In the summer of 2018, I was given the chance to write, as a contract freelancer, from anywhere in Europe I wanted to call home. And, so, I set about a task that increasing numbers of Americans are undertaking these days: looking for a country that would accept me not just as a long-term resident, but as a legal remote worker. That’s not actually as simple as it might sound.
While just about every country the world over is willing to provide you with a tourist visa that lets you hang around for a few months, not all countries will give you permission to live and work within their borders if you don’t have a job offer from a local employer. Others will give you a long-term residence visa that lets you legally live in the country, but they won’t allow you to work.
For some of us, the “working legally” part is important, too—and not just to fund our cost of living. See, by earning an income locally and by paying into the local tax system, you’re eligible to access a network of local services, such as healthcare for free or at minimal cost, and you can take advantage of certain U.S. tax breaks, facts that I will return to in a bit.
So it is, then, that the holy grail for those of us who want to move overseas but still need an income is finding a country where living and working come together. Which brings us to the genesis of this month’s cover story: the best places to consider if your plans in 2021 include finally pursuing that dream of relocating abroad to live and work.
One of the knock-on effects of the COVID crisis is that a small but growing number of countries around the world have begun wooing travelers with digital nomad visas. I’m sure you’ve seen some of those stories in recent months; places such as Barbados, Estonia, the Cayman Islands, and others that are now competing to lure remote workers with special visas allowing them to live and work locally for some period of time.
And so, numerous such places exist where you can obtain the paperwork to live and work. That said, not all are great choices since some require greater effort than others. Those special remote worker and digital nomad visas, for instance, are certainly splashy and headline-grabbing, but most only allow you to live in-country for a limited amount of time.
Bermuda and Estonia, for instance, each allow you to live locally on their special visa for just one year, after which you must scram. Some are a bit pricey to pursue. The one-year Barbados Welcome Stamp, for instance, costs $2,000 ($3,000, if you’re a family). And still others impose steep income requirements. In the Cayman Islands, you’ll need $100,000 a year in proven income to apply for the new visa ($150,000 as a couple, or $180,000 as a family with one or more children).
As such, it’s my belief that many of these specialized remote worker visas are simply opportunistic ploys.
So, where might you consider looking instead? Read on…
What to Know Before You Decide to Go
Before we jump into the recommended countries, let’s address several 40,000-foot-view topics.
First, the pursuit of residence visas and work permits is a hot issue in the wake of the COVID-19 pandemic. As the crisis unfolded, Americans increasingly began seeking information on countries to which they might consider moving, particularly Canada, New Zealand, and Mexico. At the same time, lockdowns saw a rash of companies allow employees to work from home, and as I predicted would happen in the early days of the pandemic, companies realized that work-fromhome employees are equally or more productive than most initially imagined.
Just as important, employees realized they relished the freedom they had in better balancing their work and family lives. The result: a work-from-home/work-from-wherever arrangement has taken root as a viable form of modern employment, and workers are now uprooting their lives and moving to places where they want to live, rather than working in places they have to be. For some, that means moving from urban America to small-town America. For others, it means leaving U.S. shores for a life overseas.
Second, you don’t need a second passport or citizenship in some particular country to pursue a life abroad. People often mistake that as a mandatory requirement, and generally because they see stories like the recent one on former Google CEO Eric Schmidt, who spent a few million dollars buying citizenship and a passport for himself and his family in Cyprus, an EU member state (meaning the passport gives him the right to live anywhere in Europe he pleases). Long-term residence visas and work permits are not dependent on obtaining local citizenship or a local passport.
Third, this is not a digital nomad issue, it’s an issue of setting down roots. In many countries, one could easily live on a tourist visa and work as a freelancer and the local authorities wouldn’t know or, really, care. You’d just have to pop across the border every three months to reset your tourist visa for another 90-day stay. However, other places aren’t as simple as that. In Europe’s Schengen Area (a common travel area spanning 26 countries), for instance, you can live as a tourist for 90 days in every 180-day period. Thus, you can’t just pop over to a non-Schengen country to quickly reset your visa. You must remain outside the zone for the next 90 days. If your aim is settling into a normal life—meaning not hopscotching around as a digital nomad— living and working as a freelancer in most of Europe without a residence visa is pointless. And since most residence visas demand you prove a source of income, you’ll need to obtain a work visa or work permit as well.
Finally, the matter of healthcare. One of the principle benefits of obtaining a residence visa and work permit is access to the national healthcare system, for free, just as if you were a local. In many parts of the world, particularly Europe, that means high-quality medical care without having to shell out barrels of money on insurance premiums, deductibles, and co-pays. This isn’t the case universally, as there are some countries where you’re much better off paying for a private health insurance policy. Still, even there you’ll need to prove you have residence before you can buy coverage (and your costs will still be radically less than you’re accustomed to in the U.S.).
