The Practicalities of Being a Digital Nomad Part 2: Tax, Visas, Flights & Security

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In the first part of The Practicalities of Being a Digital Nomad we covered travel insurance, vaccinations, healthcare on the road, addresses, banking, and retirement. In Part 2 we’ll be covering more of the details that we are often asked about—the rather dull but essential details that make it possible to work while travelling.

Tax

Tax is a complicated issue and we haven’t earned enough yet to make it worthwhile paying for proper advice, so you should take this with a pinch of salt, and ideally get advice from a tax professional.

We don’t live in any one country but we earn a living online and from freelance clients all over the world mostly in the UK, USA and Canada. We have to pay tax somewhere so we choose to do so in the UK. If we were living somewhere else permanently we could pay tax there instead but we never stay in any one country long enough to be resident.

We are registered as self employed in the UK which is pretty easy to do. We have also set up a partnership (again, an easy process) for the two of us. Each year we fill out a tax return online and pay any taxes owed. To be honest, we haven’t had to pay much as we don’t earn a huge amount and due to the personal allowance we can earn £16,210 (after expenses) between the two of us before we have to pay tax.

I keep track of income and business expenses in a spreadsheet as they occur which makes filling in the tax return at the end of the year relatively easy. We take photos of receipts so we don’t have to carry them around.

Visas

New or aspiring digital nomads often worry about visas. If you are working in a country as you travel do you need a work visa? Now, we aren’t qualified to give you the official, legal answer to this as it’s a complicated issue and I don’t think immigration offices around the world are set up for the new breed of nomads who work online as they travel without having a home base.

What I can tell you is that we, and every other digital nomad we know, enters the country on a tourist visa. We don’t mention the fact that we’ll be working in the country, as this will complicate matters, and the fact is our business is registered in the UK and our clients are not in the country we are entering. We have never had any problems with this approach.

Many countries allow us to stay for 90 days on a tourist visa, usually available on arrival. In Mexico, where we are at the moment it’s six months, for other countries it can be less. Often you can cross the border and come back to get another 90 days (or however long).

In the last three years the only visas we’ve applied for in advance were for Egypt (not essential to get in advance), Burma, and Thailand where you only get a month on arrival by plane, so we got a double entry tourist visa that gives you two months then you can leave and get another two months when you come back. You can extend each of those by an extra month too. To visit the US we filled in the ESTA online before travelling.

Just make sure you do some research before you arrive in a country to check the situation and allow yourself time to get a visa if you need to do so in advance.

Internet & Phone

Internet is essential for our work so we often have to choose our destinations based on the reliability of the internet. We like to rent apartments with WiFi much of the time—good bases so far have including Buenos Aires, Salta, Medellin, Chiang Mai, Koh Lanta, Tuscany, Lisbon, and Playa del Carmen.

We have travelled for three years without a mobile phone and haven’t missed having one. We use Skype to call our family for free, and we bought Skype credit to make calls to regular phones for when we need to call the bank etc. Call costs are low and £10 credit probably lasts us a year.

A few months ago we bought an unlocked iPhone 5 but we haven’t bought a SIM card for it yet. We mainly bought it for the camera, GPS and because Simon is developing iPhone apps. It’ll also be a good internet backup when we do get a SIM. The GPS is really handy as we have a tendency to get lost and it works even when you aren’t connected to the internet. We plan to buy local pre-paid SIM cards for it but we haven’t needed to yet as we have good WiFi in our current apartment in Playa del Carmen.

Update 2015: We’ve now been travelling with an iPhone for a few years and have become rather dependent on it, especially for maps to get around. You can read about how we buy local SIM cards around the world, and our favourite travel apps

Flights

We are often asked by people planning a round the world (RTW) trip whether we recommend a RTW flight ticket or buying flights as you go. On our first year-long trip (in our pre digital nomad days) we bought a Great Escapade RTW ticket taking us from the UK to Asia to Australia, New Zealand and the South Pacific, on to the US and back to the UK. It probably did save us money and we were able to travel on great airlines like Singapore Airlines rather than choosing budget alternatives.

But we regretted buying the ticket because we felt too locked in to our plans. It was possible to change dates (for a fee on some airlines) but changing the route was much more difficult. Everyone who travels long term changes their plans at some point. You may not think you will, but you will. Buying flights as you go gives you the flexibility to change your plans, stay longer in a place you love and leave sooner the places you don’t.

Now we rarely plan more than a month in advance and we just buy one way flights as we go. We try to limit inter-continental flights to once or twice a year as they are expensive and we like to spend longer in a region. We use sites like Skyscanner to find the best flight prices.

