Barbados introduces plan to allow visitors to work remotely there for a year
money.yahoo.comThis is really interesting - I wonder if, in our post-COVID world, we'll see other countries doing the same.
I'm trying to see any disadvantages for countries that do this, but the only thing I came up with is the possibility of distorting local rental prices. But presumably if enough countries offered such a visa, applicants would be spread over those countries, causing less distortion.
The disadvantage is that you may become a burden on the host country - you cost more in public services than you bring in revenue.
This could happen if the host country supplies plentiful public services funded mainly by income taxes rather than consumption taxes. Or simply if you lost your job and turned to begging or crime, and the host country finds it expensive or politically difficult to deport you.
These are pretty niche cases and most countries are happy to take wealthy, self-sufficient immigrants. But there are valid reasons why you might not want too open an immigration policy.
even countries with lots of publicly funded services usually exclude tourists. For example, a visitor to Canada would either not be allowed to take advantage of many services (ex: Employmnet Insurance / Welfare) or get billed (Healthcare) although it would be unlikely to be refused service in the later if you could not pay. In countries like Barbados the divide between citizens and visitors is even more stark. Deportation from these countries is usually easy and fast to countries that have resources (like the US or Canada); it's deporting from western countries back to poorer or "democratically challenged" countries that is hard and takes forever. Anyone who wants to turn to crime would be better served to stay at home and do it (I'd rather deal with the Canadian criminal system as a citizen than Barbados as a foreigner).
Something to keep in mind regarding Canadian health care, if you’re an American up here with no travel insurance: it is still very affordable. I suspect surgeries and things like that would be expensive, but routine procedures are very very affordable.
As an example, I moved and forgot to renew my health card. I fell in the yard and sprained my wrist. Head to a clinic, they warn me that I have to pay for the visit, but I can send the receipt to SaskHealth to get reimbursed for it when I renew my card. See the doctor, he wants to do x-rays. Go to the place next door for digital x-rays, come back, and see the doctor again. He confirms it’s just a sprain and nothing broken. Awesome. Head to the counter on my way out to pay, expecting to be out a good chunk of cash for a while. $60 total for the visit and the x-rays.
I'm sure there is a means test + some proof of your job to get the stamp, which probably dramatically limits the the odds that someone is going to become destitute and turn to a life of crime in some foreign land.
> funded mainly by income taxes rather than consumption taxes.
Why would you not pay income taxes in barbados though?
Many countries have laws so that if you are a resident there you also pay taxes there. They may also have agreements with other countries in order to avoid double taxation. But I'm fairly certain that barring any weird legal setup living in a country for a year means you pay the income taxes (at least) in that particular country.
I don't think you would pay tax in this scenario, as essentially this is just a longer-term tourist visa. You won't be allowed to get a job locally and are expected to work remote. There's no way they could track (and tax) this; it's really no different than doing some work on your 2-week Mexico vacation. Also Americans pay tax based on citizenship too.
I don't know about tax laws on Barbados, but usually you need to pay income tax in a country where you spend more than half of a year. Just the fact that you rent a flat for a year is enough for an revenue authority to start an investigation.
> it's really no different than doing some work on your 2-week Mexico vacation.
Does 1 yr make a difference? Or would it still be considered "vacation".
Maybe no tax, buy visa costs 10k a year which you write off as business expense in your work country.
> essentially this is just a longer-term tourist visa
As always the devil's in the details. A 2 week vacation will incur far fewer expenses on the host state and its citizens than a 1 year stay, while probably bringing in more money. A tourist stays at hotels, rents cars, dishes out for all the tourist attractions and baubles, eats out every meal, etc. Very little competition with locals for the same resources. A quasi-local is a different story, competing from a privileged position with locals on everything but jobs. So while both visas are time limited there's no real comparison between them. The profiles of the two types of stay are very different.
The fiscal residence usually revolves around the centre of vital interests or the habitual abode. Both would be the place you live in rather than the place your employer lives.
I don't know what the details of the implementation are but I'm guessing that if this type of setup catches up it's unlikely it will always be treated as tourist-like without making life worse for the less well off residents.
I would love to work remotely from Europe. I would think it would be in the interest of European countries to make this kind of arrangement because I would be spending my cushy US salary on European goods and services and not taking a job away from a European.
Many countries have a minimum salary limit which qualifies you (and potentially your family) to live there. For example, last I looked into it several years ago, Spain's minimum salary for a remote working visa was USD $36,000.
That's awesome. Didn't know that was even a thing.
Spain is the country I wanted to move to anyway, which Brexit destroyed my hopes of.
For anyone else that finds this potentially interesting, this seems useful:
https://balcellsgroup.com/work-remotely-from-spain/
https://balcellsgroup.com/non-lucrative-residency/
(note that they're just the first links showing up in DDG, so there might be better ones around)
That's really cool. Do you have to pay income taxes in Spain if you do that?
Yes, I would think so.
The US is the only country I know of that demands income taxes from its citizens when they are non-resident. Citizens of most countries would expect to pay local income taxes only when they emigrate.