With those issues out of the way, let’s move on to the four countries where you will find easy access to a residence visa and the permits that allow you to work. First up…
If your goal is to live and work remotely overseas, but remain close to U.S. borders, Panama is your best bet. Direct flights land in Panama City from at least nine U.S. cities and take between three and seven hours, depending on where you’re coming from.
Beyond proximity, Panama offers what it calls the Panama Friendly Nations Visa, a special program whereby nationals of certain countries (including the U.S. and Canada) can apply for permanent residence, which comes with a Panamanian cédula, the local ID card. That cédula is permanent, meaning that once you have one, you can come and go as you please, as would a born-and-bred Panamanian. Separately, the program also allows you to request a work permit through the Ministry of Labor, though that’s part of a different process.
But know this: Changes are afoot that will likely make obtaining the Friendly Nations Visa more challenging.
When those changes will come into effect is unknown at the moment, “but if Panama is where you’re interested in living, acting now is the best advice,” says Rainelda Mata-Kelly, a Panamanian immigration attorney I’ve known for several years.
Fortunately, the process is quick, if you have Panama in your sights.
Obtaining a temporary cédula takes about eight days. You need another two days to obtain a multiple-entry visa that’s necessary so you can come and go as you wait out the roughly five-month process for the government to issue a permanent cédula. Once you have your cédula, you can apply for a work permit from the Ministry of Labor, which will take about a month.
To start the cédula process, you’ll need basic documents—passport, proof from the FBI you have no criminal record—and $5,000 in a Panamanian bank account, plus $2,000 for each dependent. And if you want the work permit, then you’ll need to set up a Panamanian corporation (which you can disband after a year, if you wish). In theory, the corporation needs to show $10,000 in capital, but Rainelda told me that immigration authorities “are not asking to prove that right now. But that’s one of the rules the government is looking at, and I expect we will see the capital requirement go to $40,000 or higher” with whatever changes occur to this visa program.
Tom Reissmann pursued a Friendly Nations Visa in 2017 when he and his girlfriend left Calgary, Canada, to make a new life in Boquete, a cloud-forested valley in the mountains near the Costa Rican border. The 45-year-old freelance videographer looked at various countries, from Mexico down through Central America, and concluded that “Panama just made the most sense” in terms of process ease. “Mexico was looking quite tricky,” as were a couple other options. “But Panama was a straight-forward, simple process.”
One of Tom’s primary concerns “was having legal residence somewhere. I wanted to be part of the system, not out of the system,” because that has tax implications.
As an American, for instance, if you can prove tax residence in another country, you’re eligible for several meaningful tax breaks. Proof generally means meeting the “physical presence test,” or living outside the U.S. for at least 330 days in a 12-month period. If you meet the test, this is what you gain:
1: Foreign Earned Income Exclusion. This allows you to exclude up to $108,700 in income from your personal income in 2021. Note: This is “earned” income, not passive income from Social Security, pension plans, investments, and the like. Moreover, if you’re a tied to a company), you will still owe self-employment taxes.
2: Foreign tax credits. Whatever taxes you pay to the local government you can generally deduct from the taxes you owe Uncle Sam, dollar for dollar.
3: Foreign housing cost exclusion. You’re eligible to exclude from your 2021 taxes as much as $15,218 in overseas housing costs.
Those are meaningful tax breaks that can improve your standard of living or allow you to ramp up your retirement savings by reducing what the IRS demands from your global income.
Locally, Panama operates a territorial tax system. That means you must report all income to Panama, but income you earn outside the country is not taxed. Again, that can be advantageous to those who want to amplify their lifestyle or ramp up contributions to their nest egg.
If you choose Panama, it’s a legal requirement that you have a lawyer represent you in your immigration process. All in, then, you can expect to pay about $5,000 for all the paperwork and applications that are necessary for obtaining a Friendly Nations Visa. That’s a hefty sum, but unlike many digital nomad visas, a Friendly Nations Visa allows you to live and work from Panama permanently, so it’s money better spent.
One caveat to keep in mind: Don’t choose Panama if your ultimate goal is to obtain citizenship and a second passport. Panama doesn’t recognize dual citizenship, so you’d have to renounce your current citizenship.
If speed is more important to you, then Uruguay is your choice. Here, you can land at the airport with the correct collection of documents, and if you already have a pre-scheduled filing date with the immigration office that day, you can file your paperwork and have a temporary cédula that afternoon or the next day. All that’s required is a birth certificate and an apostilled police record (meaning it has been authenticated and is acceptable across international borders). You also need to show you have the financial means to support yourself with a provable stream of income from anywhere in the world.
