The dream of working remotely in a new country is extremely attractive. However, to make such a dream come true and be a sustainable reality, careful financial planning and the observance of legal requirements are essential. Failure to take note of such important considerations may result in serious fines, legal issues and even a shortened adventure.
This article gives a detailed explanation of how to get a clear idea of the financial and legal aspects of living remotely in two different digital nomad destinations: Estonia and Thailand. It will explore their individual tax, health needs, visas and daily cost of living issues that define them. As a future digital nomad, one needs to understand all these facts to establish a good and legally acceptable life in another country.
Learning about the Digital Nomad Landscape
The trend of working remotely worldwide has motivated most governments to realize the economic value of digital nomads. Countries are now issuing special visas and structures to invite these self-employed experts. However, along with such opportunities, there are definite responsibilities.
Digital nomadism is impossible to do without budgeting. The Visa charges, health insurance, possible double taxation, and administrative expenses of compliance are easily added to the list.
It is crucial to have a proactive mindset toward the knowledge of these costs to have a sustainable digital nomad life. Let’s take a look at Estonia and Thailand as great spots for digital nomads.
The Reason Why Estonia and Thailand are Hotspots for Digital Nomads
Estonia is a highly digitally advanced nation in the world, and it has attracted tech-savvy nomads. Living in Estonia is attractive to entrepreneurs and remote workers since it has a low corruption index, convenient access to government services online, and revolutionary programs like e-Residency and Digital Nomad Visa (DNV) that enable founding and operating tax and legally-compliant businesses and living.
Thailand, in its turn, is targeted at different demographic: freelancers, people in creative occupations, and nomads looking for tropical weather, rich culture, and affordable standard of living. Cities such as Chiang Mai and Bangkok have high-speed Wi-Fi, developed expat communities, and developed coworking environments.
Although they are attractive, both destinations have certain regulations, expenses, and compliance aspects that are to be taken into consideration
Estonia: The E-Residency and Digital Nomad Visa Hub
Estonia is a small Baltic country that can be considered a leader in digital governance and innovations. It is equally famous because of its electronic residency programme that provides foreigners a digital identity to access Estonia’s e-services, as well as create and run companies within EU online.
Following on this digital-first strategy, in 2020, Estonia introduced its Digital Nomad Visa (D-Visa) which has greatly increased its attractiveness in the remote working market as a country with a solid underlying legal environment.
Visa and Immigration: The Estonian Digital Nomad Visa
Digital Nomad Visa in Estonia (D-Visa) allows individuals to legally and remotely work and remain in Estonia for up to one year. The following criteria are needed:
- Remote work Status: You should either be an employee of a non-Estonian registered company, a freelancer/client of a company registered abroad or a proprietor of a business established abroad.
- Income Threshold: You must show that you have a gross monthly income level of around 3,500 euros (check the current rate on official websites of the Estonian Police and Border Guard Board), during the last six months before the day you apply.
- Proof of Funds: Submission of a steady income and adequate finances.
Mostly, one should not forget that the Digital Nomad Visa is a temporary arrangement which does not result in permanent residence and citizenship.
Tax Obligations in Estonia
The tax system of Estonia is not complex. Some key factors to take note of are:
- Tax Residency: You will typically be an Estonian tax resident if you spend more than 183 days within any 12-month period in Estonia.
- Income Tax: The residents of Estonia are taxed on their global income at a rate of 20% at a flat rate. Only income that is sourced in Estonia is taxed, where in most cases due to foreign clients, digital nomads would not be taxed.
- Social Tax and Health Insurance: Provided that you become an Estonian tax resident, you can be liable for the social tax (33 per cent of the income) that can be used on the social security and health insurance of the population. But in the case of nomads who are employed by foreign organizations, you should assert your position with the Estonian Tax and Customs Board so that you do not get taxed twice.
It would be fairly advisable to consult an Estonian tax advisor, so that your tax situation is fully compliant.
Medical needs in Estonia
The aspect of healthcare is an imperative budget item. Estonia is a country with universal health care that is paid by social tax.
- Public Healthcare: Access to Estonian Health Insurance Fund (EHIF) is usually restricted to people gainfully employed in Estonia.
- Private Health insurance: Comprehensive health insurance is a general requirement by D-Visa holders who are not Estonian tax residents, or not partaking in the social security system, during the time of the visa.
Adequate insurance of health is not only a legal stipulation but a mandatory safety net.
Cost of Living in Estonia: Budgeting for Baltic Life
Estonia is cheaper in comparison with Western European capitals but more expensive than in some eastern European cities.
Accommodation:
- Tallinn (City Centre): 1 bedroom apartment: 500-900 euros per month.
- Tallinn (Outside Centre): 350- 650 euros per month.
