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Employer of Record

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How employers of record fit into the digital nomad visa trend

Digital nomads who choose to work from anywhere (WFA) aren’t a new phenomenon.

Following the pandemic, their numbers have grown exponentially. Eyeing benefits for themselves in the trend, a number of governments worldwide have begun issuing visas to attract digital nomads to their country.

But what exactly is a digital nomad visa?

Investopedia defines it as “a document or program that gives someone the legal right to work remotely while residing away from their country of permanent residence.”

Put differently, these visas offer long-term residency permits to individuals who can demonstrate the ability to work remotely while residing in the host country. Nearly 50 nations offer a version of a digital nomad visa – Japan and Italy are among the newest on the list.

For employers and employees alike, there is an allure to digital nomadism and their associated visas, the latter, especially, coming with a bevy of both challenges and benefits.

The temptations and challenges of the digital nomad visa

These visas are tempting. For workers, the opportunity is strong to explore new places and lifestyles without sacrificing career or financial stability. Employers, meanwhile, can advertise their enablement of relocation as a perk of the job. The cost of a temporary move can be high, however, and acclimation to the local culture isn’t necessarily easy.

More pros and cons for the individual

Additional pros come into play, too. For example, inflation is increasing in various places worldwide. Because of its unevenness, depending on the destination, a digital nomad visa might be alluring for professionals seeking relief from a higher cost of living.

At the same time, consider this con: How do these free spirits of the work ensure they have a place to return once their digital nomad visas expire? It’s an honest question.

Challenges for employers

While digital nomad visas bring flexibility to employees, they bring challenges to employers. Compliance with tax laws, labor regulations, and employment contracts is chief among these challenges. Legal and logistical considerations abound, including

  • Tax withholding
  • Benefits administration
  • Local employment laws

Further exacerbating matters, the qualifications to be eligible for digital nomad visas vary depending on the issuing country. In Italy, for example, the digital nomad receiving the related visa must be “highly skilled,” whose meaning Italy’s government recently clarified.

There are additional prerequisites. For instance, the digital nomad might have to meet a certain income threshold. Or consider challenges unrelated to the rules–time zone differences, for instance. These can impact communication, collaboration, and team dynamics necessitating strategies for effective remote work management.

How does an employer of record fit into the digital nomad puzzle?

For some of these problems, help is at hand. Employers of record (EORs) offer a solution to address the challenges associated with managing remote workers in different countries. EORs act as the legal employer for remote workers, handling payroll, tax withholding, compliance, and other administrative tasks on behalf of the employer.

The flexibility and mobility of the EOR model make it well-suited to support digital nomads and remote workers seeking to take advantage of digital nomad visas. EORs enable employers to engage remote workers in various locations around the world while ensuring compliance with local labor laws and regulations.

The role of EORs in facilitating digital nomad visa opportunities

Critically, EORs provide employers with a compliant and streamlined solution for employing remote workers in different countries. They handle the complexities of international employment, giving employers the mental space to focus on their core business activities.

Employers can minimize compliance risks by taking the services of EORs: They get the assurance that remote workers are employed in accordance with local laws and regulations.

A new paradigm looms?

With more and more countries exploring visas for digital nomads, and uptake increasing, businesses would do well to at least explore how they might facilitate the employment of a more itinerant form of worker.

Innovative solutions such as the well-established EOR concept can provide the flexibility businesses may need to meet evolving demands. Supporting digital nomadism, EORs mitigate the risks and inefficiencies associated with globally distributed teams.

Want to learn more about how Multiplier can help you employ a new form of worker? Talk to our experts today!

Will Smith
Will Smith

Content Writer

Will is a Content Writer at Multiplier. With a background in technology journalism, he is passionate about busting jargon, getting to the heart of complex topics, and writing pieces you'll enjoy reading.

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