With your temporary cédula, “you can stay indefinitely, come and go as you wish, and you can work at any job with no restrictions, just as if you were Uruguayan,” Juan Fischer told me. I’ve known Juan for nearly a decade now. He’s one of the leading lawyers in Montevideo, and he’s who I will be using to pursue my own Uruguayan residence as soon as closed borders reopen again.
With a temporary cédula, you will also have immediate access to the state healthcare system, or you can immediately buy access with a local, private healthcare plan, which will cost about $70 to $350 a month, depending on the bell and whistles you want. Almost all of the American expats I’ve talked to in Uruguay over the years have opted for private cover, and they all report that the healthcare system is high-quality. In a non-COVID year, permanent residence generally requires six to eight months to process.
Karen Higgs was offered a job in Montevideo 20 years ago and moved from Washington, D.C., “because Uruguay fit my lifestyle and it seemed like an ideal place—and it was,” she recently told me. Today, she runs Guru’Guay, a website that provides all manner of information and travel guides to tourists and immigrants to Uruguay. She says that “overwhelmingly, people from the U.S. are contacting me” about immigration to Uruguay, and she happily tells them that “the quality of life is great here. I’m living in a capital city with lots of stuff to do. But it’s also a small city, so you can get around easily. I have lovely beaches one hour away and world-class beaches three hours away.”
When she moved here, she managed the paperwork process herself “but I always kept missing deadlines, or forgetting to do something and then the certification I’d gotten was no longer valid and I had to start over. So, I always recommend that, unless you love bureaucracy and keeping track of deadlines, hire a lawyer.”
If you manage the process yourself, expect to pay about $600 to $700. Just be sure you’re comfortable operating in Spanish, since none of the paperwork is in English, and that you’re OK dealing with the necessary bureaucracy. Otherwise, hire an attorney. It will be quicker and more efficient and will cost between $1,000 and $2,000.
On the tax front, Uruguay is similar to Panama in that it operates a territorial tax system. If ultimately you decide you want to seek citizenship and a Uruguayan passport—ranked No. 17 in the world and currently one spot ahead of a U.S. passport—you can apply after five years if you’re single and after just three years if you’re married.
Europe is loaded with a variety of options for people who want to live and work overseas. For instance, Estonia—a lovely, moody, Old World country on the bleeding edge of technology. It was the first to offer a visa aimed specifically at digital nomads, though that visa requires a minimum monthly income of €3,504 (roughly $4,250), it expires after just one year, and it isn’t renewable. Georgia, a beautiful, mountainous country in the Caucasus, offers an affordable, one-year digital nomad visa as well.
Greece, too, is getting in on the action. The country has announced a new tax law that halves a remote worker’s tax rate for seven years, a great incentive for those who want to live on a Greek island and have extra income to pad an underwhelming nest egg.
Aside from those, Germany, the Netherlands, France, Italy, Spain, and several others offer a visa that allows you to live and legally earn an income. These aren’t specifically digital nomad or remote worker visas. Instead, they’re traditional residence visas and work permits. The benefit is that they’re easily renewable. And among those that exist, a Portuguese visa is at the top in terms of cost, speed of approval, and income requirements, which helps explain why “many more people are contacting me now because the COVID virus has given them time to think, and most are telling me that they want to live in a place where they feel safer and where, if they get sick, the healthcare is really good and they won’t have to pay a lot for it,” says Gilda Pereira, partner at Ei! Assessoria Migratória, a migration agency in Lisbon.
Portugal has two visas that would apply to someone wanting to live and work on the Iberian Peninsula: D2 and D7. Technically, the D2 is for independent workers and entrepreneurs, while the D7 is for those who are retired or earning passive income. In practical terms, the D7 will make sense for most people, even if you’re not retired, “because you can base it on income,” Gilda told me. That’s because the D2 requires that you prove you can support yourself as a freelancer, and then begin issuing Portuguese invoices on which your business will be taxed, though the tax rate is fixed at 20% for 10 years.
With the D7, instead, you’ll only need to show that you have €8,000 (about $9,700) per person in a Portuguese bank account. You’ll also need to show you have the equivalent of €30,000 ($36,400) in a bank account back in your home country. “You won’t find that written in the law anywhere,” Gilda told me, “but it is our experience dealing with immigration authorities that they want to see this before they’ll process the application.”