Although it is important to remember that any tax one would have to pay to US IRS is for the difference between what a foreign country and US would charge, if former charged less. This only applies to countries with which US signed a treaty for the avoidance of double taxation.
I'll note Canada has a similar treaty with the US and this applied to me while working / living there for a number of years.
They wanted to tax me on my "worldwide" income and requested that I pay the difference between what I was making in the US vs. what I would be paying in Canada had I been living there.
It wasn't something I had considered in my planning so good to look into before you go!
Interesting - from this and a couple of other comments I can see my idea that you just had to pay US income tax regardless was over-simplified and wrong.
It's still a little weird to me though, as someone who would expect my own country to relinquish all tax demands if I'm not actually there!
This shouldn't just be for the remotely employed. We need to do more decouple freedom of movement from employment by a company.
Perhaps there should be something like this: An International Creative or Digital Visa that countries can sign onto.
This proposal is a good start for what it should be: http://artsvisa.org/ireland/
Have something to contribute. Be able to support yourself. Don't compete for an in country job and any country should welcome your residence/citizenship.
There's no reason something like this doesn't exist in a global digital age.
> Have something to contribute. Be able to support yourself. Don't compete for an in country job and any country should welcome your residence/citizenship.
I think agree with this, but I'm not sure what this looks like apart from "remote employment". How do you not compete for an in-country job without being employed remotely? Even if you're a self-employed plumber, for example, you're still competing for a job in your host country (your presence increases the supply of plumbing services without the corresponding increase in demand).
If you design and sell tshirts globally on the internet or freelance copy edit for clients in and out of country or exhibit and sell your art internationally these are all sorts of things that are not in competition with local employment but currently have limited movement and residency options. They're not pure examples but I think they work for what people are typically concerned with when it comes to immigration and residency.
Fair enough, I was categorizing that as “working remotely”, but I see your point.
I’d be curious to hear from the people who downvoted me though.
Being wealthy or just having enough in savings to not have to work for a while seems the obvious alternative.
I had the same idea 10 years ago and I'm still here after marrying one of the natives. But be warned, working remotely in Europe can be difficult. I'm 7 hours ahead of my coworkers in America, so my workday is roughly 1pm to 9pm, with continual slack messages coming in until midnight at times.
Yeah, I’ve considered that as well and it seems to be the biggest downside as well. In my case, my wife and I would be on the same schedule so there wouldn’t be so much impedance there, but it would make weeknight get-together a with friends more difficult. However there should still be weekends and vacation time and so on. I’m at least confident that my employer would be flexible about me shifting my working hours to something closer to noon-8PM and respecting that schedule.
Seems your company isn’t really distributed if it requires synchronised availability.
There are some rumors that indicate the Canary Islands will set up some remote worker deal. It'd be great as they have low tax, great weather and nice infrastructure including really nice Internet.
I’ve recently started looking into moving to Azores. Seems not as hot as Canary Islands and more green, almost like New Zealand.
It’s location is almost perfect for Americans and real estate seems cheap too. Even with cushy developer salary NZ real estate cost is way too burdensome.
Are their taxes not the same as rest of Spain?
Nope. They're outside of the EU VAT territory, so those rates differ, at least.
I worked remotely from Europe for about two months last year, and spent a few weeks in Spain. I just got a travel visa. It didn't even occur to me that it would be an issue. I think they're more worried about you overstaying your visa than working on your laptop. Just make sure you have a return ticket, or a train ticket out of every country you visit. I got grilled by the immigration guy in Ireland because I bought a flight to Dublin last minute and didn't have a flight back out. I'm not suggesting anyone knowingly break the law, just sharing my experience. Nobody gives a shit what you're doing on your laptop at Starbucks.
My concern was regarding staying for longer than permitted by a travel visa, nor that people would object to me working in a Starbucks.
Ah, yeah that's a different story if you want to stay long term.
Sounds like a net lose for countries that offer extensive social programs and healthcare depending on how the income tax works.
And raising local prices. I saw this happen over the years in some areas of Canada when they became more popular destinations for the US tourists. The result is not good for the majority of local folks.
Maybe, but the cost of living in Europe is already considerably higher than in the US (barring of course the popular but disingenuous comparisons between SF/NYC and rural Europe). I'm not an economist, but I wouldn't expect an influx of Americans to drive up the cost of anything except perhaps real estate. Moreover, I wouldn't expect a significant influx of Americans period--relocating to Europe would only be for the intersection of the very privileged, those interested in Europe, and those who have the flexibility to make the move. I'm sure there's some threshold at which too many people are visiting and it's causing problems; however, I'm only arguing that the current state is suboptimal for everyone (although someone else has pointed out that it may be easier to work remotely in Europe than I'm aware of).
> Maybe, but the cost of living in Europe is already considerably higher than in the US (barring of course the popular but disingenuous comparisons between SF/NYC and rural Europe).
Living costs in Europe are incredibly uneven, like they are in the states. Denmark is much more expensive than next door Netherlands, for example, which is actually quite reasonable (and perhaps Americans might even find it cheap outside of Amsterdam).
