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In recent years, the concept of digital nomadism has developed into an attractive alternative to the traditional office job. More and more people are choosing to work location-independent and travel the world while earning their living online. The advantages are obvious: more freedom, flexible working hours, and the opportunity to live in the most beautiful places in the world. However, this lifestyle also brings challenges. In this article, we take a look at the most important benefits, as well as the aspects that one should definitely consider before taking the step into the world of digital nomads.
What is a digital nomad?
A digital nomad is a person who works location-independently while using modern technologies such as the internet. They usually earn their living through digital professions and combine work with travel. Instead of working at a fixed workplace, they often operate from changing locations—for example in cafés, coworking spaces, or vacation rentals.
Advantages
The main advantages of a digital nomad lifestyle are freedom, flexibility, and new experiences. Here are the most important benefits:
Location independence
Working from wherever you want – beach, mountains, or an exciting city. Furthermore, there is no daily commute to the office or fixed workstation required. This provides enormous freedom and autonomy.
2. Flexible working hours
You can not only decide where you work, but also when. Thus, there are no more early morning meetings. You can structure your day in the way that suits you best.
3. More travel & adventure
The flexibility makes it very easy to travel, be spontaneous, and experience more adventure than with a normal office job. You also don't need to request vacation time, you just take it.
4. Cost savings
Life is significantly cheaper in most countries than in Germany or Austria. Countries like Bali, Thailand, Vietnam, Mexico, and many others offer a high quality of life on a small budget. Consequently, you combine low local costs with a good international income and benefit from so-called geo-arbitrage.
Especially in combination with Travel Hacking, you can save a lot of money and travel a lot.
5. Better work-life balance
Work-life balance is an increasingly important aspect for people, especially in Generation Z and Millennials. Quality of life goes hand in hand not only with income, but also with freedom and self-determination. This is very high among digital nomads.
6. Personal Growth
Personal growth is very high when traveling because you encounter a wide variety of situations that you have to solve. In addition, you get to know new cultures and languages.
7. No bureaucracy & company politics
There is no more stress with superiors or colleagues in the office. You can decide for yourself about clients, projects, and partners.
8. Working in inspiring environments
Coworking spaces worldwide offer networking opportunities. Creative work in a pleasant environment
How to Become a Digital Nomad – A Guide
Below are the most important points to become a digital nomad. It is important to know or clarify these in advance to be able to enjoy a stress-free nomad life.
Log out
One of the most important points is the correct Log out at the registration office. After that, you should be able to prove that you left the country within 30 days. Ideally, you deregister around the beginning of the year so that you only have to file a tax return for the year for a few days. Anyone who stays in Germany or Austria longer than May 31st must also pay taxes for the entire year.
At the same time, one must also give up access to an apartment. Either by terminating the lease, subletting, or selling the property. Because having access to an apartment can also be considered a residence and thus a tax domicile.
Job / Income
Another essential point is the job or income. This should be agreed upon accordingly with the employer or the company one manages, or be compatible. Ideally, you start your own business after moving abroad and then invoice the work performed as services.
If you are looking for new jobs, you can offer your services on Upwork, Fiverr, or Freelance.com.
This is suitable where Formation of a US LLC is the best option. Although it is a corporation for liability purposes, it is treated as a partnership for tax purposes, and the company’s income is therefore subject to income tax. For digital nomads, however, this tax rate is 0 %. In addition, there is no requirement to maintain accounting records or prepare annual financial statements.
Taxes
A primary motive for emigrating or perpetual traveling as a digital nomad is taxes. These can be avoided through continuous travel or the lack of establishing residency in any single country. It is important to note that one should not stay in any country for longer than 183 days, as it would otherwise be considered a place of residence.
Furthermore, as described above, one should not have an address or access to a place of residence (control of keys) in their home country.
To ensure that you remain tax-free as an independent traveler, founding an LLC in the USA, as described above, is also worthwhile. All further income from capital gains, dividends, or trading is not taxed and can be deposited directly into your private account.
Bank account
In the digital age, a bank account and a credit or debit card are necessary. It is recommended to open an account with Wise, Revolut, or N26 even before departure. Existing accounts with traditional banks can, of course, be kept and do not necessarily have to be closed.
In many respects, the best credit card for traveling is the American Express credit card. According to the terms and conditions, this theoretically has to be canceled when moving or relocating, but in practice, this is rarely actually checked or enforced.
To be legally capable of doing business, you naturally also need a business account. There are fintech solutions for US LLCs for this as well.
Particularly popular with digital nomads, of course, is also the Opening a bank account in Georgia.
Insurances
For safe travel, it is highly recommended to have a international health and accident insurance to conclude. Most of these are surprisingly affordable for many, especially when compared to mandatory state insurances. For a few hundred EUR per month, you can enjoy high insurance coverage all over the world.
Personal recommendations for providers here include April, Passport Card, Foyer, and in particular Fine.
The most important points to emigrate successfully and free yourself from the system.
Optimize taxes, gain freedom and increase quality of life.
Summary
Life as a digital nomad offers numerous benefits and opportunities for personal growth, as well as freedom. In addition, one can cleverly and legally avoid taxes and build up a financial cushion.
With a little planning and attention to the most important basic legal rules, you can thus enjoy a very (tax-)free life and fulfill your potential.