- Utilities (electricity, heating, water, internet): About 100-200 euros per month.
Food:
- The prices of groceries are affordable (costing 50-80 euros a week per individual).
- Dining out: a cheap eat out meal costs 10-15 euros; an average dinner with 2 people at a restaurant costs 50-70 euros.
Transportation:
There is great free or low-cost public transport in Tallinn and registered residents also have good access to it. Non-resident monthly pass is about 30 euros.
Thailand: The Land of Smiles for Remote Workers
Thailand offers good combination of exotic adventure and comfortable lifestyle, particularly in cities such as Chiang Mai and Bangkok. Although it has never had a remote worker visa, the recently released Long-Term Resident (LTR) Visa is a major step towards making its digital nomad attractiveness more official.
However, navigating the visa system with local rules should be followed carefully to avoid getting into trouble.
Visa and Immigration: LTR Visa and Other Options in Thailand
Thailand visa landscape for digital nomads has changed. Most people had used consecutive tourist or education visas in the past, the Long-Term Resident (LTR) Visa is the most useful new one for legitimate remote work. To be eligible, an individual needs to be a highly-qualified employee in the company of a foreign country or a distance employee with achieved income.
Alternative Visa Types (Less Appropriate):
- Visitor Visas (60-day renewable once by 30 days), but they are not working visas.
- Language study (Education Visas (ED Visa)) education visas permit study and longer-term stay, but working is strictly forbidden.
It is unlawful and dangerous to depend on them to work remotely.
Tip: The LTR visa provides a long-term solution. It is also important to make the right visa decisions to avoid legal problems.
Thai Taxation
Individual taxation in Thailand is conceived in residency and source of income.
- Tax Residency: You are usually taxed if you reside in Thailand for 180 days or more in any calendar year.
- In the case of Tax Residents: the Thai tax residents are charged on their global income. When you become a tax resident, any income brought into Thailand has to pay Thai income tax.
Healthcare Requirements in Thailand
Thailand has a relatively good healthcare system with both government and private hospitals, particularly in the major cities.
- Public Healthcare: It is offered mainly to the Thai citizens as well as those who are formally employed in Thailand and make contributions to the social security.
- Private Healthcare: Majority of the digital nomads choose to use the private hospitals as they are of high quality, and have English-speaking doctors and nurses. However, the services are expensive.
- Health Insurance: The LTR visa demands either a health insurance (USD 50,000 cover) or a deposit of USD 100,000. To others, it is very advisable to take an all-inclusive international travel insurance that may cost between 30-150 Euros per month.
Cost of Living in Thailand: Affordability in Southeast Asia
Thailand is considered to be cheap, especially in the non-prime locations of Bangkok.
Accommodation:
- Bangkok (City Centre): A one-bedroom apartment: THB 15,000-THB 30,000 (approx. USD 400-800) per month.
- Chiang Mai: between THB 6,000 and THB 12,000 (roughly USD 160 and 330) per month to rent a one-bedroom apartment.
- Utilities (electricity, water, internet): About 1,500-3.000 (approx. 40-80) Thai baht per month.
Food:
- The street food is extremely affordable (THB 40-THB 80 / USD 1-2 per meal).
- Cheap meal in a restaurant: THB 100-THB 200 (approx. USD 3-5).
Transportation:
Bangkok has excellent public transport (BTS, MRT). Tuk-tuks and taxis are widely available.
Key Takeaways for Budgeting and Compliance
There are some general rules of budgeting and compliance that apply to any digital nomad who might want to live in another country:
- Legal Visas: Do not work on an inappropriate visa. You should always select a visa type that directly authorizes remote employment or the possibility of a long-term legal residence.
- Know Tax Residency: The days in which you stay in a country may trigger tax residency, meaning that you will pay taxes on your global income. Seek expert tax guidance both at home and in the country where you want to go.
- Mandatory Health Insurance: International health Insurance is compulsory. Make sure that your policy covers your destination country, repatriation and other activities you intend to take part in.
- Unexpected Cost Buffer: Include the costs of applying for a visa, consultation fee of a lawyer/tax adviser, emergency travel expenses, and exchange rates. It is very prudent to have a financial cushion of 3-6 months’ cost.
- Investigate Cost of Living Carefully: Do not just look at average prices. Explore costs of groceries and the favorite leisure activities.
Conclusion
The experience of a digital nomad in Estonia or Thailand is amazing. Each of these has its own strengths: Estonia offers easy legal channels, built digital infrastructure, and European reliability, whereas Thailand is cheap, culturally rich, and has a thriving remote working community.
With a careful study of the visa needs, knowledge of taxes, sufficient healthcare arrangements and careful planning of all cost-of-living variables, digital nomads can turn the fantasy of living and working in these foreign countries into a safe and rewarding experience.