It does vary a lot, but it’s still more expensive on average than the US. https://www.numbeo.com/cost-of-living/country_result.jsp?cou...
Note that they say cost of living excluding rent is 8% higher but that rents are lower—I don’t think their rent analysis is by area but rather by number of bedrooms. Typically rent per sq foot/meter/etc is much cheaper in the US than in European countries, and I would wager that it’s the same with Netherlands specifically.
> cushy US salary
Wouldn't this be tax fraud to claim an address in US as your paycheck address and not actually live there?
> Wouldn't this be tax fraud to claim an address in US as your paycheck address and not actually live there?
It might be other forms of fraud, but not sure how you come to the conclusion it’s tax fraud. The US government doesn’t care where you live, as long as you are a citizen, you have to file and pay taxes owed (which admittedly, might not be as high as they normally would be if a resident under some circumstances). It doesn’t matter if you haven’t lived in the US for decades and work for a foreign company, unless you renounce your citizenship, the IRS wants their claws in it.
How is that tax fraud? You pay federal taxes anywhere in the world you live as an American citizen.
ok i work 100% remote, can I claim my sisters address in Texas in texas for my payroll and actaully live in new york?
I am genuinely curious. This will save me tens and thousands of dollars every year if this isn't fraud.
why the downvotes, i don't get it.
> ok i work 100% remote, can I claim my sisters address in Texas in texas for my payroll and actaully live in new york?
That’s an entirely different issue. Yes, New York state will likely take issue with the scenario you describe, but not at the federal level (what this thread is about). Further nobody, but you, was indicating lying about their address.
> That’s an entirely different issue.
how is it different?
OP is claiming an address in USA for payroll as his residence but it isn't actually his residence. How is this not fraud.
Reread their post again, there is no mention of lying about their address to their employer. Based on your other comments, it seems you assume that all employers wouldn’t maintain a salary if someone moves, which isn’t true (yes, it’s common for employers to adjust salaries for that reason, but it’s not an automatic given).
Really shocked by this. I had no idea there are employers who doesn't adjust your salary from US salary if you move to an entirely different country.
all the examples i know of like gitlab, mozilla ect adjust it to local country comp.
anyone know if such an employer actually exists in US?
> anyone know if such an employer actually exists in US?
Yes. I’ve personally seen it happen multiple times at different employers, each with unique factors.
There are way to many factors at play here to make broad assumptions that no employer does it...
- first and foremost, Covid changed everything when it comes to remote salary norms
- Duration of move (some employers would be more lenient for 6-12mo vs permanent move)
- level of seniority (which correlates somewhat with how hard it is to replace said employee if employer says no)
- how long as the employee worked for employer (another factor in how much it impacts employer if employee moves anyway and goes to work for another company)
- how bad the employer wants to retain said employee (Multiple previous emplayers, big and small, have made exceptions for specific coworkers)
- it’s important enough to mention again, Covid changed everything.
> There are way to many factors at play here to make broad assumptions that no employer does it...
Yes you can make broad assumptions that almost no hr, payroll, legal dept of any company is setup to deal with taxes, labor laws ect across hundreds of different countries.
Yes exceptions exist.
> - it’s important enough to mention again, Covid changed everything.
No it didn't. Do you have even a single example of an employer thats allowing ppl work longterm from whichever country they please due to covid?
> Do you have even a single example of an employer thats allowing ppl work longterm from whichever country they please due to covid?
Yes, I do, but I’m not doing your research for you. You’ve been extremely combative and flat rude and incredulous this entire thread, so I’m stopping my participation. If you genuinely are in pursuit of knowledge and not to just pick random fights on the Internet, then I implore you to use a different approach.
Sorry I wasn't trying to be rude, yes I agree that my comment were indeed rude. I apologize to you.
I'll try to be better.
I did do my research but I havent found any company that,
1. Lets you move to any country
2. Adjusts your payroll to that country's address.
3. Doesn't adjust your compensation from what you were getting paid in USA.
I do know of some exceptions where people were allowed to move to a country where they already have a home office. One of my coworkers moved to Dublin and my company had a home office in Ireland. Some of my coworkers are also stuck in countries like India due to covid and HR allows them to work from there for now. But it is not any sort of company policy to let ppl work from a random country forever while maintaining their US salaries.
But the claim here is that you can move to any random country like Barbados.
In my case, a company called Pathable based out of Seattle, a company called Optify based out of Seattle, and a company called iCracked based out of San Francisco. I don't know what the heads of their HR departments would say if you asked them, but everyone I worked with was aware of my situation and no one ever questioned it.
I have worked for several small startups in Seattle and the bay area that didn't say anything about me being in Brazil, Thailand, and Belize. In each case I was earning around $120k/yr on salary.
Sure but did you change your payroll address? What was the address on your payroll?
Sorry, I replied to one of your other comments but didn't mention it here: no, I used my mom's address. I had all of my mail sent there, mostly lived in monthly rentals, and renewed my tourist visa whenever it was up. When I did go back to the US I stayed with my mom, and I kept most of my stuff there, so you could make a good faith argument that it was my primary residence (in the US).
