Issue link: https://maltatoday.uberflip.com/i/1390871
W ith the COVID-19 pandem- ic pushing more people and organisations to shi into working remotely, physical offices are get- ting emptier, as digital nomadism is set to increasingly become more popular than ever. is new cohort of workers typical- ly falls into two camps: either freelancers and entrepreneurs, or remote workers and telecommuters. e main difference is that freelancers and entrepreneurs run their own busi- nesses while remote workers and tele- commuters are employees for a com- pany. e benefits of being a freelancer or entrepreneur are that you can truly make your own hours and choose the work you want to do. Remote workers and digital nomads are less motivated by money and would rather accept a pay cut than give up their flexibility. What this means for employers is that they may be able to hire and retain high- ly skilled talent for less than the average price tag if they open up to the idea of remote work. With a shortage of qual- ified IT workers in Malta what are the chances that more and more employers will jump on the bandwagon and let their workers work overseas. In an ide- al world, the future workforce will have more freedom to live and work wherev- er they want to. e downside is potentially unsteady income and the constant hustle of find- ing new clients. Life as a remote worker is less about sipping margaritas at the beach than it is about actually getting real work done. Wi-Fi at the beach is notoriously unreliable and can be ex- pensive. What can Malta do to catch up on this trend of experienced workers. e answer is the recent announce- ment of Residency Malta Agency, in col- laboration with Identity Malta Agency, when it launched a Nomad Residence Permit. e purpose of this initiative is to offer third country nationals the op- portunity to work remotely from Malta for a temporary period, in line and in accordance with the legal framework already in place. What are the advantages of this scheme? Simply put, those who wish to work remotely from Malta for a tem- porary period of up to one year must prove they can work remotely, inde- pendent of location. ey should either work for an employer registered abroad, conduct business activity for a company registered abroad, and of which they are partners or shareholders, or offer free- lance or consulting services to clients whose permanent establishments are in a foreign country. Non-EU remote workers will be able to apply for a six- month visa and then the option of gain- ing a one-year Nomad Residence costs a mere €300 for each permit. Entry qual- ifications include evidence nomads are contracted to work remotely by a com- pany based overseas, show that they run their own business or offer freelance service to clientele based abroad. Is residence tax free? No sir. All digi- tal nomads need to pay their taxes in a different jurisdiction. Any work carried out by them for local companies would be subject to normal local taxation. Do we need such digital nomads to com- pete with local service providers? e truth is that transfer of such technology is always a plus. Digital nomads are pro- fessionals in communications technolo- gies, design, writing, photography, web programming and other professions that can be done remotely. ey relish travel and adventure, and live their lives in a nomadic fashion, roaming the globe and working in co-working spaces, cof- fee shops, and rented accommodation. While many digital nomads work with- in start-ups, these communities are not one and the same, and have slightly dif- ferent needs. Minister Silvio Schembri last month waxed lyrical about the need for Malta to attract more digital nomads. Reali- ty speaks a different truth. We are not the earthly paradise as a domicile as we rank in the Quality of Life Index' at 54th out of 59 countries. In the cat- egories of 'Leisure Options' (20) and 'Health and Well-being' (25) but Malta plummets down the list in the areas of 'Safety and Security' (43), Digital Life (46), and 'Personal Happiness' (48) and scoring abysmally in the areas of 'Trav- el and Transportation' and 'Quality of the Environment' both of which place Malta 56th out of 59. e trophy goes to countries like Georgia, Croatia and Estonia. Greece offers tax breaks and Dubai is investing in co-workers spaces and perks for digital nomads to visit. In order to apply for Malta's Digital Nomad visa, you need to be a non-EU citizen with a minimum gross monthly income of 2,700 euros (a princely sum). e relatively high cost of living in Mal- ta when compared to digital nomad favourites such as ailand can repel potential newcomers. One of the latest countries to join the list of countries competing with Malta is Romania, and it's going for the top spot in the com- petition with a minimum income of €1,100 monthly. Equally attractive is Georgia, having an entry threshold of required monthly in- come of €1600 minimum while Croatia, requires a minimum of around €2,240 per month and Estonia has a higher threshold of €3,500. Locally, the scheme has attracted some comments from an association set up to help nomads. is is named MDNA, which aims to make Malta the ideal destination for digital no- mads by offering support, information, and a range of services. e intended goals are to provide in- formation about moving to and work- ing remotely in Malta, help digital no- mads have a meaningful social impact on others. To qualify as an attractive nomad destinations Malta needs to pol- ish its image by reducing direct taxation as the cost of living is not cheap. Popu- lar destinations have a few main factors in common, namely being that they are affordable, safe, and have fast and relia- ble internet speeds. If Malta improves its own internet speeds, provides affordable social rent living space, then there is no reason that we can't top the list in the near future. The myth of digital nomads George Mangion George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island 8 OPINION 8.7.2021