Canada to Launch Digital Nomad Visa by End of 2023

Date:

Key Takeaways

  • Canada is launching a Digital Nomad Visa to attract remote professionals, particularly in the tech sector, as part of its Tech Talent Strategy.
  • The visa allows a stay of up to six months, offers pathways to work permits and permanent residency, and exempts the Labor Market Impact Assessment process.
  • Canadian authorities aim to lure skilled tech workers and encourage economic contributions through this initiative.

In response to Canada’s growing tech labor shortage, the government is set to introduce a new Digital Nomad Visa. This initiative is part of Canada’s broader Tech Talent Strategy, launched in June 2023.

The aim is to attract remote professionals to the country, particularly in the technology sector.

Visa Specifics

  • Duration & Status: Digital nomads can relocate to Canada for up to six months, working remotely for a non-Canadian employer and enjoying a visitor status.
  • Work Permit: After the initial stay, should the nomad receive a job offer from a Canadian firm, they can apply for a work permit valid for up to three years.
  • Pathway to Permanent Residency: This visa provides a potential path to Canadian permanent residency, making it a valuable option for professionals eyeing long-term relocation.
  • Visa Processing Time: The Immigration, Refugees, and Citizenship Canada (IRCC) plans to process this visa application within two months of receiving a completed one.
  • Current Requirements: As it stands, there aren’t any particular prerequisites for the visa. Digital nomads need to apply for a regular Canadian visitor visa, providing evidence of their current job outside Canada and an endorsement from their employer for remote work.
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Canada’s Objective

Canada hopes to attract tech talent and ensure it remains a competitive player in the global talent arena. There is a keen interest in individuals with expertise in STEM fields like software development, data science, and engineering.

Julie Lafortune, a spokesperson for Immigration, Refugees, and Citizenship Canada, emphasized to Forbes the flexibility this strategy offers highly skilled tech workers.

Canadian immigration minister, Sean Fraser, highlighted to the publication that the visa would enable professionals to live and contribute economically in Canada. An added benefit for employers is the Labor Market Impact Assessment process exemption, which usually necessitates justifying the need for foreign workers.

Considering the Shift

The trend of working remotely and being location-independent surged during the pandemic.

A study by MBO Partners in 2022 highlighted that the number of salaried digital nomads had tripled since 2019.

While major tech giants like Amazon and Google are moving towards hybrid models, many companies still prioritize remote work. Before considering relocation, digital nomads should evaluate their current employer’s policies and understand tax implications, particularly between the U.S. and Canada.

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Tax Considerations

For American digital nomads, under the “183 days rule,” the first six months in Canada” means they are taxed only in the U.S.

However, if they gain employment in Canada post this period, they would be liable for taxes in both nations. Expertise, like leveraging the Foreign Earned Income Exclusion and Foreign Tax Credit, can be beneficial in reducing the U.S. tax liability.

Nicole Cieslicki from MBO Partners advises potential nomads to be well-informed: “The devil is in the details… The person who is best prepared and has taken the right immigration and tax counsel will make the right decisions on where to go and for how long,” he told the outlet.

What We Think

Canada’s introduction of the Digital Nomad Visa aligns with global trends in remote work and aims to attract top talent, specifically in tech.

The flexibility offered through this visa facilitates skilled workers’ relocation and long-term contributions to Canada’s economy.

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However, potential candidates should consider the visa’s tax implications, especially for U.S. citizens working remotely in Canada. Being well-informed about tax laws and seeking appropriate counsel is crucial for those considering this opportunity.

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