I'm pretty sure the only gray area in this arrangement is "working in the US" while staying in another country on a tourist visa, but it's pretty ambiguous. I'm working for a US company and getting direct deposits to a US bank as a US citizen. If I am on a trip to another country and I sign into my company's VPN for a work-related video conference, and maybe fix some bugs, am I working illegally? Maybe, but immigration laws aren't really written with that scenario in mind.
This is a topic that frequently came up in conversations with ex-pats, since once you start doing this you'll end up meeting lots of other remote workers doing the same thing. On the one hand, you are injecting a lot of money from your home country into the local economy, which increases GDP and supports local businesses. On the other, you are using public services without paying taxes to the host country. In practice, you can't use services like universal healthcare or free education without being a legal resident, so it's debatable whether your presence is a net negative for the local economy. It's probably not legal, but like I said, the immigration laws don't take this scenario into account. I was forthright with all of the immigration officials I spoke to and all of them just kind of shrugged their shoulders and renewed my tourist visa anyway. I figured that some countries would start writing new legislation and creating new types of visas to take advantage of this scenario, and we can see this happening now.
If your question is "is this legal", the answer is "it's complicated, but probably not". If you're asking if it's possible to do this long term, the answer is yes, it's not only possible but pretty easy. I was able to do this for almost a decade with no issues whatsoever. I'm glad that some countries are starting to think about this, because I'd much rather live with confidence that my work situation is accounted for than have to wonder if my residence there is dependent on the interpretation of each individual in the immigration department.
Yea i know people who did this undere 'don't ask don't tell' policy. But the parallel comments here are claming that companies in US are setup to do foreign payroll, labor laws which I find really hard to believe.
Oh, I see. I do know that some fully remote startups do this. There was a blog post that made the front page here for a well known company outlining which countries their employees could live in and what the salary bands were. I can't remember who it was though. Maybe gitlab?
Yea that was gitlab ( there are a couple of others like mozilla ect). But they adjust your salary based on your location, like you mentioned.
claim here was that you continue to get 'cushy US salary' no matter which country and you get your payroll to the home address in that country. That sounds really hard to believe to me.
OP is not claiming an address in USA.
citation needed (that OP is claiming a US address as residence).
> cushy US salary
What exactly does this mean. then?
The salary typically paid to a US-based employee. It's a number, not a latitude-longitude coordinate.
> It's a number
What range of numbers qualify as 'cushy US salary'.
This is really absurd to classify range of numbers as 'us salary' , 'indian salary' ect.
If I tell you just two things: Person A is a software engineer making a US salary. Person B is a software engineer making an Indian salary.
Do you have any reasonable suspicion as to which person is making more? I think most people do.
Means a well paid job from a US company. There’s no implication of fraud there.
Lying about your address is tax fraud, but no one is talking about that...
Having a US salary doesn’t imply claiming that I live in the US. It just means my employer continues to pay me my salary which is negotiated based on the US job market. I wouldn’t lie to anyone (my employer, the US government, nor the host government) about where I live.
> I wouldn’t lie to anyone (my employer, the US government, nor the host government) about where I live.
How though? You have to claim a local US address for your payroll though. right? What will that address be?
If I was moving for the long term (whatever the legal requirement is for an address change), then I would report my new address. There is no requirement that a US company can only employ US residents to the best of my knowledge.
> There is no requirement that a US company can only employ US residents to the best of my knowledge.
I understand this, obviously. You seemed to have implied that you would still be paid 'cushy us salary' in ireland, thats what i am talking about. does your current employer still pay you US salary if you live in ireland?
I would love to work for such an employer, i want to move back to my home country and still keep my US salary.
> does your current employer still pay you US salary if you live in ireland?
Yes, but this varies by company, and is predicated on the assumption that the move wouldn’t interfere with my job performance. E.g., I would still work my normal US hours because my job requires some amount of communication with my team.
Most employers, HR and payroll aren't willing to deal with taxes, labor laws ect across different countries.
I am really surprised that some employers are willing to go such great lengths.
Most don't ask questions. In my case I used my mom's address and lived abroad. When you file your taxes and you've been outside of the US for most of the year, you get all of your federal withholding refunded. I'm sure this would not stand up to scrutiny, but I did it for eight years and never had any trouble.
Why would you need to claim a local US address? Previous poster seems to be willing to tell their company "I'm working from XYZ country; send my direct deposits to bank PDQ."
> US salary
ok i read that as 'salary paid to a US resident' , then not sure what 'US salary' means. It would be 'Barbados salary' if they are getting paid in barbados.
I think op meant "salary on the range of the ones paid to US residents" as in working remotely to a US company and getting paid appropriate salary to do so.
Croatia is implementing something like this.
https://www.schengenvisainfo.com/news/pm-plenkovic-croatia-w...
