Have work, will travel: Why Estonia wants digital nomads

Tiny Estonia is wielding an unlikely weapon in the fight against the economic damage caused by coronavirus: immigration law.

On Wednesday, the Baltic state will launch a “Digital Nomad Visa,” which it hopes will help it recover from an expected recession and boost its growing credentials as a bureaucratic innovator.

“One of the goals is to promote Estonia in the world,” said Ruth Annus, head of the interior ministry department that developed the plan. “Digital nomads also use services which are taxed in Estonia, and we believe they create diversity and enrich the community,” Annus told POLITICO.

The scheme is targeting non-European digital nomads, which Estonia defines as remote-working employees or freelancers, whose job allows them to work from anywhere. To be granted the new visa, applicants must show they are making at least €3,504 per month and provide evidence, such as client lists, which prove their professional role.

The visa will allow people to stay in Estonia for 12 months, including up to 90 days of travel across Europes borderless 26-country Schengen zone. It also seeks to close a legal loophole that means many digital nomads have not been allowed to work legally in the countries they visit.

Since it broke free of the Soviet Union around three decades ago, Estonia has sought to improve creaking education and health care systems and create a more business-friendly economy.

“This is a tailor-made visa for the digital nomad community, it is unique,” Annus said.

While freelancers have often been willing to sidestep a nations ban on working, the plan could significantly change the labor market landscape for large employers who cant risk allowing their staff to break national laws.

When the details of the plan were publicized earlier this month, responses on online bulletin boards appeared to be largely positive among both freelancers and employees.

“Ive been waiting for this information since it was rumored last year,” Matt Hallowes, a South African copywriter currently based in Vietnam, wrote on the website Medium. “Unlike other countries, this process looks simple to follow,” he wrote.

Clark Jang, a Canadian government worker, said he was interested in exploring whether Estonias idea could be something for him. “A Digital Nomad Visa like Estonias gives a level of certainty not only for employees but also employers who may be reluctant to let their personnel fly the coop,” he said.

More broadly, the digital nomad initiative could prove to be an illuminating example of how the coronavirus is refashioning European economies.

On the one hand, travel restrictions imposed by countries — Estonia shut its borders during the spring — have shown that the type of international mobility that the scheme is trying to tap into is more fragile than many people previously thought.

On the other hand, the lockdowns the virus has triggered have shown a much broader swath of the working population — and their bosses — that working from home can be efficient.

If the scheme delivers the reputational and economic benefits its developers hope to achieve, it could become an example of “not letting a good crisis go to waste,” playing into broader international trends that experts say are now underway as the first phase of the crisis ebbs.

“Across industries, leaders will use the lessons from this large-scale work-from-home experiment to reimagine how work is done — and what role offices should play — in creative and bold ways,” analysts at the U.S. management consultancy McKinsey said in a recent report.

Charting its own path

Since it broke free of the Soviet Union around three decades ago, Estonia has sought to improve creaking education and health care systems and create a more business-friendly economy.

It hasnt been all plain sailing. The country was hit hard by the 2008 financial crisis and its banking sector has been under intense focus again in recent years in connection with massive suspected money laundering at Estonian branches of Danske Bank and Swedbank.

Estonias fractious relations with its giant neighbor Russia have also regularly flared into open hostility.

However, the country has been lauded for its progress with online administration and business.

In 2014, the country made headlines with its groundbreaking e-residency program, which allows people from other countries — subject to background checks — to remotely set up a business in Estonia and benefit from the countrys advanced online bureaucracy, including a highly regarded and easy-to-use system for tax returns.

Estonia has also emerged as a conducive environment for startups, helping to spawn a raft of billion-dollar businesses from the telecommunications application Skype to cross-border money-mover TransferWise.

In 2014, the country made headlines with its groundbreaking