The Digital Nomad Lifestyle

Posted on February 2, 2025January 18, 2025 by Angie Weinberger

A wall full of globes in different sizes.

Digital nomads share their experiences in online communities, such as the “Female Digital Nomads” Facebook group. Members sometimes report challenges related to visa issues, personal safety, and taxation complexities. These anecdotes highlight the importance of thorough research and preparation for those considering the digital nomad lifestyle. The vision of working from picturesque locations like beaches in Croatia or huts in Estonia remains appealing, especially to Millennials. However, practical challenges like reliable internet access can sometimes dampen this idealised image. For example, attempting to log in to a Zoom call from certain regions may present connectivity issues, reminding us that the digital nomad lifestyle requires careful planning and adaptability.

Same Old or a New Breed in Global Mobility

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 afterwards. 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.

The Six Points You Need to Make Sure to Check

Fatima is a young and determined woman who works as a freelancer. She has recently moved to Switzerland from where she continues to work, and she 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 that you need to be aware of in the Helvetic Confederation. Despite this article being Swiss-specific, these points are worth considering wherever in the world you’re dreaming to live, either temporarily or permanently.

This is an offer an overview of risks we see frequently. For deeper advice on your personal situation I recommend that you seek advice from specialists in the individual areas. I’m happy to introduce 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 that you work on your behalf, you are independent, and you assume the financial risk. You may decide on the type of company you build. You will need your own infrastructure, you draw up invoices in your own 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 you work for more than one client. Based on this employed/self-employed differentiation, the aspects concerning your work permit vary as well.

It is as well 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 in your country of origin your status is of self-employed or freelancer. If this should happen to you, you will need to provide various further documents to the competent authorities. Based on your host country you really need to familiarize yourself with the local employment law as well especially if you are planning to hire other people into your business.

2 – Immigration

If you share the typical Digital Nomad spirit with Fatima, you will probably travel often. Even during Corona times, you will most likely travel more frequently than a traditionally employed person. For this reason, it’s essential that you have the correct permits to enter the countries and work there. 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 up to 90 days per calendar year, your employer will have to register you via the online registration procedure. Usually, the permission will be given. However, you can then really only work here for 90 days in a calendar year as a service provider with an EU home residence. And you need to register in the cantonal system too. https://www.zh.ch/de/wirtschaft-arbeit/erwerbstaetigkeit-auslaender/eu-efta-staatsangehoerige/meldeverfahren-eu-efta-staatsangehoerige.html

As a “third-country national”, you have to be aware that work visas are limited to quotas and they are therefore not so 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 or Lawyer. We will send you to the right contact in the Expat Hub to which you want to move. Please understand that the referral to these immigration lawyers will be made assuming you will pay them their fees. https://vialtopartners.com/insights/remote-work-evolution-unpacking-the-digital-nomad-visa

3 – Personal Tax

Based on the Swiss federal tax law, you become a tax resident after living and working in Switzerland for a continuous period of 30 days, or after 90 days without earning any income.

In Switzerland, you are responsible for paying your taxes. You are taxed only on the income generated in Switzerland and not on your worldwide income. This is regardless of whether you’re self-employed or not and it does not depend on whether you receive a one-time payment or a regular salary.

It’s important that you learn to differentiate between your turnover and a potential salary that you are paying out to yourself. My most important advice is that you either find a good accountant like Joerg Blaettler of Winston Wolf or you learn accounting with a basic software such as Bexio.

https://www.bloomberg.com/news/articles/2021-06-15/remote-work-jobs-tax-filing-nightmare-threatens-dream-of-beach-home-office

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 decide that you want to keep working from Switzerland, you should discuss this with them beforehand.

If you own your own company and this is registered outside Switzerland, corporate tax issues could become even trickier, and you might incur double taxation. Depending on the countries involved, treaties have their own specific clauses and you will have to look at your particular situation.

5 – Social Security

For Digital Nomads like you and Fatima, 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 am going to briefly explain here. The first pillar is the 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 need to pay the full contribution through a self-declaration made to the authorities. If you don’t do this, the authorities will estimate and claim the contribution, and you incur in 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 if you’ve contributed for at least one year, you gain the right to claim the retirement annuity. Please keep in mind that the annuity is limited and calculated based on the years of contributions.

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

When you take a break from or give up your job in Switzerland, a vested benefits account lets you hold on to your retirement savings. You can have a glance at how you could open this type of account (Freizügigkeitskonto in German) with a bank such as UBS.

The third pillar is additional, private savings that you’re free to undertake or not, depending on your preferences.

6 – Check the Need for Health and Accident Insurance

As a Swiss resident, Fatima 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, in fact, up to 90 days to sign your health insurance contract from the moment 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, 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 for yourself, we personally advise that you contact ExpatPartners.

As you figured out already, there’s a lot on the list of items you need to 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 don’t speak well. This is why we always recommend that you reach out to a trusted expert in the field. If Fatima 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!

Definitions

Digital Nomad

Online dictionaries such as Investopedia.com or Urbandictionary.com define Digital Nomads as individuals who are independent from their location by performing their work using “new” technologies, i.e. deriving their income by working remotely. A Digital Nomad is not required to commute to the employers’ office / headquarters to be physically present, as telecommuting is their preferred way of working. The typical digital nomad can be found in a myriad of locations, including using public co-working spaces, a home office or travelling around the globe.

Permanent Establishment (PE)

According to the OECD, it is a fixed place of business through which the business of an enterprise is wholly or partly carried on. The term includes a place of management: a branch, an office, a factory, a workshop, a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. A building site or construction site could also be a Permanent Establishment. However, tax authorities are adapting beyond this traditional definition. Overseas contractors, Short-Term Business Travelers, warehouse space, digital activities and so on could also create a PE.

Special Digital Nomad Visas

You might be up-to-date already, but in case 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 own requirements and benefits, but it is worth it to check 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 if you want to find out more about the topic!

With the Digital Nomad trend on the rise, Fatima wishes that Switzerland too will have this specific type of visa in the future, simplifying the bureaucratic burden she needs to go through.

https://expertvagabond.com/digital-nomad-work-visas/

Digital Nomad Visa

Barbados: https://www.fragomen.com/insights/alerts/12-month-remote-work-visa-introduced

Georgia: the application process is not yet up and running yet but the government is updating their website.

Estonia: https://e-resident.gov.ee/nomadvisa/

Thailand: the SMART visa program is not only but also for Digital Nomads.

Bermuda: to apply to their Work from Bermuda visa visit https://forms.gov.bm/work-from-bermuda/Apply