The Digital Nomad Lifestyle

Posted on April 7, 2024April 9, 2024 by Angie Weinberger

A wall full of globes in different sizes.

Are Digital Nomads the Same Old or a New Breed?

Contrary to what many might think, the term “Digital Nomad” isn’t an invention of the 21st century. The word was first introduced in Wiley’s homonym book “Digital Nomad” published in 1997. However, until recently, people tended to connect this denomination with names of fancy Facebook groups or forums where a small number of privileged and techy professionals were allowed. Until ten years ago, the typical graduate who entered the workplace would be shown their desk and tied to it afterward.

If, on the one hand, a few digital-first companies were already offering the possibility to work flexible hours and/or from home, on the other hand, most employees could not even dream of working from a paradisiac location ten thousand miles away from the company’s office.

Digital Nomadism has become a real working trend, and it is becoming increasingly appealing among Millennials, who will make up 75% of the global workforce by 2025, according to Inc. With this data, it’s easy to see that we’re dealing with a new breed, not a restricted circle of tech-savvy gurus. At this point, it’s also easy to predict that the rise of this category of workers will also have a substantial impact on Global Mobility policies. You probably want to choose a great location before embarking on your journey, so check out this resource on cities for digital nomads.

The Six Points You Need to Make Sure to Check

Ayeesha is a determined woman who works as a freelancer in Global Mobility. She recently moved to Switzerland, where she continues to work, and calls herself a “Digital Nomad.” If, like her, you too are a Digital Nomad and you’re about to or have just moved to Switzerland, this article might enlighten you on some fundamental technical issues you must be aware of in the Helvetic Confederation. Despite this article being Swiss-specific, these points are worth considering wherever you dream of living, either temporarily or permanently. This is an overview of risks we see frequently. I recommend seeking advice from specialists in individual areas for more profound advice on your situation. I’m happy to introduce you to these specialists in Switzerland.

1 – Labor Law

The labor law that applies to your case changes significantly whether you are classified as self-employed or employed. In Switzerland, being self-employed means working on your behalf, being independent, and assuming financial risk. You may decide on the type of company you build.

You will need your infrastructure, you draw up invoices in your name, you assume the risk of collection, and you work out your taxes. Additionally, you decide on your organization and your method of working. You may outsource work to third parties and work for multiple clients. Based on this employed/self-employed differentiation, the aspects concerning your work permit also vary.

It is also possible that, due to different legislations across countries, the Swiss labor inspection authorities could qualify you as an employee of your current “employer” or “client”. This can happen even when your status is self-employed or freelancer in your country of origin. If this should happen to you, you must provide further documents to the competent authorities. Based on your host country, you must familiarize yourself with the local employment law, especially if you plan to hire other people for your business.

2 – Immigration

You will probably travel often if you share the typical Digital Nomad spirit with Fatima. Even during Corona times, you will most likely travel more frequently than a traditionally employed person. For this reason, you must have the correct permits to enter and work in these countries.

If you’re an EU / EFTA national not yet residing in Switzerland and working there over eight days per calendar year, you will need both a residence and work permit. If you only work here for up to 90 days per calendar year, your employer must register you via the online registration procedure. Usually, the permission will be given. However, you can only work here for 90 days in a calendar year.

As a “third-country national,” you must know that work visas are limited to quotas and are not easy to obtain. You are not allowed to work in Switzerland while on a tourist visa. You don’t want to get into trouble with the Swiss authorities.

The permits that allow you to work in Switzerland are L, B, C, and G. They have different purposes and durations. If you want to read more details about the characteristics of each permit, check our resources at the bottom. As an expat spouse, you are generally approved when you receive a B-permit. With the L-permit, there is often a restriction. Do you feel confused? Trust me, it’s normal. That’s why it’s always best to get advice from an Immigration Specialist. I suggest you contact BecomeLocal.

You might be up-to-date already, but if you didn’t know it, some forward-thinking countries have already introduced specific visas for Digital Nomads! These visas are not for any Digital Nomads, and every country has listed its requirements and benefits, but it is worth checking them out. Up to today, the countries that offer this opportunity are Barbados, Georgia, Estonia, Bermuda, and Thailand, while Croatia is next in line. Check out our resources below to learn more about the topic!