One unintended consequence could be that while a country might get some foreign citizen remote workers, it would decrease the remote working opportunities of their own citizens.I'm trying to see any disadvantages for countries that do thisE.g Spain might think "we'll get Americans to move here and do their U.S jobs" but what they actually get is, for example, Moroccans getting U.S jobs from Spain and more less chances of Spanish citizens getting U.S jobs.
this will become a trend among touristy countries, because the slump in tourism will last for many years (and imho will permanently alter the market)
> Mottley addressed the concern: “In terms of broadband, we have two major telecommunications companies, and at the same time we are looking to see how we can continue to boost our national television station and move it from being a broadcasting entity to digital services.”
Not... the most inspiring, but maybe the internet is good? That would be my biggest worry. It's an absolute must have.
I'd imagine the internet just has to be good enough to have video calls and transfer the occasional large file for 90% of people.
I think life on a Caribbean island would be enough reason to ditch our usual high bandwidth vices like gaming and streaming for just a year.
Some examples:
https://discoverflow.co/barbados/broadband/overview
https://discoverflow.co/barbados/mobile/plans/prepaid
https://www.digicelgroup.com/bb/en/mobile/plans/postpaid-pla...
The real question is how good the backbone is that feeds the country. If large numbers of people move there and start doing video calls, streaming Netflix, etc then it could use a ton of bandwidth.
Barbadian dollar (BBD) is pegged to the USD. BBD 2.00 = USD 1.00.
I lived on an island in Belize for five years while working remotely. I had a 4G dongle that gave me about 100/25 most of the time, good enough for Netflix and video calls. SSH into a server into the states was rough though.
If the latency is good enough for video calls, it’s good enough for gaming.
If it’s broadband of any kind, it can be used for streaming. Even 3-5Mbps is workable for HD, with a bit of upfront buffering.
There are these results which you may or may not choose to trust: https://testmy.net/country/bb
These look good on average, though if you click through to "Fastest Cities", some corners of the country look very slow.
Fibre to the home is available in plenty of locations - off island bandwidth is a bit variable but you can get up to 1000/500 for 300 USD
Georgia just introduced something similar: https://agenda.ge/en/news/2020/2654
You know, it's kinda funny - I am a citizen of both Georgia and the first country on the list of approved countries there, and was thinking about spending a month or two over there since my job went remote only. Yet, due to my ties to Georgia, I can't visit for a few more years, or I'd have to piss away a year in military service.
Oh well, not the best of times to be travelling anyway, and doesn't seem like it's getting better for... a while anyway.
Do they have a health insurance option? That’s a big issue for international travel with the pandemic.
They require to have one.
I do not necessarily personally recommend it but I know Safetywing is a popular choice for nomads and officially covers Covid. Otherwise you can look at either your countries of citizenship or residency that have international health insurance. IMO it makes sense to get an insurance from the country you would like to get repatriate to if you get in a very bad condition.
AFAIK, U.S. imposes income tax on all of its citizens, even those who reside in other countries. IIRC it applies to all earnings above $110k(?). There's also the notoriously difficult hassle of complying with FATCA's [0] reporting requirements.
I would imagine that sours the value proposition quite a bit, at least for U.S. citizens.
[0] https://www.irs.gov/businesses/corporations/foreign-account-...
US citizens can lower their effective tax rates by moving abroad, but it's complicated. Expats can take advantage of the foreign earned income exclusion that you alluded to and are not subject to state taxes. The savings can be quite large - email me for more details.
FACTA is burdensome if you have foreign bank accounts. You can avoid having foreign bank accounts to sidestep those rules.
(not a lawyer or accountant, but know a bit about this)
That depends on the country. Some (I imagine most?) countries have deals with each other when it comes to taxation, to avoid double taxation.
So if you're earning a salary in, say, Israel, then you only have to pay US taxes on money that hasn't already been income-taxed in Israel. Therefore, whether you're paying more taxes than locals depends on whether the tax rate in the country is higher or lower than in the US. If it's higher, then you end up not having to pay anything extra.
That said, these things get tricky and there are lots of individual wrinkles. E.g. freelancers typically have to pay taxes either way here, afaik. Then again, those taxes aren't doing nothing - they're paying for you to have a US social safety net of some sort.
Most countries follow territorial / residence based taxation. People that live in the country are taxed in that country. An Italian that lives in Italy pays tax to Italy. An Italian that lives in the US, pays tax to the US.
A couple of countries have worldwide / citizen taxation (i.e. the US). A US citizen that lives in Singapore will pay tax to both Singapore and the US. They pay tax to Singapore and can claim a tax credit on their US tax return. They can also claim the foreign earned income exclusion deduction.
> A couple of countries have worldwide / citizen taxation (i.e. the US). A US citizen that lives in Singapore will pay tax to both Singapore and the US. They pay tax to Singapore and can claim a tax credit on their US tax return. They can also claim the foreign earned income exclusion deduction.
So it ends up working out like residence-based taxation for most people anyway, but with more steps? Except I guess if the country has a lower tax rate than the US, then you'd need to pay the difference?
I'd actually have assumed they expect these people to still be paid into their US bank accounts in USD (or your EU account in Euros or whatever), and not pay any income tax to Barbados regardless; effectively a year-long vacation visa, not actually a work visa.
