Remote Work Abroad for Digital Nomads: Document Requirements & Legal Considerations

Remote work has changed the game, making it possible to work from anywhere with a laptop and a stable internet connection. More Americans than ever are embracing the digital nomad lifestyle, trading in a traditional office for a café in Lisbon, a beachside co-working space in Bali, or a high-rise apartment in Mexico City.

But working remotely from another country isn’t as simple as booking a flight and opening your laptop. From visa rules to international taxes and everyday logistics, there are important questions you’ll need to answer before you start. For instance, what documents do you need, and what legal factors should you consider when working remotely abroad?

We’ll cover everything from visa requirements and tax obligations to managing finances and finding the right place to live. Plus, we’ll explore the best countries for digital nomads and practical tips for staying connected while working overseas.

In this guide, we will answer the following questions:

• Are You Legally Allowed to Work Remotely on a Tourist Visa?
• Which Countries Offer the Best Digital Nomad Visas, Strong Infrastructure, Safety, and Affordability?
• What Financial Considerations Should Digital Nomads Keep in Mind?
• What Happens to Your Social Security When You Work or Retire Abroad?
• What Are the Best Banking & Payment Options for Digital Nomads?
• What Essential Documents Do I Need for Remote Work Abroad?
• How Can You Find Reliable Wi-Fi While Working Abroad?

Are You Legally Allowed to Work Remotely on a Tourist Visa?

If you’ve never worked from your laptop in another country, you might be wondering whether it’s legally permitted. In most cases, the answer is yes, as long as you are not working for a company in the country you are visiting.

Tourist visas typically prohibit local employment, meaning you cannot take a job that pays you from within that country’s economy. However, remote work that earns income from foreign employers or clients is generally unregulated and not considered a violation of tourist visa terms.

What’s the Difference Between Tourist Visas and Digital Nomad Visas?

• Tourist Visas: Allow short-term stays but typically restrict employment within the local economy. This means you cannot be hired by a local business or receive payments from within the country. However, most countries do not have specific laws against earning income from foreign sources while traveling on a tourist visa.

• Digital Nomad Visas: These are designed for remote workers who want to stay longer. They typically allow extended stays and provide a legal framework for living and working remotely as long as all income comes from outside the host country. Some also require proof of income, health insurance, or tax contributions.

While many countries do not strictly regulate remote work on a tourist visa, some have been known to enforce restrictions. Countries like Thailand, Indonesia (Bali), the UAE, China, Singapore, Japan, and Vietnam have either specific laws or a history of questioning remote workers. If you plan to work remotely while traveling, it’s best to check the regulations of your destination before you go.

Which Countries Offer the Best Digital Nomad Visas, Strong Infrastructure, Safety, and Affordability?

Finding the perfect country to set up as a digital nomad is an exciting part of the journey. You’ll want a place with reliable internet, a cost of living that fits your budget, and a community that welcomes remote workers. Here are some of the top countries where digital nomads are thriving and making the most of their adventures:

Portugal

Portugal has become a top choice for digital nomads. In Lisbon, you can explore historic neighborhoods and enjoy pastéis de nata at local cafés. Porto offers riverside views and famous port wine, while the southern Algarve region is known for its beaches and fishing villages.

U.S. citizens can stay visa-free for up to 90 days or apply for Portugal’s D7 Visa, which allows remote workers to live there long-term.

Mexico

If you love tacos al pastor and chiles rellenos, Mexico might be the perfect destination for you. The cost of living in cities like Mexico City, Oaxaca, and Playa del Carmen is relatively low, while still offering all the modern amenities and infrastructure needed for remote work.

U.S. citizens can stay in Mexico for up to six months without a visa, making it an easy choice for those looking for flexibility. Additionally, Mexico offers a range of visa options, like the Temporary Resident Visa, for those planning longer stays.

Thailand

Thailand offers vibrant cities like Chiang Mai and Bangkok, where you’ll find plenty of coworking spaces, fast internet, and active digital nomad communities. Its affordable prices let you live comfortably while staying focused on your work.

U.S. citizens can stay in Thailand for up to 60 days without a visa, with the option to extend. Plus, Thailand is perfect for island hopping and boat tours between stunning destinations like Koh Phi Phi and Koh Samui.

Since Thailand sometimes enforces remote working rules, it’s good to note that the Destination Thailand Visa (DTV) allows digital nomads to stay 180 days, with an option to extend. The visa costs around $400 USD, and to qualify, you’ll need to meet financial requirements, including a bank balance of at least 500,000 Thai Baht (approximately $14,400). Applicants must be at least 20 years old and provide proof of employment with a foreign company or a professional portfolio for freelancers.

