While 2021 may promise a lot, it is likely that we’re going to be facing Covid-19 restrictions for some time.
So, if you're fed up working from home, and are unlikely to be called back to the office any time soon, how about moving somewhere sunnier to escape those coronavirus-inflicted blues? With flexible working now likely here to stay and many companies – including Twitter and Indeed – promising most of their workers that they can work from home forever, there is now an opportunity to make that "home" somewhere a little more enticing than a three-bed semi-detached somewhere in the suburbs.
Many locations around the world, including Croatia and Estonia, have introduced new visas and regimes to try to entice "digital nomads" or foreign employees to move there. They can contribute to the local economy – particularly important for some given the collapse in tourism – even if continuing to earn from abroad.
Below we take a look at what some countries are offering and question whether or not it may be too good to be true.
Greece
As European Union citizens, it’s fairly straightforward for an Irish passport-holder to move anywhere in the bloc (and even in the UK if you wish, thanks to the Common Travel Area arrangement). But some countries may appear more attractive than others.
Yes, as if the thoughts of year-round sun and feta on tap wasn’t enough to whet your appetite, the Greek government is now offering hefty tax breaks to encourage professionals to pack up their laptops and head to the Aegean Sea.
With a campaign titled “If you can work from anywhere, why not Greece?”, the Greek government voted in early December to approve a 50 per cent income tax break for the first seven years of residence as part of wider efforts to attract foreign investment. The new legislation is due to come into force on January 1st.
A big advantage of a move to Greece – apart from the weather, of course – is the low cost of living. A move to Crete, for example, could mean renting a well-located three-bedroom apartment for about €567 a month (or €189 each for three people), while a casual meal will cost about €10 and creche about €275 a month.
And then there is the tax regime.
Costas Kallideris, head of private clients with PwC Greece, says the initiative represents an effort to counter the impact of a prolonged recession, and subsequent brain drain, by attracting both Greek and non-Greek professionals and employees to either return or move to Greece to help in the economic recovery.
In Greece, tax is charged at a rate of between 9 and 44 per cent, while a special solidarity contribution of up to 10 per cent is also levied. Under the new proposed regime, however, 50 per cent of an individual’s income from employment or business activity would be exempt from Greek income tax.
Under normal provisions, Kallideris says, a salary of €100,000 would be subject to income tax at the amount of €35,900 and to special solidarity contribution at the amount of €6,351. But applying the alternative tax regime would see the tax liability slashed to €13,900 income tax and €2,076 special solidarity contribution. So an effective tax rate of just 16 per cent then on earnings of €100,000.
To become tax resident in Greece, you need to spend more than 183 days there, cumulatively and within any given 12-month period.
“An individual who wishes to qualify as a Greek resident under the alternative taxation regime should assume employment in Greece or register as a freelancer with the Greek tax authorities until the 31st of July of the year in question and file his/her application until the same date,” Kallideris says.
And if you move there, you might find that you also want to stay for retirement; earlier this year the Greek government introduced a flat income tax rate of 7 per cent for foreign pensioners who transfer their tax residence to Greece. Yamas!
Caribbean
Which to choose from: Barbados, Bermuda or Cayman Islands? If it's constant sunshine, azure blue seas and island living you're after, the Caribbean could be calling you.
Earlier this year, Barbados introduced a new regime to attract people to spend a year working and living on the island. You can buy a 12-month Barbados Welcome Stamp for $2,000 (€1,643) or $3,000 for a family and if your sojourn works out, you can also reapply after this period. And there is no rush to decide.
According to Darren Ellis, a spokesman for Barbados Tourism Marketing, the "programme is here to stay with no end date in place".
He says that some 3,334 people have already applied for such a stamp from 2,008 individuals or families. Families make up more than a third of all applicants with most (66 per cent) in the 26-45 age group. But it seems it’s attractive even for those coming to the end of their working life, with 66 applicants coming from the over 65 age cohort.
Most of those looking to move to Barbados come from either the United Stated, the UK or Canada but there have also been a significant number of Irish applications. According to Ellis, 51 Irish applicants have successfully been approved to date.
To qualify, you’ll need to show proof that you can earn $50,000 (€41,024) or more a year as well as evidence that you have private health insurance.
The authorities say they can process a visa within five working days. If you’re bringing your family, the children can attend local schools for a “small stipend”.
While taxes may still be substantial, you could save on a lower cost of living. According to Numbeo, rent on the island is about 53 per cent lower than in Ireland at about €1,352 a month for a three-bed apartment outside the main urban areas.
Bermuda is also looking to attract people to work and live on the island. Its regime began on August 1st, costs $263 (€216) and is renewable on a case-by-case basis.
Again, you will need to have private health cover and should also have “substantial means and/or have a continuous source of annual income” to qualify. You will have to file a separate form – and pay a fee each time – for your children but they can attend local schools.
Cayman Islands is also in on the act and is running the Global Citizen Concierge Program that gives digital nomads a visa of up to two years. It is looking to attract a more upscale clientele, however; you'll need to make a minimum of $100,000 (€82,030) a year or $150,000 if married and $180,000 if married with children. You'll also need health insurance for the first 30 days – after that you can buy it locally.
You’ll also need to show proof that your employer is in a different country. The application fee is $1,469 plus $500 for each dependant and applications will take three to four weeks. Unfortunately, moving to one of these attractive tax locations is unlikely to boost your pay cheque.
In Barbados, for example, you won’t pay any local tax but you will have to pay tax somewhere – Ireland. According to Deloitte, a foreign national who has been granted a Barbados Welcome Stamp to work remotely from Barbados is deemed not to be resident in Barbados under the Income Tax Act. This means that while based in Barbados you’ll continue to pay tax on your earnings where you are resident, which will likely be Ireland.
The small print
Before you pack your suitcases, remember that you may need to get approval from your employer to move abroad as a foreign employee. While Ger Connolly, employment law partner with Mason Hayes & Curran, asserts that there should be no issues in hitting the beach in Barbados if you're self employed, an issue can arise if you're employed.
This is because there can be hidden legal consequences of effectively carrying out from Bermuda the same job you previously did from your spare bedroom in Waterford. And employers may not be willing to take the risk of letting you move.
When the pandemic first hit last March many workers fled overseas either to their place of origin or holiday homes in the sun. As the summer turned to autumn, however, many employers looked for these workers to come back to Ireland.
This is because allowing workers to live and work abroad from another jurisdiction for longer than a “temporary period” can see the employee assume employment rights based on where they live.
“So the employer then has to effectively manage employment rights in 100 different jurisdictions,” says Connolly. “It has to have a temporary aspect [moving abroad] or the power [of the employer] will diminish as it rolls on.”
This can prove troublesome for an employer and it can get even more complicated. As Connolly says, “When everyone is happy, issues don’t tend to arise.” But if the relationship between employer and employee deteriorates, the waters can get murky.
“I would say to employers, ‘How would you feel about being sued in Barbados?’” says Connolly, noting that this would be an expensive and administratively difficult experience that most employers would wish to avoid.
So remember, just because your employer has told you that you can work from home forever, you may need to check that this “home” can be somewhere other than the country specified in your contract.