Yeah, you won’t really save on taxes. The real benefit is if you want to work from an island and go to the beach a lot. Hurricanes are the main issue on that during this season.
>There's also the notoriously difficult hassle of complying
I would've thought that the hassle came when the American switched to a non-American employer or ran a business outside the US. I would've thought that if the American is getting all his or her income from an American employer the hassle could be mostly avoided (even if he or she is residing outside the US) especially if the American is merely continuing to work a job he or she had while living in the US.
But maybe I am wrong.
"Digital nomad visas" are starting to become more common as countries realise they bring in low impact wealthy online based 'tourists.'
Currently, it's very possible to travel on a 3-6 month basis between countries under tourist visas and to work remotely in a somewhat illegal fashion. These nomad visas are an attempt to capture that market offering legitimacy for a fee.
Unfortunately, Barbados hasn't really hit the sweet spot here. It's possible to exist in Barbados for 6 months purely as a tourist and do the usual remote working gig where you just don't walk up to a tax official and start telling them you're working in an illegal manner. Or, you can now apply for this visa, stay the whole year, be legit, but you have to meet some conditions and hand over 2k USD which is pretty steep.
Yeah seems there needs to be something provided in return. Healthcare probably pays off itself compared to US.
I don't think you're going to save on healthcare with visas like this. You're still required to be fully covered with your own health insurance as one of the visa conditions.
This removes the possibility of you being a burden on their public health system, which is common amongst not just these new 'nomad' visas but also the working holiday visas that have been around for decades.
Maybe. I'm guessing health insurance is still going to be cheaper to buy in any country outside US. A lot of time it's not worth to get insurance at all and just pay out of your pocket (because you aren't ripped off by hospitals).
But going back to point - why would anyone get this permit when they can stay on tourist visa. I guess complacency is one reason.
Pro tip: being lucky and getting away with tax fraud is not the way you want to live in any country. You will eventually get caught.
Does this apply to U.S. passport holders only? If not, what about taxes? If you spend 12 months in Barbados, will you have to pay your taxes there?
As the other poster says you continue to pay income tax in your home country and you're also forbidden from working for any Barbados company since they don't want people taking local jobs.
However this may have tax consequences in your home country. I'm from the UK and if you spend more than 180(?) days abroad in a tax year you become non-resident which has some implications. You'll need to consult an accountant I guess.
I got my visa and I'm hopefully heading out towards the end of September, it should be fun.
> I'm from the UK and if you spend more than 180(?) days abroad in a tax year you become non-resident which has some implications
This isn’t quite accurate. There are other tests that come into play, including whether you own a house in the UK, and how long you spent outside the UK for the rest of the year (and the preceding years).
Basically if you live in the UK, then spend 180 days (or even a whole year) outside the UK but then immediately return HMRC is not going to consider you a non-resident for that period.
It is worth paying for tax advice before you leave because the rules are complicated and there are other factors aside from just not being in the country.
"worth paying for tax advice"
I knew someone who, through their employer, got tax advice from one of the big name accounting firms that turned out to be completely wrong - leaving them liable for tax both in the UK and in the country they had travelled to. It all got sorted out in the end but took a long time and was he was rather unhappy with the whole thing, as you can probably imagine.
Yeah it's also worth doing your research and seeing if it matches what the advisor is telling you
"you owe/doesn't owe this because A, B, C" is the answer you should be looking for, they might give general advice but they might not know 100% about some specific situations
Note: I'm not saying "you can deal with this by yourself", I'm saying "double checking is a good idea"
I had this situation where an employee insisted on tax advice from the company's lawyer. The law firm represents who is paying, same for liability. In the end we sponsored an expensive email basically saying as such.
One thing I have learned through bitter experience is if there is a significant tax issue at stake then get your own lawyer and/or tax adviser.
If you are considered a non resident - does that mean you pay less UK tax or that you need to register in another country?
If you permanently emigrate and then work for a foreign company, why would you pay tax in the UK?
Rules for temporary emigration are more complex, but if you get a job in Germany and move there, returning to the Uk occasionally to see friends and family (say 3 or 4 weeks a year) clearly you don’t need to pay tax in the Uk. Will still have to repay your student loans though - declare your income and pay the bill (which is 9% above an income that varies depending on the country you have loved to)
Ah OK thanks for the clarification. I will definitely consult an accountant once I'm moved and settled.
But there is no real reason for UK to actively track residents and tell them "you know what, we discovered that you should pay your money to another country, not us". What is more reasonable is that the third country would symay "hey buddy maybe you should be paying your taxes here not in UK" but in this case Barbados said they wouldn't
Yep, most people get this rule the wrong way around. The 183 day rule is a sufficient (but not necessary) condition to be considered tax resident in most countries. It does not automatically make you non resident in your home country and if you don't actively communicate to your home country that you moved abroad it all comes down to the existing double taxation agreement between the two countries.
It's also dependent on how long you spend in the UK (not just out) and other things. If you spend half the year abroad, but then come back for 90 days (in a home you own or rent), you're resident again. HMRC have a flowchart you can follow:
https://www.gov.uk/government/publications/rdr3-statutory-re...