Spain

Spain offers plenty for digital nomads. In Barcelona, you’ll find a plethora of hostels and coworking spaces. When you’re not working, you can enjoy fresh local food at La Boqueria Market. For a smaller city, try Valencia, known for its paella, which offers a relaxed lifestyle by the Mediterranean and beautiful beaches like Malvarrosa.

U.S. citizens can stay in Spain for up to 90 days without a visa or opt for Spain’s Digital Nomad Visa, which allows remote workers to stay for up to one year, with the option for renewal.

Colombia

Colombia draws digital nomads with its diverse cities and landscapes. Medellín has a modern metro and springlike weather, Bogotá is known for street art and high-altitude cafés, and Cartagena offers colonial charm by the Caribbean. From enjoying bandeja paisa to dancing salsa in Cali or visiting coffee farms, there’s plenty to explore while working remotely.

U.S. citizens can stay in Colombia for up to 90 days without a visa, with the option to extend for another 90 days. For those looking to stay longer, Colombia offers the Migrant (M) Visa for Digital Nomads, allowing remote workers to live there for up to two years.

What Financial Considerations Should Digital Nomads Keep in Mind?

When living abroad, digital nomads should know that their income might be subject to U.S. and foreign tax laws. Understanding the tax implications of working remotely and the available exemptions can help avoid unexpected liabilities and ensure compliance with tax obligations in both the U.S. and the foreign country where you’re living.

How Can Tax Treaties Help You Avoid Double Taxation?

The U.S. has tax treaties with several countries that help prevent double taxation on the same income. These agreements typically allow you to claim a credit for foreign taxes paid, reducing or eliminating your U.S. tax liability.

For example, a U.S. citizen living in France, Germany, the United Kingdom, Canada, Portugal, Spain, or Mexico benefits from tax treaties with the U.S., which provide mechanisms for avoiding double taxation, including foreign tax credits and exemptions on certain types of income.

However, if you’re traveling in a country that does not have a tax treaty with the U.S., there may be a greater risk of double taxation. In these cases, you may need to rely on the Foreign Tax Credit (FTC) or the Foreign Earned Income Exclusion (FEIE) to reduce your U.S. tax burden.

The Foreign Tax Credit allows you to offset U.S. taxes with taxes you have already paid to a foreign government on non-U.S. income. For example, if you work for a tech company based in Ireland and pay Irish income taxes, you can use the FTC to reduce or eliminate the U.S. taxes owed on that income.

What Happens to Your Social Security When You Work or Retire Abroad?

Social Security is a government program that provides retirement income, disability benefits, and survivor benefits to eligible workers and their families.

In the U.S., most workers, including employees and self-employed individuals, must contribute a portion of their earnings to Social Security through payroll taxes, even when living abroad. Luckily, these contributions build up over time, ensuring you qualify for benefits later in life.

Can You Receive Social Security Benefits While Living Abroad?

If you’ve paid into Social Security long enough to qualify, usually about 10 years of work or 40 credits, you can typically receive benefits even if you live in another country. U.S. citizens can have their Social Security payments deposited directly into a foreign or U.S. bank account, though some countries have restrictions. However, moving abroad doesn’t change your eligibility. You will still receive retirement benefits once you reach the required age, just as you would if you were living in the U.S.

If you’re younger and still working remotely, your Social Security contributions today will still count toward your future benefits, whether you retire in the U.S. or abroad.

Can Totalization Agreements Prevent Dual Contributions?

The U.S. has totalization agreements with several countries, including Mexico, Portugal, Spain, and Australia, to prevent workers from simultaneously paying into both Social Security systems. If you work for a foreign employer in one of these countries, you may only be required to contribute to one Social Security system, either the U.S. or the foreign system, depending on where you are working. These agreements help ensure that workers are not double-taxed on their social security contributions.

Does Medicare Provide Healthcare Coverage When You’re Outside the U.S.?

Medicare is a U.S. government health insurance program for people 65 and older, as well as some younger individuals with disabilities. It helps cover hospital stays, doctor visits, and prescription medications, but it only works within the U.S.

Even if you receive Social Security benefits abroad, Medicare coverage generally doesn’t extend outside the U.S. This means that if you’re living abroad, you won’t be able to rely on Medicare for healthcare. Instead, you’ll need to arrange for private health insurance or enroll in the healthcare system of the country where you’re living to ensure you’re covered.

What Are the Best Banking & Payment Options for Digital Nomads?

Managing your finances while living abroad requires more than just a good Wi-Fi connection. From choosing the right bank to handling international payments, setting up your finances properly ensures you can access your money easily and avoid unnecessary fees.

What Financial Proof and Banking Information Will You Need for Remote Work Abroad?

