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NewsMontenegro, life and business of digital nomads

Montenegro, life and business of digital nomads

European countries already offer the most diverse models for the life and business of so-called „remote workers“. The income from this new type of tourist with a temporary stay is measured in thousands of euros on a monthly basis, and Montenegro could quickly find itself at the very top in terms of its offer. As soon as all the necessary preparations are completed in state institutions…

When the COVID-19 pandemic began to spread around the world at the beginning of 2020, fewer and fewer people went to their workplaces. Except for those who were on duty around the clock caring for and treating the sick from the previously unheard of infection, the rest were more or less forced to stay in their homes. For employees whose jobs such global disruptions were not allowed to leave a visible mark, and later for the majority of workers around the world, this meant turning part of the home into an office.
On the other hand, many who were “trapped” on – by force of circumstances – an extended vacation at the time of the outbreak of the pandemic, got the opportunity to join the growing wave of workers from places that are not so physically close to their actual office. A trend that started a few years before the pandemic primarily in the information technology and communication industry, where developers did not have to be present in the office, much less work “from nine to five” to perform their work tasks, has now begun to affect other sectors.

As the pandemic continued, many workers were still unable to go to their offices. But there was something they could have done– to travel! Remote, fairy-tale areas, a sunny beach or a clearing next to a lake at the foot of beautiful mountains… All of these are places for digital nomads to work, as long as staying in another country is less expensive than working in their country of origin. They go to places where they can stay longer than three months a year, have receptive accommodation that they will rent during their stay – but can also quickly cancel it, with high-quality internet connections in the accommodation and in public places, well-organized transport, private health services and plenty of local , healthy food.
Many countries, above all well-known tourist destinations, saw this trend as a new source of income. Especially since their annual consumption is estimated at around 800 billion dollars. Some estimates show that each of the current more than 20 million migrant workers spends an average of at least $1,300 a month, or $42 for each day of their stay. A little or a lot, only this type of clientele contributes the most to local shops and entrepreneurs, especially in smaller areas. Their choice is usually smaller urban centers, with a developed telecommunications network and services, from where they can perform work tasks without problems. As they do not choose the season when they visit or stay in a destination, digital nomads are a real opportunity to reduce tourist seasonality, from which the entire Mediterranean “suffers”, as well as all the most famous destinations.

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The method of registration of digital nomads is still unknown

The potential of digital nomads as new tourists whose stay includes both work and vacation was recognized by state institutions in time. At the end of last year, the Government adopted a program to attract this type of “remote worker”, with the intention of 250 of them residing in our country in 2023, and two years later even a thousand.

However, it has not moved far from the idea itself. A fairly well thought-out action plan was adopted, but its realization was only reached after the adopted amendments to the Law on Foreigners, which enables foreigners who are employed here or perform work electronically (online) for a foreign company or are entrepreneurs to stay in Montenegro. According to this law, digital nomads now have the opportunity to work and enjoy in our country for longer than 90 days, but no more than six months in a year.
However, not a single application had arrived by mid-November. No, it is not a new wrong strategy to attract the inflow of foreign funds. This time the reason is far more bizarre – the rulebook that should define the conditions that need to be met and then the way digital nomads are then issued temporary residence permits is not ready. This means that all those digital nomads who want to live and work in Montenegro still do not have a specific document to whom and what they need to submit for the so-called “visa D” that regulates their stay for a longer period of time than the tourist one.

Another significant reason ranks digital nomads among the new priorities of all tourism workers and employees, as well as those in related activities. In addition to having a positive impact on the local economy with their stay, they often try to fit in with the host’s lifestyle and thus influence the sustainability of tourist services with their stay. For the sake of comparison, “ordinary” tourists often spend the same amount on less sustainable stays, they come in the peak season when the entire infrastructure is under the greatest load, mostly with their own transport, even with already bought or prepared food. The digital nomad will earn money outside the country in which he resides, but for that he will use its banks, its accommodation facilities, its shops, its widest range of services, for which the hosts will be sincerely grateful.
Due to all this – cheap accommodation, low cost of living, and especially urban centers that are large enough at the same time and very close to vacation spots – Montenegro has all the prerequisites to be among the ideal hosts for digital nomads. The desire for our country to follow this trend in its tourist offer was confirmed by the leaders of both business and tourism associations, as well as the state administration, so they have already started creating special programs. However, the coordination of all institutions involved in this program is still lacking, so it will obviously take some time for the first winner of a special visa for digital nomads.

And how do neighboring countries attract digital nomads? In different ways, which can be very skillfully used in the case of Montenegro.