With the Digital Nomad trend rising, Ayeesha wishes that Switzerland, too, would have this specific type of visa, simplifying the bureaucratic burden she must endure. You can find more details and updates on Digital Nomad Visas here.

3 – Personal Tax

According to Swiss federal tax law, you become a tax resident after living and working in Switzerland for 30 days or after 90 days without earning any income. In Switzerland, you are responsible for paying your taxes. You are taxed only on income generated in Switzerland and not on your worldwide income. This applies regardless of whether you’re self-employed and does not depend on whether you receive a one-time payment or a regular salary. You must learn to differentiate between your turnover and the potential salary that you are paying yourself. My most important advice is to find a good accountant like Joerg Blaettler of Winston Wolf or learn accounting with basic software such as Bexio.

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4 – Corporate Tax

If you work for an international company without an office in Switzerland, be aware that your presence could create a “Permanent Establishment” for the company. This means that the company might have to pay corporate tax. If you want to keep working from Switzerland, you should discuss this with them beforehand. If you own your own company and are registered outside Switzerland, corporate tax issues could become even trickier, and you might incur double taxation. Treaties have specific clauses depending on the countries involved, and you will have to look at your particular situation.

5 – Social Security

For Digital Nomads like you and Ayeesha, it can become challenging to ensure at least basic insurance for retirement, disability, or unemployment because social security is generally connected to the country of employment.

The first thing you need to know is that Swiss social security is based on three pillars that I will explain here briefly. The first pillar is basic insurance (old-age, survivors, disability, and unemployment insurance): this is mandatory if you are a resident and earning an income in Switzerland. If you are self-employed, you must pay the total contribution through a self-declaration made to the authorities. If you don’t do this, the rules will estimate and claim the gift, and you will incur a fine.

Let’s focus on the pension scheme. When you reach the official retirement age (64 if you’re a woman and 65 if you’re a man) and have contributed for at least one year, you can claim the retirement annuity. Please remember that the assistance is limited and calculated based on the years of contributions.

The second pillar is the employee’s pension scheme. This is mandatory and covers the same risks as the first pillar, but it’s provided by the employer instead of the State.

When you leave or give up your job in Switzerland, a vested benefits account lets you keep your retirement savings. You can look at how to open this type of account (Freizügigkeitskonto in German) with a bank such as UBS.

The third pillar is additional private savings, which you can undertake, depending on your preferences.

If you have a foreign employer who can apply for a certificate of coverage, they might be exempt from Swiss Social Security. If not, the foreign employer might have an obligation to register in Switzerland and seek a first—and second-pillar solution for you while you’re based in Switzerland.

6 Health and Accident Insurance

As a Swiss resident, Ayeesha needs to have mandatory health insurance in Switzerland. She’s entering her third month in the country, and her time to stipulate one is almost over. You have up to 90 days to sign your health insurance contract when you set foot in the country.

All health insurers in Switzerland provide the same benefits under basic insurance. However, if you want to be covered for other needs, such as better hospital accommodation, legal assistance, and so on, you need to add voluntary supplemental insurance.

In Switzerland, each person must pay health insurance premiums. The premiums are independent of the individual’s income but vary depending on age, residence, and health insurance, so you can choose the health insurance company with which you wish to take out basic insurance.

If you move to Switzerland but still work in an EU/EFTA country, you must be insured in the country where your employer is based. This also applies if you are self-employed. In this case, you can’t purchase health insurance in Switzerland. If you feel lost and need guidance in making the right choice, please email us.

As you figured out, there’s a lot on the list of items you must consider when deciding to work as a Digital Nomad in Switzerland. Having a clear vision of how everything works isn’t easy, especially if you need to understand bureaucracy in a language you speak poorly. This is why we always recommend contacting a trusted expert in the field. If Ayeesha worked it out, you can certainly do it too! And remember, it will be worth it; Switzerland ranks number 1 in the world for quality of life!

We have published “The Global Rockstar Album, ” a self-help book for managers and nomads who want to bring purpose, performance, and productivity to their work while becoming more inclusive servant leaders.