Some visa applications require proof of income or savings. Even if it’s not a requirement, having bank statements, pay stubs, or a letter from your employer confirming your remote work arrangement might be useful.

In addition, it’s important to notify your bank of your travel plans to avoid having your card flagged for suspicious activity. Many banking apps and websites allow you to preemptively alert them about your travel dates and destinations. This way, your card won’t be denied or frozen due to activity that seems out of the ordinary. Check your bank’s app or website for this feature to ensure smooth financial transactions while abroad.

Should You Keep a U.S. Bank Account While Living Abroad?

Maintaining a U.S. bank account while living abroad can provide several advantages, especially for digital nomads. It can simplify the process of paying your U.S. taxes, help maintain your U.S. credit history, and maintain access to important financial services, including credit cards and loans, which may not be available through local banks. Keeping a U.S. account also allows you to manage your finances in your home currency, making it easier to avoid exchange rate hassles and minimize international banking fees.

Some banks, such as Charles Schwab, offer checking accounts with no foreign transaction fees and reimburse international ATM fees, making them ideal for digital nomads.

Which International Banks Are Best for Remote Workers?

Some U.S. banks have established international branches or partnerships that can simplify banking abroad, allowing for seamless access to your funds and reduced fees. HSBC and Citibank, for example, offer global accounts that provide easy access to funds in multiple countries with minimal fees, making them excellent choices for digital nomads who need flexibility.

HSBC’s extensive network across Europe, Asia, and Latin America ensures fee-free access to ATMs in many locations. At the same time, Citibank’s global presence allows for convenient banking in numerous countries without incurring excessive charges.

What Are the Best Online Banks for Digital Nomads?

Online banks operate exclusively through digital platforms, meaning they offer banking services without physical branches. For digital nomads, these banks can provide easy access to multi-currency accounts, low foreign transaction fees, and simplified international money management. Revolut, Chime, and Monzo are three of the best options available.

Revolut offers real-time currency exchanges at interbank rates and allows users to hold multiple currencies within the same account, making it ideal for frequent travelers.

Chime, a U.S.-based online bank, offers no foreign transaction fees and access to a wide network of ATMs, making it a convenient option for U.S. travelers.

Monzo, a UK-based online bank that became available to U.S. citizens in 2022, provides no-fee international transfers, real-time notifications, and an intuitive mobile app for managing finances on the go. All three options provide convenient, low-cost alternatives to traditional banking, with features tailored to the needs of digital nomads.

What’s the Best Way to Send and Receive Money Internationally?

When living abroad, there are several situations where you might need to send money internationally. Whether you’re paying for rent, supporting family back home, or sending money to a local friend, transferring funds between countries is often necessary.

For international money transfers, there are myriad options that offer competitive exchange rates and lower fees than traditional banks. Some of the best options include:

Wise is well-suited for sending large amounts at low rates, with competitive exchange rates and no hidden fees. It’s a great choice for those who need to move significant sums of money across borders.

PayPal operates in over 200 countries and is known for fast transfers, though it comes with higher fees. If speed is your priority and the recipient already has a PayPal account, this could be a convenient option.

WorldRemit is a cost-effective choice for sending smaller amounts, with competitive exchange rates and various payment methods available. This could be a great option for digital nomads who need to send money frequently but in smaller amounts.

Remitly provides faster transfers for specific destinations and is ideal for those sending money quickly. With competitive rates and different delivery options, it’s perfect for sending money quickly to certain regions.

Each service offers something unique, so it’s a good idea to compare them to find the best fit for your needs. Whether you’re sending large sums, looking for speed, or aiming to keep costs low, there’s a transfer service for every situation.

What Essential Documents Do I Need for Remote Work Abroad?

Having the right documents on hand can make your transition to remote work abroad much smoother. Below, we’ll review some key documents to prepare before you go.

How Long Does My Passport Need to Be Valid?

Many countries require your passport to be valid for at least six months beyond your planned stay. If your passport doesn’t meet this requirement, you could be denied entry or not allowed to board your flight. To avoid issues, check your passport’s expiration well in advance, especially when traveling to countries that strictly enforce this rule, such as China, Thailand, and many in the Schengen Zone of the EU.

While you can’t carry a “backup” passport, storing a digital copy securely online or on your device is still a good idea. A digital copy should be a clear scan or photo of your passport, making it easy to access if it is lost or stolen, and helping with replacement or emergency travel documents.

Should I Have Proof of Accommodation & Onward Travel?

When traveling abroad, some countries require you to show proof of your accommodation, such as a hotel reservation, Booking.com reservation, Airbnb booking, or a signed lease agreement. This helps demonstrate that you have a place to stay while visiting and are not planning to overstay your welcome.