There is the first Croatia – the top destination for digital nomads in Europe and the second in the world (after Japan), which in 2020 introduced special visas for these worker-tourists to stay there for up to a year, provided they earn around 2,300 euros per month. The processing of the request lasts from 15 to a maximum of 60 days, and for the procedure it is necessary to allocate around 60 euros. New benefits followed, among which exemption from paying income tax and, no less important, provided health care. By now, everyone is familiar with the work of the national association of digital nomads DNA Croatia, including landlords and other agencies that offer specific and numerous other services to these remote workers. Pandemic working conditions only strengthened its position, and they proudly point out that their guests choose a beach bar or a mountain lodge for their offices. Digital nomads praise it for its good weather, cultural and natural beauty, social life, health care, prices and safety. Those who want to live and work in Croatia again in this way can submit a new application after half a year.
And Serbia already offers certain solutions for the stay of digital nomads. If they are in this country for more than 90 days, then their income is subject to taxation, and they choose the payment model depending on the sector in which they work. According to the current subsidy, they can get a considerable additional discount on these obligations if they are under 40 years old. According to the Nomad List website, Belgrade ranks fourth among the most desirable cities for digital nomads to live and work in thanks to its good quality of life.

Spain’s pioneering venture

On the first day of next year, Spain opens its doors to digital nomads with unprecedented working conditions. Thanks to the new Law on Startups and Digital Nomads, this type of worker will be exempt from many duties. In addition to special visas, they also offer extension of stay for foreign students after they graduate in that country.
When it comes to the tax, it is reduced to 15 percent for all “remote workers” who receive their salary in Spain, but do not stay in the country for more than six months in a year, while for digital nomads it applies as long as they have a dedicated visa. Also, this tax can be further reduced by a quarter.

Visas are granted for a period of one year, with the possibility of extension for a two-year stay, and after that – for an additional five years. With this, Spain is the first to open the door for digital nomads to stay in one country for several years.

Bosnia and Herzegovina, like Montenegro, is quite unknown to this business community. This should not be surprising, since there are still no special conditions for the stay and work of digital nomads. The Intera Technology Park from Mostar, within the RECOOPER project co-financed by Germany, is trying to create a tourist product for this target group, which aims to help the recovery of tourism in the country. On the basis of the competition, they chose five digital nomads who stayed for one month for free, used common rooms for work and had organized free time.

Conditions for the arrival of digital nomads in countries across the European continent

Czech Republic: Stay up to one year, application 200 euros and mandatory 5,000 euros in the bank account during verification. They can apply for work with a business or freelance license, and the company they work for must be connected to the Czech Republic.

Estonia: Stay of up to one year, with the possibility of extension for six months. Application 100 euros, mandatory income of 3,500 euros per month for the first half of the year. Those who stay in the country for more than a year become taxpayers. They were the first to introduce visas for digital nomads in 2020. They also offer so-called e-residence, which allows remote workers to access Estonia’s electronic services – including banking and similar services – even though they do not have a physical residence in that country.

Finland: Stay up to six months, application 400 euros, monthly income at least 1,220 euros. The visa is valid for self-employed entrepreneurs.
Greece: Stay up to one year, with the possibility of extension, registration 75 euros, minimum income of 3,500 euros per month. They introduced visas for digital nomads last year, and according to their law, they cannot be employed or engaged in any other way in Greek companies.

Hungary: Stay of up to one year with the possibility of extension, application 110 euros, mandatory income of at least 2,000 euros per month. Their “White Card” implies a mandatory stay in the country for at least 90 days during the six-month period, but also exemption from taxes during that time. They are also not allowed to work for Hungarian companies while they have this visa.

Iceland: Stay up to six months, registration 86 euros, mandatory monthly income of 7,075 euros. Although they only “target” digital nomads with high incomes, the visa allows tax exemption during their stay in this country.

Italy: Stay up to one year, with the possibility of renewing the visa. The law passed in March of this year – like the Montenegrin law – has not yet been finalized in a legal sense. It is still unknown how much the application will cost and what is the minimum income requirement for applicants. However, it is certain that they will be intended for very experienced workers, who have harmonized their business with the requirements of the tax system in the country, who can provide themselves with health insurance and do not have a criminal record.
Malta: Stay up to one year, application 300 euros, minimum monthly income of 2,700 euros. Along with this visa was offered a promise that digital nomads would be exempt from paying taxes in this island nation if they do so in their country of origin, but it has not yet come into effect.

Portugal: Stay up to one year, minimum income of 2,800 euros per month. The details of the visa allocation are yet to be known, given that the program has only just begun. Those who work for companies outside the country get a visa.

Romania: Stay up to one year, mandatory income of 3,950 euros per month, i.e. three average gross salaries in the country at the time of application. Digital nomads must provide themselves with health insurance and not be prosecuted, and work for companies outside the country. In case the taxpayers are in another country, they do not have such obligations in Romania.

Norway: Stay of up to two years, application 600 euros, minimum income of 3,000 euros per month. Digital nomads must have at least one client in this Scandinavian country and must pay taxes.

Everyone “grabs” these specific workers, who see life as a journey – in the true sense of the word. Their money helps local businesses, a specific tourist offer and fills empty apartments outside the main season. And in order for Montenegro to succeed in taking “its share of the cake”, it would have to realize as soon as possible that success is achieved through good coordination of all those involved in this process.

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