The Freedom Lifestyle
Digital nomads, remote workers, or someone who is location independent all have one thing in common – freedom. The blog posts, Instagrams and webinars lead by “gurus” all promising one thing – freedom. They flood you with images of “far-away places,” lazing away on a beach with the idea that you can do whatever and go wherever you want – whenever you want. All because you’re no longer tied to a “9 to 5.”
The idea is, once you have your coveted online business and start making money, you can just pack up and go. While some of that is true, what they often don’t tell you is how this “life of freedom” requires a fair bit of dependency. This freedom starts with dependency.
The world isn’t built for digital nomads just yet. Depending on where you’re from, you’ll either have to deal with a little bit or a shit load of bureaucracy.
What to Expect
For example, if you’re an EU citizen who plans on living and working in various countries within the EU (long or short term), you fall on the very little bit of bureaucracy side of nonsense to deal with. Perhaps some banking and residency things, but that’s about it.
If you’re someone with a “weaker passport” (many South-East Asian Countries, most African countries, Middle Eastern countries… you get the idea) you fall on the side of dealing with a ridiculous amount of bureaucracy. You’ll need to prove exactly where you’ll be staying, how you’ll be getting from place to place, and if you have enough money to do so. All of this, sometimes just for a tourist visa.
Living this life of travel and ‘freedom’ have varying difficulties. Regardless of where you’re from, the world still isn’t built for digital nomads.
The Dependency Begins
When starting out your new freedom lifestyle, there are many things to consider.
Do I need health insurance?
- How do I get that if I’m not staying in one place or through an employer?
- What if I work for myself – would that be something different?
- What if I’m a freelancer but not really registered – what do I use?
- Will I still have health insurance when I’m home?
- Do I really need health insurance?
This answer is different for everyone. As a Canadian, if I’m in my province (not even just the country) for less than 183 days of the year, I’m deregistered from my provincial health insurance. Once I come back and stay for a certain amount of time, I can get back on it. The number of people that actually contact their provincial offices to inform them that they’re leaving for a long time so they get removed is likely few and far between.
While I think you should get health insurance while you’re travelling, the kind you get would vary a lot on your personal circumstances. If you’re only making a small amount each month – dishing out lots of money on travel insurance may not seem feasible.
I’ll be honest; I don’t always get health insurance. Particularly if the country I’m going to has a reasonable health care system. That way, if I do get sick, simply paying the hospital fees would be cheaper than the health insurance. But for those that like that piece of mind, and intend on doing a lot of travel to different countries, I would suggest World Nomads Insurance. If travel is a major part of your business and freelance lifestyle, it’ll also likely be tax deductible.
The Tax Conundrum
Speaking of taxes, this is one of the most confusing parts of the travel/digital nomad lifestyle. If you’re in a foreign country, working on a work visa, and paying taxes in that country, you’re often set up through an employer that will help you with this. If your home country has a tax treaty with this country, even better, you shouldn’t be double taxed.
However, if you’re working and travelling but not on a working visa, like many digital nomads – this is where things get complicated. Many people work online while travelling for 3 to 6 months on a tourist visa. This becomes a very strange grey area because yes, you are physically in that country and working; but you’re not registered as an employee in that country. So in a way, you’re an undocumented worker, but at the same time you’re not taking jobs away from the native population or utilising public services (i.e. EI, unions, etc.) You’re working in a virtual no man’s land, so to speak.
At the same time, while a citizen of your home country, if you’re gone for a long time, you may not be a resident of that country anymore (for tax purposes).
So what do you do? Just not pay taxes?
This is a particularly complicated issue if you have clients and need to charge them fees + taxes. Do you charge them the taxes of your home country, of the country you’re in, of the country they’re in, or no taxes at all?
If you have a registered business, it may be a little easier, as you will have to pay some kind of taxes based on where your business is registered. But as a freelancer, just starting out, not sure if you want to do this long term it is unlikely that you have a registered business.
Perhaps you’ve just started your blog, or offered your design services a couple of time, or only had a client or two. Taxes are complicated issues regardless of your situation.
The forms themselves are confusing enough when you have a regular job, but living abroad unsure of how to define your situation makes it all a bit of a clusterfuck.
Permanent Address? Nope.
One of the most frustrating aspects as a digital nomad is this concept of a permanent address and phone number. Even when filling out basic forms or ordering something online, they always want an address and a phone number.
Forgot your password? Well, let me text you a code! Something that isn’t particularly helpful when you’ve changed your phone number in each country you’ve lived in over the past few years.
When filling out forms at a border or applying for a visa or any basic formalities there is always an address box that must be completed. While I wouldn’t refer to myself as homeless, I don’t have a home either – certainly not a permanent one. So on paper, I live with my parents.
Homeless, but not homeless.
As you become more established there are some ways around this. If you have a registered business address (even just a P.O. Box) that’ll often do. But some forms require street addresses. If you’d rather not use a friend or family member’s address, there are services that are essentially an online mailbox. For a fee, the company gives you a street address that mail can come to. This mail is then forwarded to you. You can also have it scanned or shredded. This is a great option for business owners and helping with legitimacy.
This oh so important permanent address is also key when banking. While there are many ways to be paid for your services (Paypal, Payoneer, Stripe, direct deposit) – some are more beneficial than others. While Paypal is great, they can have high service fees or may freeze your funds. Direct deposit is good too, but many don’t like giving out their bank info.
When choosing your credit card your bank may also play a role (and require a permanent address). Banks and credit cards are also not set up for digital nomads. Multiple currencies, employers or clients in different countries, irregular payments, all can cause a bit of a hassle. A similar hassle as taxes. Plus, international transaction fees can be killer. Make sure you look around to find the best card for you. Whether that is low fees, higher points, or widely accepted – take your time when looking over options.
Freedom starts with Dependency
All of these hassles are something everyone has to deal with at some point. Even for those not living this lifestyle will still need to deal with taxes, health care, and banking. The difference is all these issues are more straightforward at home than abroad.
Despite this lifestyle giving you more choice and freedom, dependency comes with it. The idea that you can live a totally free life is more idealistic than realistic – particularly when starting out, but you can still do it.
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