Also remember that tax year counts, not calendar!
half a year is still good
Luckily since the tax year ends in February (?) it should be possible to take almost the full year by having it split into 2 half years over the tax year ends without having to change any tax stuff, I don't think the non-resident implications are too bad. I'm just going to sort out the accountancy stuff when I'm out there, but even if it's expensive it's worth it for the experience.
UK tax year for individuals is 6 April-5 April.
Their FAQ says you don’t pay Barbados income tax
It doesn’t mention being only for US citizens, it appears in principle citizens of any country are eligible. (In practice, I imagine some countries’ citizens will find it easier to get approved than others, due to differences in national security risk, likelihood of submitting refugee claims, etc.)
If you're not a US citizen, you won't have to pay income at all due to tax residency rules. only the US is brazen enough to charge non-resident citizens income tax
>> only the US is brazen enough to charge non-resident citizens income tax
Don't forget Hungary, Myanmar, and Eritrea, too!
"Hey, we're doing the same things as Hungary, Myanmar, and Eritrea" is not usually a good argument for anything.
Anyway, the Hungary part surprised me since I'm a Hungarian citizen living abroad and have never been bothered about tax. The Wikipedia table says residents of countries with tax treaties are exempt, and that should be pretty much all of them? The PDF link from Wikipedia is broken, which is normal for how the Hungarian government operates.
Same for my partner who is Hungarian though in her case it was one EU country to another (well it was at the time, won't be soon, bloody brexit).
Since the US has an exemption for foreign income, this seems like making overmuch of a technicality. It reminds me of the histrionics over the US not being officially metric by people from the UK.
Well that's rich, coming from people who can't even stick with one system and have a weird mix of imperial, metric, and various archaic units - which is IMHO worse than just being on imperial.
That description applies to both the US and UK, perhaps others, and it's hard to be unaware when you're connected to a global computer network. Just google "site:uk mpg".
"Put simply, all MPG does is tell you approximately how far your vehicle will travel based upon a single UK gallon, which equates to approximately 4.55 litres of fuel"
This particular thing, I'm aware of because there is perennial confusion over comparing mpg given that Imperial gallons are larger than American ones. If people just used L/100km....
Chauvinists go to ridiculous lengths to magnify small differences.
That's not the mixing I'm talking about. American gallons and imperial gallons being defined differently is rarely an issue since gallons are rarely exchanged between America and the UK (in a relative usage sense). If America happened to call their unit gabbons, this confusion wouldn't exist.
My point is more about how in the UK you might give a measure in one system, but then increasing the measure you might convert into a different system entirely. e.g. If you ask an Englishman how far apart you should stand for social distancing, he might say 2 meters. But if you ask him how far it is from London to Brighton, he might say it is 50 miles.
>gallons are rarely exchanged between America and the UK
I didn't go looking for an example; it's one that I've run into a lot over the years, because people spontaneously ask why, over and over, American cars get much worse MPG than elsewhere. Not realizing the gallons are smaller.
It's the residency rules that matter here.
For an Australia, you pay income tax if you're a resident for taxation purposes. For an Australian Citizen to answer that they're not a resident for taxation purposes is complicated and depends in part on the type of Visa you have.
Last I looked, for me, as an Australian citizen, to not have to pay tax would mean getting a permanent Visa in another country and being resident in that country. They specifically excluded time-limited visas, even if you can get them renewed automatically.
It means travelling around the world, even for years at a time, I still need to account for my income and lodge tax returns in Australia. The one upside is getting credit for income taxes paid in another country.
I believe a similar situation also applies to Canadian citizens, as a few former Canadian colleagues in Australia had to go through a whole process of getting their Australian taxation recognised in Canada.
Do you mean if you pay, say, 20% tax in Switzerland as an Australian, never setting foot in Australia for an income year. Then you lodge tax in Australia and the ATO says you only have tax credits for 20% of your income, meanwhile you'd be paying 32% of your income as tax - you would then have to pay ATO the 12% difference out of pocket?
Do you have any links to information regarding Australian citizens being taxed abroad? I know for HECS, etc you're still meant to lodge and pay those amounts, but didn't realise it might be a fair bit worse than that!
It's complicated, but assuming that the ATO thought you were a resident for taxation purposes, then yes you still lodge a tax return in Australia, claim the tax paid in Switzerland as a credit (assuming it's recognised) and pay whatever gap there is.
It's made more difficult because tax years don't align, so it needs to be worked out that way too. Oh, and because Switzerland probably put their tax records in Swiss-Fench/Swiss-German all your documents would need to be formally translated.
I'd start by checking put the ATO site they had a bunch of tests for your residency there.
>They specifically excluded time-limited visas
Even if the time-limit is years at a time?
Yep. Because you're not a permanent resident of that country.
Wow! that's interesting. That significantly changes my view on the take that "only the US taxes overseas citizens" that I've heard quite a lot.
Other commenters have address your questions, but what I will add is that if you stayed the full 12 months (Or really, 330 days) then you apply for FEIE and won't have to pay federal income tax as a US citizen.
