Digital nomads: opportunities and challenges of a growing phenomenon

A report on a session from the IBA Annual Conference that took place in Toronto on 5 November 2025

Session Co-Chairs

Adekunle Obebe  Bloomfield Law, Lagos

Pulina Whitaker  Jones Day, London

Speakers

Jacqueline Bart  BartLaw, Toronto

Rachel Fox  Al Tamimi & Company, Dubai

Kate Hooper  Migration Policy Institute, Washington, DC

Jelle Kroes  Kroes Advocaten, Amsterdam

Reporter

María Cecilia Calosso  Bruchou & Funes de Rioja, Buenos Aires

Introduction

This panel session offered comprehensive analysis of the burgeoning global trend of digital nomads (DNs) and the complex legal and regulatory challenges they present both for individuals and employers. Spurred by the post-pandemic shift to remote working, the panel reviewed the rapid expansion and highly variable design of DN visa schemes worldwide.

The discussion went beyond the implications regarding the employee’s immigration status, emphasising the intricate web of compliance issues DNs and their employers must navigate. These include crucial matters related to taxation, social security, employment law and corporate presence. The experts on the panel provided a breakdown of the schemes currently available within the European Union, differentiated DN visas from traditional work routes and explored the significant permanent establishment (PE) risks that arise for companies when employees work abroad. Finally, the panel provided insights on the specific immigration policy approach taken by Canada in the hope of attracting DNs.

Panel discussion

The session opened with remarks from Kate Hooper, who provided an overview of the requirements for securing DN visas. She highlighted the rapid expansion of these programmes in recent years, especially following the pandemic. More and more countries have launched dedicated schemes for DNs. As of 2025, there are 49 different DN visas available worldwide, with Estonia introducing the first such programme in 2019.

Hooper emphasised the huge variation in programme design. Key variables include the permitted duration of stay and renewability, the possibility to bring family members, geographic limitations, sector-specific areas of focus and requirements such as minimum income and/or qualifications. While most programmes target short‑term stays, some allow for longer‑term residence. She also noted that securing a DN visa is not the only pathway open for remote workers. For example, in the United Kingdom, visitor visas can in some cases facilitate remote working.

Hooper underscored that an employee’s immigration status is only one piece of the puzzle. Workers and employers must also navigate complex and often confusing rules on taxation and social security, employment and labour laws, corporate presence, worker protections, licensing and permits, and the portability of benefits, among others.

Jelle Kroes then addressed DN visa schemes in the EU. He framed the analysis around several factors: the source of the applicant’s income; the nature of the work (employment versus independent contractor/freelance worker); the absence of a local sponsor requirement, which distinguishes these visas from many traditional work routes; and whether the schemes are intended for short‑ or long‑term stays. Of the EU’s 27 Member States, 11 currently offer DN visas, with three more in the process of adopting them.

Kroes identified common features across the available EU schemes. First, with respect to the nature of the work, most DN visa programmes contemplate salaried employment with a foreign employer, although some also accept independent contractors and owners of foreign businesses. Second, as to the source of work, local employment is generally not permitted. Third, the initial validity of the visa often runs for about one year, with the possibility of renewal in some jurisdictions. These schemes do not confer a permanent immigration status. Fourth, applicants must satisfy specific eligibility criteria, frequently including minimum income thresholds and qualifications. Finally, the applicable visa procedures and processing vary, including whether applications can be filed in‑country or abroad, the expected timelines and government fees and costs.

Kroes concluded by distinguishing DN visas from general immigration programmes. Traditional work routes often hinge on factors such as labour market need, economic benefits, skill levels or talent. By contrast, DN visas are typically designed to attract remote workers to a jurisdiction even though their employment remains with a foreign enterprise.

Rachel Fox then examined the tax considerations for employers in relation to DNs. From an employer’s standpoint, the presence of employees in a foreign country can expose employers to the risk of creating a PE. While the analysis depends on local law and any applicable tax treaty, a PE may arise where there is a fixed place of business that is used to carry out the enterprise’s business (beyond preparatory or auxiliary activities) or where a dependent agent habitually exercises the authority to conclude contracts in the name of the foreign company or negotiates contracts that are concluded without material modifications.

Fox explored whether a DN working from home could create a PE in the host country, potentially triggering compliance and profit attribution obligations. She noted that the flexibility in regard to remote working seen during the Covid‑19 pandemic has largely fallen away as employees have returned to offices, bringing the focus back to ordinary PE rules.

She also outlined certain payroll tax and social security issues that may arise. The relevant thresholds, contribution mechanisms and registration obligations vary significantly by jurisdiction and often require local expertise. Double taxation risks may arise if the home country also taxes the employee’s salary; relief may be available under a double tax treaty, for example through the allocation of credits or refunds.

Classification risks were also discussed. Even when an individual is engaged as an independent contractor, the host country’s rules may deem the relationship to be a form of employment for the purposes of employment rights, benefits and severance.

From the perspective of an individual, Fox highlighted tax residency as a key issue. Tax residency is commonly determined by the number of days of presence and/or ties to a jurisdiction. DNs may become dual tax residents, with implications including potential double taxation, withholding obligations, penalties and, in serious cases, asset freezes for non‑compliance. She also pointed to the expansion of cross‑border transparency regimes and automatic information exchange, including frameworks such as the US Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS), as well as bank account reporting to tax authorities, noting that these considerations are particularly relevant for US persons subject to nationality‑based taxation.

Finally, Jacqueline Bart provided details on the treatment of DNs in Canada. Canada does not offer a dedicated DN visa, but it implemented a DN-friendly policy during the 2021–2022 period that allows visitors to remain in Canada for up to six months; beyond that, additional tax implications may arise. The policy is designed to provide flexibility, including the ability for such visitors to bring family members and to perform certain types of work that would normally require a work permit, provided specified conditions are met. The complexity of such processes increases in scenarios involving independent contractors. The policy does not itself provide a pathway to permanent residence, although permanent residence may be available under general programmes for those who meet specific criteria, such as skilled worker requirements relating to age, education, professional experience and language proficiency. To avoid the displacement of local workers, the Canadian approach generally expects that the DN’s employer is located abroad. Canadian employers engaging foreign nationals to work in Canada typically require appropriate work authorisation. Non‑compliance can result in significant penalties.

Conclusion and final remarks

DN programmes have expanded rapidly during the last years but remain highly heterogeneous. They attract remote workers without conferring permanent residence status. However, immigration is only one piece of the puzzle: employers face PE, payroll, social security and misclassification risks; individuals face obligations in regard to tax residency, double taxation and growing transparency requirements. DN visas are tools for temporary mobility, not substitutes for traditional work routes. This phenomenon is expected to grow, underscoring the need for clear, predictable rules for DNs, employers and other stakeholders.