Digital Nomad Visas: What Employers Must Know

An employee or contractor tells you they are moving to Lisbon, Madrid or Bangkok on a "digital nomad visa". It sounds like a travel plan. For an employer it is also a compliance event. A nomad visa is an immigration permission granted to the worker. It says nothing about who withholds tax on their pay, which country’s social security applies, or whether your company has just created a taxable presence abroad. This guide explains the employer’s side: what the visa does and does not change, the tax-residency and social-security questions it triggers, what a set of government programmes actually require, and a practical checklist.

What a nomad visa is, and what it is not

Government pages describe these programmes in similar terms. Croatia defines a digital nomad as a third-country national who is employed or performs work through communication technology for a company, or their own company, that is not registered in Croatia and does not provide work or services to employers in Croatia. Colombia’s foreign ministry describes its nomad visa as being for remote work or teleworking from Colombia for foreign companies only, as an independent or as an employee. Indonesia’s immigration directorate states that holders may not work for pay from individuals or companies in Indonesia.

Read together, the programmes grant the individual a right to live in the country while working for someone outside it. They do not turn your company into a local employer, and they do not decide any tax or social-security question for you. The visa authority and the tax authority are different bodies applying different laws. That gap is where employer risk sits. It is the same distinction the site draws in work permit vs work visa: permission to be present is one question, and the right to work for a local entity is another.

The host governments themselves keep the questions separate. Spain’s consular guidance for its telework visa asks applicants to prove Social Security compliance, either by registering as self-employed or, for employees whose employer consents to remote work from Spain, by supplying a certificate of coverage under an applicable social-security agreement. Portugal asks for a document attesting the applicant’s fiscal residence. In other words the immigration file already assumes that tax and social security are handled elsewhere.

What a nomad visa does not change for you

Payroll and tax withholding

Your payroll obligations follow the employment relationship and the worker’s tax residence, not the type of visa. A permit to stay for a year may or may not make the person tax resident in the host country, and the answer can differ from the country’s own immigration label. Some programmes also describe tax effects. Costa Rica’s tourism board says nomad programme participants are exempt from income tax, and the Barbados Welcome Stamp programme page says participants will not be liable for Barbados income tax. Those are statements from the programme operators about local tax. They do not tell you what the worker’s home country, or your own, will say. If the arrangement means running pay through the host country while the contract stays elsewhere, read about shadow payroll.

Permanent establishment

A worker who sits in another country and does your work from there can, in some circumstances, give the business a taxable presence in that country. Whether that happens depends on what the person does, whether they can conclude contracts, how long they stay and what the local law and any treaty say. The site’s permanent establishment and remote hiring guide and the permanent establishment risk glossary entry set out the tests. The point for this article is simple: a visa does not remove the risk and does not create it. It only tells you the person is likely to stay long enough for the question to matter.

Social security

Social-security coverage is decided under domestic law and, where one exists, an agreement between countries. A visa for a year-long stay does not decide it. This is covered in its own section below.

Employment law

Working-hours, leave, health and safety and termination rules can follow the place where the work is done. RemoteStaffingWiki’s guidance is to treat any employee who relocates for a long period as someone whose host-country rules you need to check, rather than assuming the home contract governs everything.

The 183-day rule and tax-residency triggers

Two different provisions of the OECD Model Tax Convention are often blended together. Article 4 decides which country an individual is resident in when both claim them. Article 15 allocates the right to tax employment income.

Under Article 4(1), a resident is a person who is liable to tax in a state by reason of domicile, residence, place of management or a similar criterion. Where an individual is a resident of both states, Article 4(2) applies tie-breakers in order: the state where they have a permanent home available; if both, the state with which their personal and economic relations are closer (centre of vital interests); if that cannot be determined, the state of habitual abode; then nationality; and finally mutual agreement between the authorities.

Under Article 15(1), salaries and similar pay derived by a resident of one state are taxable only there unless the employment is exercised in the other state, in which case the other state may tax it. Article 15(2) then provides the familiar exception. The pay is taxable only in the state of residence if all three conditions are met: the recipient is present in the other state for no more than 183 days in aggregate in any twelve-month period commencing or ending in the fiscal year concerned; the pay is made by, or on behalf of, an employer who is not a resident of the other state; and the pay is not borne by a permanent establishment the employer has in the other state.

Three practical points follow for an employer.

• The 183-day test is a treaty rule that applies between countries that have a treaty based on this model, and treaties vary. It is not a universal safe harbour. Many countries also apply their own domestic residence tests, which can make a person tax resident well before 183 days.
• The second condition looks at the employer. A worker on a nomad visa who is paid by a foreign employer may meet it. If you route pay through a local entity or the work is borne by a local branch, it may not. The third condition ties the question back to permanent establishment.
• A long stay can push presence past 183 days in any twelve-month period that starts or ends in the tax year (OECD Art 15(2)). Many of the durations in the table below are a year or longer, so do not assume the 183-day exception applies unless an adviser confirms it.