For some countries you are technically supposed to provide proof of onward travel when you enter, but in practice we are rarely asked for this and most of the time we don’t have an onward flight. As the US can be strict we do tend to have onward flights booked before we enter. If you are concerned then you could also try creating your own onward ticket—Wandering Earl tells you how.

Packing

Us with all our belongings

Us with all our belongings

We’ve been travelling for nearly three years with a carry-on size backpack each. We never have to check our luggage; we bring it with us on planes and buses; we don’t need a separate bag for our laptops; and we don’t have to lug around a huge, heavy pack. We save time and money (no check-in fees) and reduce the stress of travel. We have never regretted our decision and are surprised more people don’t travel with small bags. Whether you are travelling for a week or indefinitely we think carry-on luggage is the way to go.

Sure, we don’t have a huge variety of clothing but as every item goes with everything else we have enough, and we’ve got used to the lack of choice—in fact it makes life easier not having to think too long about what to wear! Compression bags help save space by sucking out the air and reducing your clothes to a much smaller package, and a Kindle saves a huge amount of space and weight for big readers.

For more information see our packing list and our tips for travelling with carry-on luggage only.

Security

Since becoming digital nomads we’ve only had a brush with crime twice—a near-miss mugging in Rio de Janeiro but we didn’t lose anything or get hurt, and in Costa Rica we were pickpocketed on a bus. Considering all that we’ve lost in three years of travelling is $30 from that wallet we think that’s pretty good going.

Here’s a few tips that we use to keep our things safe:

  • We wear a money belt on travel days with our passports, credit/debit cards and cash.
  • We only keep a small amount of cash and one card in our wallet.
  • Simon wears travel trousers and shorts that have a zipped inner pocket that keeps his iPhone hidden.
  • We usually keep our backpacks under our seats on buses not in the overhead compartments.
  • We leave our valuables (laptop, cash, passports) in our hotel when we go out and have never had a problem. We leave them in our backpack which is locked with a small combination lock and also sometimes use a thin cable lock to lock the backpack to a secure piece of furniture.
  • I use my judgement about whether I feel comfortable taking my SLR camera out. Usually I do but if I’m more cautious (like in Rio) I might take my compact camera instead.
  • We have lots of cash and card backups in case things get stolen (see managing your finances while travelling) as well as copies of our passports in our backpacks and online.
  • Our laptop and camera are insured. See the insurance section in Part 1 of The Practicalities of Being a Digital Nomad.

We are cautious but we never feel unsafe on our travels. The world is not as scary a place as the media would have you believe.

Further Reading

You might find these other posts we have written useful:

We hope you’ve found these posts useful and that they answer some of your questions and concerns about becoming a digital nomad. Although these things may seem overwhelming at first once you hit the road everything falls into place. Let us know if you have any more questions and we’ll be happy to help.

Are you planning a trip? See our Travel Resources page for our favourite tools and gear to help you plan the perfect trip. 

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37 thoughts on The Practicalities of Being a Digital Nomad Part 2: Tax, Visas, Flights & Security

  1. Hey Erin, thanks for all the info you share. We are about to apply for 60 day Thai visa from the UK and wonder what evidence of self employment you had to show? Our business’s are new so we won’t have a tax return yet. Thanks Kathryn x

    • I can’t remember having to show self-employment proof for our Thai visa. Perhaps any kind of letter you have from the inland revenue that shows you are registered as self-employed. For our Indonesian visa we showed a bill for NI from the Inland Revenue.

  2. Pingback: 9 Reasons You Should Quit Your Job And Move To Thailand | Beego Trip

  3. Hi,
    I love your blog, very useful and inspiring. Please can you tell me where was this picture taken? It ‘ s like my dream gateway and I am planing on a trip but really want to know where it is. I love it!

  4. Pingback: 9 Reasons You Should Quit Your Job And Move To Thailand - ViralCreatives

  5. Hi,

    Great post and a lot of good information.

    With regards to the tax part I have to add something:

    “We don’t live in any one country but we earn a living online and from freelance clients all over the world mostly in the UK, USA and Canada.”

    What you are saying here is that you are not a resident in any place in the world. And furthermore:

    “we never stay in any one country long enough to be resident.”

    All countries in the world -except the US- tax based on residency. You are not resident anywhere…

    “We have to pay tax somewhere so we choose to do so in the UK.”

    In fact, you don’t.

    There is no worldwide government that forces you to pay taxes somewhere. Governments look at facts and only when you are resident in country and generate or receive taxable income there, you will likely be liable for taxation.

    If you are a resident in a country that does not have taxes, or in a country that does not have taxes on foreign sourced income or when you are not resident anywhere, you can structure your business in such a way that you can live tax-free.