An onward travel ticket proves that you intend to leave the country within the legal timeframe of your visa. This could be a return ticket to your home country or a flight to another destination after your stay. Immigration officials may ask to see your onward travel documents to ensure you aren’t planning to overstay your visa.

If traveling on a tourist visa, an onward ticket can save you from delays or being denied entry. For example, if you’re visiting a country with a 30-day tourist visa, showing a flight out of the country on day 28 reassures immigration authorities that you’ll leave before your visa expires.

What Health & Insurance Documents Should I Have When Traveling?

Many digital nomad visas require proof of health insurance, and even if they don’t, having coverage for medical emergencies is probably a good idea. It’s wise to keep both digital and printed copies of your insurance policy, including coverage details and emergency contact phone numbers.

If you’re taking prescription medication, make sure to bring enough for your stay. It’s also a good idea to carry a doctor’s note or a copy of your prescription in case you need to refill while abroad. Be aware that some medications are regulated differently in other countries, so it’s smart to check the local rules before you travel.

Additionally, check if the country you’re traveling to has any vaccination requirements or recommendations. Some countries may require proof of vaccinations, like yellow fever or COVID-19, as part of their entry process. It’s a good idea to consult with your healthcare provider or a travel clinic well in advance to ensure you’re up to date on any necessary immunizations. Some destinations require proof of vaccination for entry, so keep a copy of your records handy in case you’re asked to show them at customs.

How Can You Find Reliable Wi-Fi While Working Abroad?

Reliable Wi-Fi is essential for any digital nomad, and there are several ways to make sure you stay connected anywhere in the world.

First, research internet availability in your destination by checking websites like Speedtest Global Index for information on internet speeds and costs. You can also find online forums on sites like Reddit and Facebook dedicated to digital nomads. There, you can ask like-minded travelers about WiFi availability in specific countries or cities and usually get a quick response.

When booking accommodations, always confirm that the place has reliable high-speed Wi-Fi. Don’t just rely on the listing details; check the reviews for mentions of internet quality. If possible, you can contact the host directly to inquire about the exact speed of the connection where you’re staying.

Cafes are another popular spot for remote work, especially in areas frequented by digital nomads. Many cafes advertise free Wi-Fi, but it’s still helpful to check reviews to be sure the internet is stable. Websites like Workfrom can help you find cafes and other venues known for reliable Wi-Fi.

What are the Best Mobile Hotspots and International Data Plans?

You might want to look into mobile hotspots and international SIM cards to ensure you’re always connected. Devices like Skyroam Solis or GlocalMe are portable Wi-Fi hotspots that provide reliable internet in multiple countries. These devices often use local networks to provide seamless coverage and can save you from having to search for a new Wi-Fi connection in every city you visit.

In addition, some mobile carriers offer international plans that include Wi-Fi hotspot capabilities. For example, Google Fi provides seamless data coverage in over 200 destinations, including access to Wi-Fi hotspots worldwide. Other providers, like T-Mobile and AT&T, also offer international travel plans with data and hotspot capabilities, which can be useful if you’re moving frequently and want to avoid disruptions in your workday.

How Can You Find the Best Coworking Spaces?

Coworking spaces are an excellent resource for digital nomads, providing both a reliable working environment and networking opportunities. To find the right coworking space for you, research the options in your location through websites like Coworker or Deskmag. These platforms offer reviews from other remote workers, helping you understand the space’s atmosphere, Wi-Fi quality, and price.

Before choosing a coworking space, consider your personal work needs. Do you prefer a quieter environment, or are you looking for more opportunities to network and collaborate? Many coworking spaces have separate areas for focused work and social interaction, so choose one that fits your working style.

Location and cost are also important considerations. Major cities often have numerous coworking spaces, but they can be expensive. Exploring less tourist-heavy areas can help you find more affordable spaces with a quieter atmosphere. Additionally, consider how far the coworking space is from where you’re staying. Choosing a place within walking distance or a short commute can save you valuable time.

Key Takeaways

Navigating the world of remote work as a digital nomad involves careful consideration of visas, tax obligations, and financial management. Whether you’re staying in a country short-term on a tourist visa or securing a digital nomad visa for a longer stay, it’s important to know the legal framework of each destination.

From understanding the impact of tax treaties to managing your Social Security contributions and banking while abroad, being informed and prepared makes the experience smoother. With the right planning, you can enjoy the freedom and flexibility of remote work without being caught off guard by legal or financial challenges.

Stay tuned for our next article, where we’ll dive into navigating work visas and permits for U.S. citizens. We’ll cover essential topics like common work permit categories, country-by-country visa processes, and the typical application timelines and documentation needed to ensure you meet all legal requirements.

Author: Aaron Randolph | LinkedIn