Some programme operators also state their own presence rules. Colombia’s ministry notes that visa-exempt nationals can enter as remote workers without a visa and stay with an entry permit for 90 days, extendable to a maximum of 180 days continuous or discontinuous in a calendar year, provided the stay does not generate payments from Colombian companies. Treat that as an immigration limit, not a tax conclusion.

Social security: certificates of coverage and EU rules

A nomad visa gives no social-security answer, so the employer needs to check how the home and host systems interact.

Totalization agreements and certificates of coverage

The US Social Security Administration explains that its international agreements, often called totalization agreements, have two main purposes: to eliminate dual Social Security taxation, where a worker from one country working in another would otherwise pay into both systems, and to help workers who divided their careers between countries qualify for benefits. Under what it calls the detached-worker rule, a person temporarily transferred by an employer to work abroad can stay covered by the home system, generally where the assignment is expected to last five years or less. A worker exempt from one country’s contributions under an agreement documents it with a certificate of coverage from the country that continues to cover them, and the employer keeps the certificate on file.

Two cautions apply. First, the SSA describes the detached-worker rule for workers an employer sends abroad on assignment. A worker who relocates for personal reasons and asks to keep working remotely is a different fact pattern, and whether the certificate is available is a question for the issuing agency. Second, the agreements differ by country and the SSA notes that the agreement with Italy does not include a detached-worker rule. Spain’s consular page shows the interaction in practice: an employee whose employer consents to remote work from Spain may submit a certificate of coverage issued under the US-Spain social security agreement as part of the visa application.

EU and EEA workers

Within the EU, the Your Europe portal explains that a posted worker remains covered by the home country’s system if the employer obtains a Portable Document A1 (PD A1) from the home social-security institution. The PD A1 is issued for a maximum of 24 months, and a longer posting needs an extension agreed between the authorities. The portal also states a basic rule for people working in more than one EU country: if at least 25% of the worker’s working time and/or income is earned there (the Your Europe portal’s threshold for the share of the work done in the country of residence), that country’s system applies. These rules are written for postings and multi-country work between EU states. They do not by themselves answer what happens when a non-EU national relocates to an EU country on a nomad visa, so ask the social-security authority which system applies and get the answer in writing. Where the arrangement is a contractor engagement, see the international contractor payments guide and the contractor vs employee entry.

Employee or freelancer: what programmes ask for

Programmes divide into three types, and the type matters to you because it shapes the paperwork the worker will ask you for.

• Employee-focused: the applicant must show an employment relationship with an employer outside the host country. Spain asks for proof of the worker’s seniority in the company (at least 3 months), their income and the company’s explicit permission to work remotely from Spain. Brazil asks for a work or service contract and a declaration that the job can be performed remotely.
• Both employees and freelancers: Estonia accepts an active employment contract with a company registered outside Estonia, a business run through the applicant’s own company registered abroad, or freelance work for clients mostly outside Estonia. Croatia, Portugal, Malaysia and Colombia also accept employees and independent workers.
• Open to location-independent workers generally: Barbados describes its programme as available to anyone whose work is location independent. Thailand’s portal groups digital nomads, remote workers, foreign talent and freelancers under one category.

For an employer, this means a relocating employee will often need a letter or declaration from you, a copy of the contract, payslips or confirmation of salary, and in some cases explicit consent to work from the host country. Decide in advance who signs and what you are willing to confirm. A letter that says the job can be done remotely from any location is different from one that approves the stay for a stated period, and neither should promise tax or immigration outcomes you do not control.

Programme comparison: income, duration and who qualifies

The table summarises twelve programmes from the official government or consular pages listed in Sources, as published on 31 October 2026. Thresholds and fees change often, and several are tied to a statutory reference amount that moves each year. Always confirm the current figure on the official page before relying on it. There are dozens of programmes worldwide; the table lists twelve for which an official government or consular page is cited.

How to read the table

• Income thresholds that are multiples of a statutory amount (Portugal, Croatia, Colombia, Italy) move when the underlying minimum wage or salary figure changes, so the euro or dollar equivalent will change from year to year.
• Durations of a year or more are long enough to raise the tax-residency and permanent establishment questions covered above.
• A few programmes restrict who the worker can serve. Colombia’s page limits the visa to work for foreign companies, Croatia’s definition excludes work for Croatian employers, and Spain caps work for Spanish companies at 20% of the activity. A worker on one of these visas who takes on a local client or a local employer has probably left the programme’s terms.