When Athina Kallel moved to Lisbon in May 2019 from San Diego, she opted for the D7 because “the savings requirement was reasonable and easy to meet.” She chose Portugal for numerous reasons: cultural warmth, costs, and the ease of the visa process. But healthcare was also high on her list because she’s a cancer survivor, and Portugal has one of the most highly rated healthcare systems in the world. Better yet, its cost to citizens is minimal. Athina was paying nearly $1,300 a month for health insurance in San Diego. As a Portuguese resident, she pays $1,400 a year, and that’s only because of a technicality that required a private policy tied to her cancer care.
“I really worried about ‘what if you go broke and can’t afford healthcare,’” says Athina. Under the D2 or the D7, you gain immediate access to the Portuguese health system, “and you can’t put a price on that peace of mind.”
To apply for either a D2 or D7 visa, you have to enroll in the Portuguese tax system and become a tax resident. That requires obtaining a Portuguese tax number before you can even apply for a visa. And for that, you will need a sponsor, which can be a law office, accounting office, or migration office.
For that reason, you’ll need to hire a pro to walk you through the process and be your sponsor for the tax number. All in, that will cost you between €1,000 and €2,500 (about $1,200 to $3,000). The process will require two to four months to complete.
As an expat freelancer, you’ll also want to apply for Non-Habitual Resident status, or NHR, which is issued to people who’ve never lived in Portugal before and move to the country. With NHR status, income earned outside the country is exempt from taxes. You have to file a Portuguese tax return and declare the income, though you’ll owe no taxes on it. The other benefit of this is that it shows Uncle Sam you’re a tax resident of another country, which then helps trigger your eligibility for the Foreign Earned Income Exclusion.
You can apply for Portuguese citizenship and a passport after five years of residence, though you have to demonstrate sufficient knowledge of the Portuguese language.
When I began researching places to live in Europe back in the summer of 2018, I quickly settled on the Czech Republic for personal reasons: I wanted four seasons, I wanted Old World Europe, I wanted former Soviet Bloc, and I wanted to be in the center of the continent to easily access other countries by train.
And though this is entirely a personal assertion, it has proven to be a wonderful choice. Prague is a fabulous city with reasonable costs, culture everywhere, a food scene I like, an excellent mass transit system, and a cityscape that always leaves me awed.
I also liked the ease of the process for becoming a resident and a freelance worker. I had all my documents in just over two months. It’s a two-step process. First step: apply to join the živnostensky (zivno) list. This isn’t specifically for foreigners. It’s a trade license for any Czech resident who works independently, be that a plumber, masseuse, artist, or whoever. That will take a week at most. Zivno in hand, you can then apply for a one-year, temporary residence visa.
This is where it gets a bit chicken-and-egg. You must apply for a residence visa at a Czech embassy outside of the Czech Republic, but you will have to show you have housing (a notarized lease agreement) for the full-length of the visa you seek, up to one year. That means you’ll need to visit the Czech Republic to arrange that. Many people I know (and I’m one) move to Prague, obtain their housing and zivno, then take the train to nearby embassies in Berlin, Vienna, or Bratislava and complete their application.
“That’s the best way to do it— come here as a tourist,” says Tereza Matějovská, the visa expert I used at 4expats.cz in Prague. “But there are some documents you have to bring from home first.”
You need a signed letter from your bank stating that you have the equivalent of 125,000 Czech crowns on deposit (about $5,700). That will need to be translated into Czech, which a visa agency can handle for you. Be sure the account has a debit card, and that you bring that card to your application meeting at the Czech embassy, because officials will want to see it—it’s proof you can access the account.
You also need an FBI criminal background check, though as an American you can also go to the U.S. embassy in Prague and sign an affidavit attesting to your criminal-free background. Along with your passport and an application form, that’s pretty much all the documents you need.
In theory, you can undertake this process yourself, or have a Czech-speaking friend help you. But if you’re on your own and don’t understand Czech, good luck. Better to hire a local agency. That should cost you less than 15,000 crowns (about $685) for everything. The embassy fee is a separate 5,000 crowns (about $230).
Once your temporary visa expires after a year, you can easily trade it for a renewable, two-year long-term residence visa. After five years as a legal resident, you can apply for Czech citizenship and a Czech passport, which like the Portuguese passport, is an EU passport and thus gives you free rein to live and work anywhere in the EU.
The Wrap Up
It’s clear that an increasing number of Americans want a different life and are looking for countries where they can live and work legally. Alas, from someone who writes about this all the time, I can tell you that the options are limited if you don’t have a local employer willing to hire you.
But the dream isn’t impossible. Various countries want you and will certainly welcome you with the appropriate visas. But in terms of cost, ease, and timing, these four stand out. Now the only question is: Do you want a European or Latin American lifestyle?