    I wrote an introductionary article about this:

    How To Reduce Taxes As A Digital Nomad

  6. Really great advice. It’s cool to here Simon is starting to develop apps! I’m currently an ios game developer, designer and publisher, and would fund my future travels through this. As a 20 year old with an untraditional nomadic business, it’s refreshing to here about one of you guys doing something similar.

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  9. Wow. I never imagined there was such a wealth of very usable info out there. Great site! By far the most useful I found so far!
    I have to admit I didn’t do very much research before leaving… But I left. Also, with the intention of not returning. Currently in Nepal, heading on to cambodia.
    Cheers, saludos, d.

  10. Amazing blog, found it whilst researching tax and living abroad

    One question you say you pay tax in the UK i thought the point of moving around for most was to not be in any one country for XX days to therefore not liable for tax in them countries

    Obviously if your renting your UK home out then you would need to do a tax return for that

    Either way just thought i would ask

    Looks fun either way

  11. Thabk you for the advice, guys! My boyfriend and I are planning on becoming digital nomads later this year, and this was just the information that I was looking for! I’ll be looking around your website more, I love the practicak posts that you guys provide also! Thank you.

    I have one little question, though. We’re planing on making money online as well, and we both have businesses registrered in Denmark where we’re from. But. Have ypu ever been asked to provide bank statements or other things like that to prove that you could finance your stay in a country? I went to the US and they were pretty strict about the financial proof… How do ou get around this, if you’ve ever tried it?

    Oh, maybe I’m worrying too much! We’ll dress up as real tourist, and no one will ever know… 😛

    Thanks again for a great blog! O love your pics, btw! Great skills.

    Safe travels!

    Celia

  12. What’s they weight of your packs? Have any airline ever bothered you about it being above the 7-10kg allowed for carry ons?

  13. I really appreciate the type of blogs you’ve been writing. We’ve traveled quite extensively but, for our next big idea of hitting the road permanently, we have a lot of questions about taxes, how to get paid, how to earn money, etc. Thanks for being an inspiration to all of us!

  14. I love these posts about the practical side of becoming a digital nomad. My bf and I are leaving the UK in 6 weeks and I’m currently sorting out freelance work contracts to earn money while we’re travelling. The problem I’m having at the moment is deciding how much work I’m realistically going to be able to do while we travel; I have no idea how often we’ll be able to get reliable internet or how many hours per week I’ll feel like sitting inside working when I could be out seeing the sights. Would you say that you’re able to get reliable wi-fi in most places in Asia (where we’ll be travelling predominately)?

    • It can be hard to figure that out- I would estimate pretty low, especially when you are starting out. Asia is generally great for wifi though so you should be OK except for really rural places. There’s a reason so many digital nomads spend time in Thailand when they need to catch up on work! Good luck on your trip!

  15. Taxes for US citizens can be a bit complicated as they depend on the state you are from as well as the federal issues. Regardless, if you are self-employed as a US citizen and you will owe some amount of taxes, you are supposed to pay “estimated” taxes to the government. There is an official site where you can set this up to automatically make payments four times each year and tax forms or tax preparation software can help you decide how much to pay, but don’t just ignore it and worry about it when the tax filing is due as you will likely owe penalties.

  16. I can totally recommend to RTW travelers to think hard about buying a RTW ticket. We also change plans pretty frequently, so it would have been too restrictive. If you try and go mostly over land, you’ll reduce the number of plane flights required, thus reducing your total airfare.

    I’m not a digital nomad yet, but I’ll probably be in the “wanna be a digital nomad” category after our trip is over. Thanks for the information to get me thinking for the future.

    ** +1 for not needing a phone, too! 😉

  17. Awesome advise you have put together. I feel like in many aspects we have developed the same habits. We never set out to open-ended travel (1 year Thailand was the original plan) but eventually we fell in love with this life-style and down-sized to just one carry-on each as well. Though we have the rolling trolley ones. Traveling has became so much less stressful with less stuff.
    I totally don’t miss having a phone, never liked it in the first place, but the iPhone is practical for so many other things. And Skype for everything else, indeed!
    I am little relieved to hear we are not the only ones not fully having figured out the tax thing. And we have the same hope of one day (soon) getting advise from a professional on this.
    I really enjoy your informational posts 🙂

  18. Excellent, helpful advice – I’m not at the stage where I won’t be bringing so little with me, but I’m getting better and better at cutting stuff out. It doesn’t help I’m quite tall and need a long rucksack for good back support (therefore automatically making it large)…

  19. Thank you very much.
    A lot of clearly presented information. Not yet a Digital Nomad, but it clarify a lot of things a man can never yet had to think about this part of life.

    Greetings to both of you, Simon and Erin !

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