If your team is already hiring in some of these places, the site’s country guides show the local employment picture for Portugal, Mexico, Costa Rica and Malaysia.

Options when a worker wants to relocate

You are not obliged to say yes. RemoteStaffingWiki’s guidance is to treat a request to relocate as a decision with several possible outcomes rather than a yes or no.

• Approve with limits: allow the worker to stay for a set period, keep the contract and payroll in the home country, and confirm in writing that the arrangement is temporary and subject to review. This depends on the tax and social-security checks above.
• Approve and hire locally: if the stay is expected to be long, consider whether the worker should be employed in the host country, for example through an employer of record or a local entity. The comparison of employer of record and contractor models explains the differences.
• Change the engagement: some businesses convert the relationship to a contractor agreement. This carries misclassification risk and is not a way to avoid obligations; read the contractor guide linked above first.
• Decline: if the location has hard-to-manage tax, security or working-time issues, a refusal with reasons is a legitimate answer. Put it in writing.

Employer checklist for a nomad-visa request

This is RemoteStaffingWiki’s own checklist, not an official requirement. Use it as a starting point and add items your adviser identifies.

• Written policy: have a short remote-work-from-abroad policy covering eligibility, the maximum period, who approves, and what happens if the worker moves without permission.
• Approval: record who approved the request, the dates, the country, and the conditions. Keep the worker’s visa terms on file.
• Tax and social security: obtain advice on the worker’s tax residence, your withholding duties and any certificate of coverage before the move, not after. Ask whether shadow payroll is needed.
• Permanent establishment: ask whether the worker’s role (sales, contract signing, managing local staff) creates exposure and how long the stay will last.
• Equipment and data location: decide who owns the laptop and where it will be used, how data is protected, and whether any data-transfer or export rules apply in the host country.
• Insurance: check whether your business insurance and any workers’ compensation or health cover apply abroad. Several programmes require the worker to hold their own health insurance (Costa Rica states a minimum of USD 50,000 of coverage; Croatia and Colombia also require cover), so confirm who pays.
• Working-hours law of the host country: check rules on working time, rest and public holidays that may apply where the work is done.
• Health and safety duty: remember that you may still owe a duty of care to a remote employee, including for the workspace they use.
• Time zones and availability: agree core hours before the move. The time zone overlap tool shows how much working time two locations share.
• Exit: agree what happens when the visa ends or the worker wants to extend.

Common mistakes

• Treating the visa as proof that everything is lawful. It proves permission to stay and, in some cases, to work for foreign clients. It proves nothing about tax or social security.
• Signing a letter without reading what it confirms. Some programmes ask the employer to attest to the worker’s remote status and income; make sure the letter is accurate and does not promise outcomes.
• Waiting until after the move. Certificates of coverage and tax advice are simpler to arrange beforehand.
• Assuming the worker can take local clients. Several programmes bar work for local employers or limit it.

Sources

OECD, Model Tax Convention on Income and on Capital: Condensed Version 2017, Articles 4 and 15: OECD condensed model (PDF)

US Social Security Administration, International Programs, Totalization agreements: https://www.ssa.gov/international/agreements_overview.html

European Union, Your Europe: Social security cover when you live or work in another EU country; Posted workers abroad on short assignments

Spain, Ministry of Foreign Affairs consular page (Washington), Telework (digital nomad) visa: exteriores.gob.es

Portugal, national visa portal, Temporary stay: vistos.mne.gov.pt; AIMA, remote professional activity residence authorisation: aima.gov.pt

Estonia, e-Residency programme, Digital nomad visa: e-resident.gov.ee/nomadvisa

Croatia, Ministry of the Interior, Temporary stay of digital nomads: mup.gov.hr

Italy, Consulate General in Paris and Embassy in Dublin, visa for digital nomads and remote workers: consparigi.esteri.it; ambdublino.esteri.it

Thailand, e-Visa portal, Destination Thailand Visa (DTV): thaievisa.go.th

Malaysia, MDEC, DE Rantau Nomad Pass FAQ (version 11): mdec.my (PDF)

Indonesia, Directorate General of Immigration, E33G visa: imigrasi.go.id; official eVisa FAQ: evisa.imigrasi.go.id

Colombia, Ministry of Foreign Affairs, Visa types (Nomad digital): cancilleria.gov.co

Brazil, Consulate General in Boston, VITEM XIV: gov.br

Costa Rica Tourism Board, Digital nomads: visitcostarica.com/digital-nomads

Barbados Welcome Stamp programme page (Visit Barbados): barbadoswelcomestamp.bb

RemoteStaffingWiki (internal): Permanent establishment and remote hiring, Permanent establishment risk, Employer of record, International contractor payments, Time zone overlap.

References checked on 31 October 2026