The rise of digital nomads can be witnessed during the Covid-19 pandemic due to travel restrictions and remote working.
The quick adoption of technology has been the key factor in this rise, making digital nomadism even more free and flexible.
It has also been predicted that the number of digital nomads will increase to one billion by the year 2035.
This article will outline what to consider when selecting a country and list the 10 best countries to register your business as a digital nomad.
What is a digital nomad?
A digital nomad is an individual with a location-independent job that is usually conducted online through the use of telecommunication technologies.
They usually work remotely from a different country than the country where their business is registered.
The most common reason why people opt for this to earn a living is due to flexibility and financial independence.
Examples of digital nomads include entrepreneurs, bloggers, writers, developers, SEO and IT consultants, and digital marketing specialists.
What should I consider when selecting a company?
When deciding which country is best to register your business as a digital nomad, you need to examine your business and assess whether the country is suitable for the kind of business you have.
To do so, you should keep the following questions in mind:
- Do you have to pay income tax on the income earned to the country your customers and suppliers live in?
- Do you have to comply with any Controlled Foreign Corporation rules that require you to disclose your banking information which could potentially impact your tax liabilities?
- Is there a Double-Tax Agreement between the company country and your resident country protecting you from getting taxed twice on your income?
- Is the country politically and economically stable?
- Can you use an established, recognized payment aggregator to handle international payments to and from the company?
1. Hong Kong
The number of digital nomads setting up their business in Hong Kong has rapidly increased over the last few years due to the country’s numerous tax advantages.
The tax benefits include 0% income tax on offshore companies compared to the 16.5% income tax rates for domestic companies.
Hong Kong also has a great pro-business environment and low barriers to entry which makes it extremely easy to register your business.
Moreover, there are fewer restrictions on foreign businesses than most countries, along with low audit costs, no sales tax, and no CFC rules to comply with.
Additionally, capital gains and dividends received are, in most cases, exempt from being taxed.
Digital nomads also benefit from access to the Chinese market due to the Closer Economic Partnership Agreement between Hong Kong and China.
Lastly, the country has many approved payment aggregators such as Paypal and Stripe.
You can learn more about incorporating an offshore company in Hong Kong here.
Singapore attracts strong trade and investment opportunities due to the number of benefits of registering a company there as a digital nomad.
Firstly, the country offers numerous tax benefits that are ideal for a digital nomad.
This includes several tax incentives for companies, no corporate gains tax, and start-ups not required to pay some taxes for the first three years of business.
Additionally, the country offers a convenient company incorporation process, a wide range of banking facilities, a large market for investors, and a stable economy with the GDP being higher than most developed countries.
Registering your business as a digital nomad in Malta is an attractive opportunity as the tax rate can go down to 5% after applying all the grants and tax relief programs offered.
Additionally, digital nomads can benefit from the multiple banking opportunities and trade agreements with the EU.
Malta is also the cheapest country to get a transferable business license in the European Union (EU).
Lastly, there are no exchange controls imposed on companies registered in Malta.
Andorra’s new digital nomad law gives rise to greater investment opportunities, sustainability, and innovation to remote and digital businesses.
Not only is Andorra going through a major digital transformation, but the country also offers political, economic, and legal security alongside a competitive and internationally approved tax system which puts the country at a huge advantage compared to other European countries.
Additionally, when registering your business as a digital nomad in Andorra, you do not need to have any local shareholders, which allows the company to be completely foreign-owned.
5. United Kingdom
The UK is one of the most advanced e-commerce markets in Europe and has attracted many digital nomads setting up their e-commerce business in the country.
E-commerce is one of the most thriving industries where a business can function completely remotely and is not impacted by the pandemic.
The company registration process in the UK is also quite simple, with a fee of as little as 12 pounds giving you access to a competitive global market.
You can also set up a remote corporate bank account through any payment service provider.
The UK also places a comparatively lower tax burden on the owners and directors of a limited company than other European countries.
Additionally, the UK is a signatory to multiple double taxation treaties, which prevent you from getting taxed on your income twice.
6. The British Virgin Islands
The British Virgin Islands are a long-standing established offshore center and have also been recognized as the most reputable country to incorporate your company compared to any other offshore jurisdiction, especially if you are an internet entrepreneur.
A major benefit of registering your company in the British Virgin Islands is that you can pair your international business company with a corporate bank account in another reputable jurisdiction.
These jurisdictions include Hong Kong and Singapore.
Most importantly, nearly 41% of offshore companies worldwide have been incorporated in the British Virgin Islands, which speaks volumes of the country’s reputation and business confidence.
Things are changing in the BVI however.
Check out these 4 reasons why you might not want to register in the British Virgin Islands.
Denmark is one of the easiest countries to register your business in Europe.
The country offers great flexibility allowing you to easily change your employment structure which ultimately reduces the costs of scaling your business functions up or down.
This makes Denmark a great option for those within the consultancy and coaching industries due to the flexibility with hiring and firing.
Moreover, the incorporation process only takes a few days, and there are no residential requirements for company management, such as the CEO and company shareholders and directors.
Lastly, registering your business in Denmark as a digital nomad offers you flexibility and many tax benefits.
The biggest advantage for setting up a business as a digital nomad in Norway is that a corporate bank account and a business can be incorporated completely remotely, eliminating the requirement to travel to Norway.
It is a common misconception that because Norway is not a part of the European Union, the country is disadvantaged.
However, the country still holds unrestricted access to the EU market as a member of the European Economic Area (EEA).
Moreover, all communication with the government can be done digitally.
Additionally, it is one of the wealthiest and most financially, economically, and politically stable countries globally, taking into account the Covid-19 pandemic.
Belize has been recognized as one of the most tax-friendly jurisdictions globally that offer asset protection through offshore banking.
The numerous benefits of registering a company as a digital nomad are guaranteed privacy and confidentiality, financial stability, and international banking.
It only takes 1-2 days to register a company in Belize along with a remote corporate bank account.
10. New Zealand
New Zealand is also considered to be one of the easiest countries to conduct business activity.
The number one reason why is that incorporating your business only takes one day, along with registering property in two days.
Additionally, the labor costs are low, although the workforce is highly qualified.
The tax benefits include no payroll, capital gains tax, or social security tax, allowing you to retain profits.
Despite the country not being assumed as a traditional offshore center or a specific country to register your business as a digital nomad, it still provides all the advantages of an offshore jurisdiction.
Additionally, New Zealand is not perceived by the OECD as a ‘harmful tax jurisdiction’ as it does not have a negative business reputation in terms of offshore banking.
There are also no foreign exchange controls in New Zealand, except for approval for specific investment types.
Here is what you should keep in mind:
- A digital nomad is an individual with a location-independent job that is usually conducted online through the use of telecommunication technologies.
- Where you register your company as a digital nomad is extremely important and depends on the type of business you have.
- There are a number of factors to consider when deciding where to register your company as a digital nomad.
Register your company in Hong Kong with Air Corporate and get to business quickly so you can start your nomadic journey.
Focus on your business. We take care of the rest.