digital nomad in Thailand?
To sum everything up, let’s see what can be the advantages and disadvantages of this kind of “illegal” activity in Thailand.
Pros:
- High quality and affordable lifestyle. Being a digital nomad empowers you to work from anywhere in the world. This means that you can choose any location that offers you the best quality of life. Thailand is the obvious choice as it has a lot of affordable food and drink, excellent healthcare, infrastructure and many amazing places to find.
- Finance goes even further – Thailand offers an attractive lifestyle that allows people to lead quality lives for a fraction of the cost of their living at home. Usually digital nomads from more developed countries like America, Canada, Europe, etc. These countries have a much higher cost of living than Thailand, which means your money goes much further.
- Legal Accommodation Options for Digital Nomads – There are several options available for those looking to settle in Thailand for a longer period. These options include setting up a dealership, using HR, and obtaining an Smart visa.
Cons:
- Legal gray area. While there are several options for digital nomads to legally live and work in Thailand, creating them is often costly and / or hassle-free. As a result, very few people take advantage of these opportunities and work in secret or say nothing. The chances of being caught are slim, but of course, doing this is illegal.
- Taxes – Living and working in any country requires you to pay taxes. However, as the legal status of digital nomads is questionable, this is a difficult area to fight.
- Security. As a digital nomad, you will not be contributing to the social security system and therefore will not have access to free public health care in Thailand. As a result, you have to rely on expensive private insurance.
Cons:
- Legal gray area. While there are several options for digital nomads to legally live and work in Thailand, creating them is often costly and / or hassle-free. As a result, very few people take advantage of these opportunities and work in secret or say nothing. The chances of being caught are slim, but of course, doing this is illegal.
- Taxes – Living and working in any country requires you to pay taxes. However, as the legal status of digital nomads is questionable, this is a difficult area to fight.
- Security. As a digital nomad, you will not be contributing to the social security system and therefore will not have access to free public health care in Thailand. As a result, you have to rely on expensive private insurance.
