The exponential rise in remote workers worldwide has resulted in many countries launching digital nomad visas to attract professionals to their shores.
Although the existence of digital nomads predates the pandemic, the sudden surge in global numbers led governments to see the various benefits of launching a designated visa program. In the United States, the number of digital nomads has increased more than two-fold between 2019 and 2022 — from 7.3 million in 2019 to 16.9 million in 2022.
In an interview with The Economic Times, the CEO of Optima Money Managers, Pankaj Mathpal, shared his thoughts about the reasons for the popularity of the digital nomad visa and the possible futures ahead.
He explains that the digital nomad visa was designed to encourage professionals to spend money in their host country while continuing to earn from their home country.
“It is a win-win for both individuals who can work remotely and the hosting country, i.e., offering this visa, as they know that the person is not liable for the job in that country because he has to have a secured job or secured income,” said Mathpal in the report.
The digital nomad visa allows professionals to stay for a stipulated time, making it easier to explore the country at their own pace and get a real taste of the local culture. It also helps boost the host country’s economy by encouraging spending, which is especially important during the COVID-19 pandemic.
“Thus spending in that country and earning from their home country is the whole idea behind offering the digital nomad kind of visa,” he added.
A different angle
During the interview, Mathpal also suggested that the global phenomenon has the potential to adversely affect smaller economies, such as developing countries.
“Say for instance an Indian person working from a different country will be earning in Indian Rupees and will need to spend in dollars or euros as the case may be,” Mathpal explained. He added that only those in higher income brackets in regions with weaker currencies could afford the lifestyle.
Mathpal’s comments suggest that digital nomadism could lead to a brain drain from developing countries. This could be amplified by the fact that many countries offer residency paths for digital nomads.
He noted that the digital nomad visas would attract students and individuals with a (high) secured income and expressed his opinion that “people should work in their own country where they are permanent residents.”
This is a really good question because we can proceed from abundance to lift up all or scarcity to make a negative impact. All hinges on digital nomads, locals and governments choosing love or fear as a collective driver.
For example, imagine digital nomads from the Western world with strong currencies in their arsenal moving to developing nations. Real estate owners in developing nations driven by greed jack up prices for rentals. Digital nomads easily pay and locals get priced out, being less prospering through both job and local currency.
However, if real estate folks keep prices constant and digital nomads teach locals – through the most helpful means – how to also make money online t supplement offline work, we all win because we all prosper, enjoy a low cost of living and live in harmony.
All hinges on mindset collectively.