This isn't exactly true. You only get the Foreign Earned Income Exclusion if you actually have foreign earned income. Just can't just live abroad and pretend your income is foreign earned. There IRS defines what is and isn't foreign earned income.
If you move to Barbados and just keep doing the same job you were doing in the US, then it almost certainly isn't foreign earned income.
There is a lot of debate about that, and the best thing is to contact a tax attorney. But a lot of digital nomads in Southeast Asia are working for American clients and getting that income in under the exclusion. I’m not sure if it’s different for full time rather than contracting income.
you spoke fairly authoritatively, then hedged at the end ("almost certainly"). have you read IRS form 2555? that's probably a good place to start, as they spend a fairly large amount of time defining terms.
for all their faults, the IRS has extremely clear definitions and exceptions when it comes to foreign earned income and sequelae. while detailed and nuanced, there aren't really any gray areas that i have found.
That is what the IRS (and most tax offices in the world, such as the British HMRC or the Italian AdE) defines as "foreign source income" since the work is literally being carried out abroad. It also includes capital gains and interests arising abroad of course.
> you apply for FEIE and won't have to pay federal income tax as a US citizen.
The Foreign Earned Income Exclusion only applies to the first $107,600 you earn in 2020. You still have to pay taxes on the rest.
After your foreign earned income exclusion is exhausted, you can deduct your foreign taxes, at least. In low tax but high COL places such as Singapore and HK, you also have the housing deduction to help out.
And you're still liable for social security.
No, you only pay SS if you are resident.
For most situations, you're liable:
https://brighttax.com/blog/do-us-expats-pay-medicare-tax/
https://www.irs.gov/individuals/international-taxpayers/soci...
No, not even close: most expats do not pay social security taxes abroad. If you work for the USA embassy, you pay SS tax, but if you work for Microsoft China, you do not (you do, however, pay Chinese SS of course). In particular, see https://www.hrblock.com/expat-tax-preparation/resource-cente...
> If you are working for a foreign employer who has no requirement to withhold U.S. social security, you have no obligation to remit U.S. social security taxes on your earnings and in fact, are prohibited from making such voluntary contributions to the U.S. Social Security System.
Almost every US company has it setup that you are going to be working for a foreign employer, not a US one.
Really this economically seems similiar to "permanent tourists" if taken to the logical extreme and extended indefinitely, their income source isn't taxed directly, they don't take local jobs, but do use local services. Healthcare is probably one of the most significant differences between transient and "permanent tourist" compared to transit costs. Not being seasonal is almost certainly an advantage unless it aligns with another industry's "off season" and the transit income is likely irrelevant to the host country.
It brings to mind a future organizational hypothetical of a "modularized citizenship" for work vs residence - unlikely as that may be given the tendency of nations to insist that their rules are the only rules and thus international laws are more like guidelines in practice.
Remaining outside the US for more than 12 months may result in a loss of your green card, if you have one.
It only takes 20 hours to go to the other side of the planet, 10 hours if you're in the eurasian continent. More and more young people want to travel and do business in many countries or live a life in different cultures. Lesser people want a picket fence home with 30 years of slavery.
The only thing stopping this is backward legal systems and the bureaucracy around these processes.
I imagine a lot of countries will take advantage of this and reduce bureaucracy in the recovery efforts post covid. Island nations and rapidly developing countries will probably pioneer this and young people from developed countries will probably try to escape their own high cost of living to these nations.
How does taxation work for U.S. companies, assuming they allow this?
It's an independent contractor's dream, maybe. It's unclear what tax issues exist for W2 people.
What’s the usual rent for a family home there?
Looking at https://www.terracaribbean.com/Barbados/For-Rent/ just before it went down (I guess others are interested too) the first six prices for 1-bedroom houses/apartments are US$500, US$600, US$625, US$725, US$800, US$800.
Numbeo has user contributed prices for living all over the world.
https://www.numbeo.com/cost-of-living/country_result.jsp?cou...
This sounds really fun. And a good way to spend a year after such a shit year we have had so far.
well ill be damned. packing my bags as we speak lol
This article from 1998 is about a guy who set up a facility on Barbados where coders from around the world could work (offshore) for his US clients.
https://www.inc.com/magazine/19980101/852.html
I'm shadowbanned, so if anyone who sees it cares to post the link, please do.
Interesting how , in a remote work world, having a passport is a burden . There might be a demand for an "airbnb for passports" in the future
Being able to use someone else's passport....is not now and even more so in the future will never be a thing. But getting passports from more jurisdictions and choosing which to present- that is and will be even more of a thing.
Regarding your second point, there's a couple of dozens of countries that specifically require you to denounce your other citizenship to gain theirs, as well as those whose citizenship is lost automatically if you become a citizen of some other country.
I do see the cases of multiple citizenships (and therefore multiple passports) increasing in the future, but I wouldn't hold my breath for it to become a common occurrence within our lifespans.
Don't disagree. Could even see that exclusivity strengthening, a global movement towards national allegiance and homogeneity. Would be a terrible tragedy.
yeah , but having citizens vet their replacements might convince governments that they can trust to the newcomers.