Blog

Digital nomads are supposed to pay tax in the country where they are registered as a tax resident.

Typically, tax residents need to be based in a country for 180 days to be registered to pay tax.

If you plan to travel as a digital nomad, you will need to check with the tax laws in your country to see how this affects you.

Digital nomad tax loophole.

Currently, digital nomads are getting caught in a tax loophole where they aren’t a resident in a country long enough to pay tax. However, many governments are closing the loophole and the last thing digital nomads want is to be hit with a tax bill that is backdated for missed payments.

You can always register a company or trust in a country and have the operations processed through the company or trust, so that you pay the correct tax to the right government.

You can also pay yourself through the company or trust based. You can then minimize your tax in accordance with the law of the country.

For example, in Australia, the first $18,000 in employed or business income isn’t taxed. If you paid yourself this income from a company as employment income, you would fulfill the legal requirements under Australian law. The income getting paid to the company would still need to be paid by the company, which in Australia is 30%.

The best destination to base yourself as a digital nomad depends on the type of lifestyle that you want to enjoy. And thankfully, there are quite a few options that you can consider if you want to base yourself.

Cost is one factor, but it isn’t the only factor that you should consider. In the end, you want to have a great experience in the place where you will base yourself as a digital nomad. So we’ve considered the following factors for choosing the top digital nomad destinations.

Cost of living

The cost of living is important as you want to be able to afford to have a good experience in the place in which you are based.

The lower the cost of living, the easier it will be to live as a digital nomad. You won’t need to worry about “making ends meet.

Instead, you will have the opportunity to be more creative and take more risks with your digital nomad ventures.

A sweet spot is if you are able to minimize your cost of living to less than $1000USD a month.

Infrastructure.

From the travels that we have personally done, we have found that it isn’t worth trading off good infrastructure for cost. It’s important to have good infrastructure such as transport, safety, internet, and communications.

This will allow you to improve your productivity and mobility.

Quality of life

This is a huge factor that gets overlooked by alot of digital nomads. Ultimately, you need to be happy with the quality of life that the digital nomad lifestyle offers you.

You can live cheap and frugally in a hostel in Cambodia renting a bed with a mosquito net for $1-2 a night. Or you can rent an apartment or a villa for $1,000USD a month and share it with friends, family, or partners.

The same thing goes for being able to socialize, explore, and participate in activities.

It depends what kind of lifestyle you want.

Activities and lifestyle

Are there any activities that you would like to participate in while you are travelling to the destinations? For example, would you like to get involved with local sports teams? Or would you like to participate in cultural experiences such as visiting landmarks or cultural events.

Cultural immersion

Do you want to be completely immersed in the culture of the destination that you are visiting?

Do you want to live with the locals and participate in the local activities? And if so, can you afford to do so?

Top destinations for digital nomads.

Kuala Lumpur, Malaysia

I personally felt like this was the best place to be based as a digital nomad in South East Asia. The reason being was that it was easy to be productive in the city with excellent internet connection.

The city also has excellent transportation networks internally and globally.

I’d originally found travel deals to Singapore and the Maldives for as little as $50 per person.

The lifestyle in Kuala Lumpur was also enjoyable. And the food was amazing.

Click here to see more about being a digital nomad in Kuala Lumpur.

Lisbon

Lisbon is one of the most incredible cities to visit in Europe. Very cosmopolitan and inexpensive when compared to other areas in Europe. It is possible to live in Lisbon for less than 1000 Euros a month, but you will still get access to the 24/7 lifestyle that the city has to offer.

If you like music, entertainment, art, sunshine, scenic views, and the ability to explore other areas in Europe, Lisbon may just be the place where you should be based as a digital nomad.

Click here to see more about being a digital nomad in Lisbon.

Brisbane, Australia

Brisbane, Australia offers a really good lifestyle that will give you the opportunity to explore different regions of the country. Although it is more expensive per month to be based in Australia, the cost of living can be minimized and it is traded off by the amount of free activities and events that the city offers.

It will never be as cheap as South East Asia, but for a little bit more, you will get a cleaner and safer environment, a healthier and nice place to live, and easy access to beaches and outdoor activities.

On top of that, locals area generally polite and friendly.

There are also budget airlines that can take you to other digital nomad destinations such as Bangkok, Chiang Mai, and Bali.

Click here to see more about being a digital nomad in Brisbane.

Chiang Mai

Chiang Mai has been at the top of the list for a very long time with digital nomads. It has great infrastructure and is relatively inexpensive. There’s a mix of the “old with the new”. It also has easy transportation networks to other countries such as Laos, Vietnam, Malaysia, and more.

Click here to see more about being a digital nomad in Chiang Mai.

Vietnam

Vietnam is another interesting place to be based and you can choose to be based either in Ho Chi Minh city, Hanoi, or one of the smaller cities inbetween.

You can get a great home setup for a relatively low price (sometimes as little as $400USD per month).

You can easily get inexpensive transportation networks to take you within the country or to other areas.

It will also give you a great opportunity to grow your business remotely.

Click here to see more about being a digital nomad in Vietnam.

Are there any places that you would also like to see on this list? Leave your suggestions in the comments below.

Digital nomads tend to earn as little as $1000-2000USD per month to sustain their travel lifestyle.

This equates to $12,000-24,000USD per year.

The more a digital nomad can earn, the more comfort they will have with their travels.

Is it possible to earn a high income as a digital nomad?

Yes it is, as long as they diversify their income sources beyond remote employment.

In a remote employment position, it is possible for a digital nomad to earn between $1000-4000 per month.

Should the digital nomad start an online/digital business, the income could soar to $10,000-$100,000 per month or more.

Is there any proof of earnings for digital nomads?

Yes. There’s plenty. You can check these income reports from digital nomads below.

How I made $50,000 in 1 year

$1600/month while travelling.

$6000/month while travelling as a digital nomad.

$14K+ in one month while travelling

As you can see, the possibilities are endless!

Have you started earning an income as a digital nomad? Tell us where you are at with your journey in the comments below.

Strictly speaking, being a digital nomad is legal only if you have the right visa that grants you the permissions to work in the country that you are travelling to.

Additionally, you need to confirm exactly what the entrance visa states and how it relates to the travel visa rights in the country.

Many visas relate to not taking away jobs from locals and that any business that is done within the territory will provide income tax to the local government if the business is operating as a resident in that country.

If this isn’t the case, then there shouldn’t be an issue.

Typically, if you reside in a country for longer than 180 days, you are obliged to register as a resident in that country for tax purposes. And you will need to inform your previous country of residence of the change in your residency and how that will affect your taxable income.

The second thing is if you are selling products or services, it cannot be done in the country/region that you are residing if you are on a travel visa. If you have the correct working or business visa, then it is fine to do so.

If you plan to get employment or income locally in a country, you must have the correct working visa to do so.

Before you plan to visit a country as a digital nomad, please check to see what the legalities are around the following.

• The types of visas that you can enter into the country with, and what permissions are granted with those visas.
• How your funds or external income may affect your travels.
• Any specific legalities that you should be aware of when entering the country.

Do not plead ignorance!

There are many people that go to another country as a digital nomad and ignore the visa requirements and do things such as work remotely and takeaway jobs from the local talent.

There are cases where this has been clamped down on in Thailand and those nomads have been expelled from the Kingdom of Thailand and blacklisted from re-entering.