Digital Nomad Visa Becomes Available July 1

The situation

The Estonian government will introduce a Digital Nomad Visa on July 1, 2020, which will allow foreign nationals to live in Estonia while continuing to work for a foreign employer or as a freelancer, where currently all other Estonian work authorization options require a local employment contract.

A closer look

Further details of the new visa include:

• Short- and long-term stay options. The Digital Nomad Visa will be available for stays of up to 90 days under a short-term application process, or up to one year under a long-term application process.
• Eligibility. Applicants must be under their home country employment contract, hold shares in or provide services primarily to foreign companies or hold shares in a company registered in Estonia to qualify for this visa. Freelancers must have mostly foreign-based clients to qualify for this visa, though the bill does not expound on this requirement.
• Local sponsorship. The application must be sponsored by an authorized intermediary or undergo an ‘alternative assessment’. Estonian authorities have not yet published a list of authorized intermediaries, instructions on how to obtain authorized status, nor practical instructions on alternative assessment (e.g., for freelancers). The intermediary must fulfill typical immigration sponsorship obligations such as guaranteeing the visa holder’s accommodation, bearing costs of stay, departure and/or deportation.
• Limited visa access due to COVID-19. Due to pandemic-related entry restrictions in Estonia, currently, only those residing in the European Union, Schengen Area or United Kingdom can apply for the visa. As travel restrictions are relaxed in Estonia, the visa will become available to more applicants.
• Process. Eligible applicants can either apply abroad or enter as tourists and apply in Estonia. The Estonian government intends to implement a streamlined visa application process, but has not yet released details.

Impact

• Working under home employment contract. The visa would offer an Estonian work authorization option without requiring a local employment contract, where no such option currently exists in Estonia.
• Local work permitted. Visa holders would not require additional work authorization for limited local work, as long as their main purpose of stay remains remote work. Local work registration, which involves registration of short-term employment at the Estonian Police and Border Board Guard, would still be required. 
• Schengen Area mobility. The visa will include Schengen travel rights, allowing foreign nationals to benefit from Estonia’s low cost of living and tech-friendly climate while travelling throughout the Schengen Area.  Days spent in Estonia would not be deducted from the 90-day allowance in the Schengen Area. Depending on local immigration requirements in each EU Member State, Digital Nomad visa holders may be permitted to perform short-term work and/or service activities in other EU countries.

Background

• Estonian plans. By introducing this visa, the Estonian government seeks to promote Estonia’s reputation as a tech-friendly, forward-thinking state for skilled foreign nationals.
• Remote work largely unregulated globally. Despite its increasing importance especially during the pandemic, most European countries still do not regulate remote work. Though remote work may be possible globally, many countries do not explicitly address such work in immigration regulations, and instead employment, tax or other types of law may govern rights to work remotely. This grey area of law is still under development around the world but has been propelled to be a high-priority issue during COVID-19, when many workers’ positions were made remote to avoid person-to-person contact.

Looking ahead

• Plans to streamline processes in Estonia. The Estonian government plans to further simplify the immigration process through technological solutions. Specifically, the government seeks to develop a self-service environment, which would allow foreign nationals to apply for visas and e-residency; and would allow both foreign nationals and companies to connect with immigration authorities, tax authorities and town hall through a single digital platform. Fragomen will report on related developments.
• The future of remote work visas. As the gap between the “new normal” remote work culture and traditional regulatory framework widens, governments will start to adapt, but likely slowly and with resistance. In countries where remote work is unregulated, workers and employers may unknowingly put themselves at risk of noncompliance with many aspects of the law, exposing them to possible fines or other penalties, depending on the country. Importantly, noncompliance with regulations could result in employers losing their rights to hire foreign labor. It will become increasingly important as such policies are developed (and in many countries where remote work is unregulated) for employers to analyze strategies and assess risks associated with implementing and/or continuing remote work policies with a trusted immigration partner.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].