Will Covid-19 unleash a new generation of digital nomads?

– Covid-19 has facilitated the widespread adoption of remote working

– Despite travel restrictions, countries are seeking to attract digital nomads

– Dubai and Mexico have emerged as key destinations for foreign remote workers

– As travel resumes, many anticipate a new wave of roaming digital nomads

With Covid-19 facilitating the widespread adoption of remote working practices, some emerging markets are seeking to attract digital nomads through a series of incentives and special visas.

Despite border closures and travel restrictions resulting from the virus, various countries are stepping up efforts to incentivise the movement of so-called digital nomads – people who work remotely and relocate relatively freely.

For example, in October the Dubai government launched its virtual working programme, an initiative that gives foreign professionals the opportunity to move to the emirate and continue to work remotely in their current jobs.

The one-year programme, launched after Dubai reopened its borders to international tourists in July last year, is designed is attract professionals, entrepreneurs and those working in start-ups.

Given its strong ICT infrastructure and healthy start-up scene, Dubai has been seen as an increasingly attractive option for digital nomads in recent years, with officials marketing the emirate as a place where people can live and work by the beach.

As a further incentive, in January officials began offering free vaccines to those on the programme.

Mexico enhances its appeal

Another emerging market that has become an increasingly attractive proposition for digital nomads during the pandemic is Mexico.

A number of remote workers – particularly from the US and Canada – relocated to the country over the course of 2020.

While Mexico, the US and Canada agreed in January to restrict non-essential travel between the countries as a result of spike in infections – a measure that will remain in place until the end of February – Mexico’s more liberal approach towards its border throughout 2020 has contrasted with many other countries in the region.

For example, Colombia and Peru kept their borders shut for much of last year, and Trinidad and Tobago is unlikely to re-open its borders in the foreseeable future.

On top of this, the ability of US citizens to acquire a six-month visa on arrival constitutes a significant incentive for digital nomads, alongside the flexibility of the country’s Temporary Resident Visa, which allows foreigners to stay for between 180 days and four years.

This has meant that some locations in Mexico, such as Tulum on the Caribbean coast, have been particularly busy as a result of the increase in foreign workers.

In a sign that many expect this boost to be more than temporary, in February last year hotel operator Selina – which specialises in accommodation for digital nomads – announced that it was looking to expand its offerings in Mexico. The company said it would invest $150m over a two-year period, increasing its number of hotel and hostel beds from around 2300 to 10,000.

Competition from developed and high-income countries

Emerging markets are not the only ones looking to attract digital nomads.

Following the collapse of global tourism as a result of Covid-19, a number of high-income Caribbean nations turned towards incentivising such immigration as a way of offsetting the economic fallout of the virus.

In July Barbados launched its Welcome Stamp programme. Within 48 hours of submitting a successful application and paying the $2000 application fee, eligible remote workers will be able to live in the country for one year.

This was followed in August by the launch of the Work From Anguilla programme, which similarly offers visas to remote workers for up to one year; and the two-year Antigua and Barbuda Digital Residence Visa, unveiled in November.

Cayman Islands, Bermuda and Montserrat have similar initiatives. 

This approach has also been replicated in Europe, with Croatia, Greece and the regional government of the Portuguese island of Madeira unveiling incentives to attract foreign remote workers.

Meanwhile, the government of Estonia – which since 2014 has been home to a pioneering e-residency programme, designed to attract start-ups and entrepreneurs – updated its offering in August last year with the launch of a special digital nomad visa, allowing remote workers to live and work in the country for one year.

Digital nomads: the new normal?

With Covid-19 facilitating a mass shift towards remote work, the digital nomad phenomenon is set for continued expansion in the coming years, as businesses offload expensive office space and employers and employees alike become more accustomed to working remotely.

In fact, the trend was increasing even before the pandemic, facilitated by the growth of co-working spaces and the establishment of digital nomad-oriented companies.

One of those is the California-headquartered Outside, which offers co-living and co-working spaces, online platforms and services for remote workers. The company has eight locations in the US and nine elsewhere in the world, including Tulum and San José del Cabo in Mexico; Ericeira and Lisbon in Portugal; and Bali.

As borders gradually open and travel resumes, more emerging markets will look to capitalise on the growing trend of digital nomads looking for affordable, reliable and appealing places from which to work.