As an Australian residing in Silicon Beach, I’m a bit of a nerd when it comes to tech visas.
So needless to say, I was excited when Estonia dropped their long-awaited Digital Nomad Visa on July 1st.
In today’s post, I’ll provide a 360-degree review of the new Estonian digital nomad visa program; how it relates to their E-Residency program, how to apply, and more importantly, who should consider it.
Who benefits from the Estonian Digital Nomad Visa?
The primary benefits of the Estonian Digital Nomad Visa are:
- One year of residence in Estonia.
- Three months of travel within the Schengen region.
- Access to the Estonian tech scene.
The primary demerits of the program are:
- After 6 months, you will be taxed as a local business.
- The visa is not a gateway to permanent residence in the EU (although it could be a good base for establishing residence by real estate investment, in Estonia or another EU country).
Estonian Digital Nomad Visa vs Estonian E-Residency Program
Estonian E-Residency is not a physical residency program. E-Residency is designed for businesses that wish to register and bank within the European Union, but without founders, employees, or customers in Estonia.
The Estonian Digital Nomad Visa is the inverse: it is a residency visa which allows anyone to physically reside in Estonia for up to a year, while operating a remote business such as freelancing or consulting, or while working remotely for a foreign company.
Is Estonia the first digital nomad visa?
Estonia and Barbados both announced digital nomad visa programs in summer of 2020, allowing applications to start in August of 2020. I’ll update this post when the programs have officially launched and the first successful applicants have arrived.
It’s no surprise that Estonia would lead the charge on “digital nomad visas.” Estonia has been offering E-Residency since 2014, although some argue the program is more a PR play than a legitimate business draw for the nation.
That criticism hasn’t stopped startups from flocking to Estonia, helping the country grow from a place most people couldn’t point to on a map to one of the top hotspots for international tech startups — with companies like Skype and Transferwise to their name. (Although both companies have since moved to new locations.)
These visas have been discussed for years, as the digital nomad scene has grown and become more mainstream, spawning hundreds of co-working spaces in locations like Thailand and Bali. While some countries have attempted to crack down on digital nomads for abuse of tourist visas, some countries like Estonia see digital nomads as a net benefit, so long as they can be properly tracked and taxed.
Estonia Digital Nomad Visa: Basic Facts
The Digital nomad visa grants foreign nationals the right to live and work in Estonia for up to one year, so long as their business and income meet basic requirements.
This is a big deal for full-time digital nomads, who are accustomed to traveling on tourist visas and paying taxes in their home country, if at all. It’s also a big deal for consultants and small startup founders who don’t quite qualify for traditional entrepreneur *or startup visas* (or don’t want to), but who want a more permanent base than the typical 3-months-at-a-time “visa run” schedule for digital nomads.
Perhaps the most important aspect of the Estonian Digital Nomad Visa is that it sets a precedent for other countries. Estonia’s approach to tech as an economy booster has been lauded by everyone from Silicon Vally elites to Jeb Bush.
The Estonians are doing it right! https://t.co/vADteVnXGY— Jeb Bush (@JebBush) June 5, 2015
If popular, other countries that want to attract tech talent and build vibrant startup scenes are likely to mimic it, which would radically lower the bar to entry for would-be location-independent tech workers.
Who qualifies for the Estonia digital nomad visa?
For Estonia, you can be from any country, so long as you fall into one of three buckets:
- You are a remote employee of a tech company outside Estonia
- You own a digital business (or partner/shareholder) outside Estonia
- You are an online freelancer / independent contractor (with most clients/customers international outside Estonia)
Estonia Digital Nomad Visa Income Requirements
Regardless of qualifying income source, your income must be above €3504/month pre-tax income. (~$4000 USD).
You have to show 6 months of bank statements as part of the application. You also have to have health insurance. Note that if your country is barred from EU during Covid, you cannot enter or participate (Americans have no travel restrictions for the Barbados digital nomad visa, however!).
If you don't meet the income requirements, Estonia has a startup visa that will waive the requirements, so long as your idea is sponsored by an Estonian incubator.
Summary: Estonia’s Digital Programs are Great PR, but Most Digital Nomads Are Better Served Elsewhere
Overall, the Estonian Digital Nomad Visa program is most exciting for the precedent it sets for other countries. I expect a dozen or so countries will follow suit with similar programs over the next five years, similar to how Chile’s wildly successful startup visa program launched 50+ competing programs around the world.
If you’re an early-stage startup founder looking to plant a flag in the EU, this program has a lot to offer. But if your goal is simply to avoid taxes and keep your costs low, other locations in Europe like Georgia are going to be more beneficial.
Estonian Digital Nomad Visa FAQ
Fees and Application Times for Estonian Digital Nomad Visa
The Estonian Digital Nomad Visa comes in two types:
- D-Visa: €100 fee for 1-year stay.
- C-Visa: €80 fee for 6-month stay.
They claim applications will take 15+days. It’s not yet proven how long processing times will take, but it does require visiting a physical embassy near your location. I’ll update this article when reports on processing times start coming in. If you’ve applied, please contact me so that I can share your story here!
Is the Estonian Digital Nomad Visa a gateway to permanent residence?
The Estonian Digital Nomad Visa permits a maximum stay of one year. It is not extendable, and is not a formal gateway to permanent residence or citizenship in Estonia or any other EU country. However, it may prove to be beneficial for those seeking a base in the region while scouting for real estate investment, which can lead to permanent residence in Estonia and many other European countries, if a certain level of investment is met.
Do Digital Nomads pay taxes in Estonia?
Digital nomads will be taxed under the Estonian Digital Nomad Visa after 183 consecutive days. At this point, they are considered a tax resident. However, you can reset this clock by leaving the country for a short period, similar to a visa run. I expect this loophole will be shut down quickly, however, if it becomes an issue for the program — which clearly expects to generate revenue via taxation.
Does Estonian Digital Nomad Visa permit travel in Schengen?
Travel to EU countries is permitted up to 90 days in any 180-day period if already permitted by your passport. If your country does not have visa-free tourist privileges in the EU, this benefit will not apply.
The main benefit compared to simply visa-hopping around Europe is that you can reset your visa without traveling far or exiting the EU to a location like Ireland or Georgia. For example, you could spend 90 days in Estonia, 90 days in Switzerland, then 90 days back in Estonia. This would permit you to spend a full year on EU soil, without paying taxes.