Digital nomad visas have been rising in popularity as the number of people working remotely has increased in recent years. Remote working became a necessity during the pandemic-induced lockdowns and most of us have had to adapt to getting the job done outside of the customary office environment. This shift presented an opportunity: to work remotely while travelling and staying abroad as “digital nomads” if you will.
A growing number of countries have taken advantage of the digital nomad movement by offering visas to individuals searching for destinations to visit and work from while travelling. According to Travelinglifestyle.net, around 45 countries currently offer digital nomad visas (including residency programmes), and the number is expected to grow further in 2023. Not all digital nomad visas are equal, and the requirements and restrictions for obtaining one can vary greatly depending on the country. Some countries may require a certain level of income or proof of income, while others may require a specific type of work or business. Additionally, many digital nomad visas are typically only valid for a certain period of time.
In October last year the Land of the Brave joined the growing club of countries luring digital nomads to its shores, and as such Namibia became one of the first countries on the African continent to offer the visa. The visa is issued for a total period of six months, subject to an application process, which has been streamlined to make it easy to participate in the programme. To qualify, applicants will need to show proof of income of at least US$2,000 (~N$34,000) per month plus US$1,000 for an accompanying spouse and US$500 for each accompanying child. Applicants must also complete the required application forms and provide certain supporting documentation, including certified travel documents, medical certificates, and medical or comprehensive travel insurance among others. The visa fee is US$124 (~N$2,100) and is payable upon arrival, making it one of the most financially accessible options currently available.
Nomads will however have to consider the tax implications of working in Namibia since they may be subject to Namibian income tax on the income from the services rendered whilst in the country.
Namibia is a source-based tax country, meaning income tax is levied on the basis of its source, regardless of the nationality of the person earning the income. It is a well-established tax principle in Namibia that the source of income from services rendered is the place where the service was rendered. This means that the income earned by a nomad in respect of services rendered whilst in Namibia will be regarded as from a Namibian source, and the income will accordingly be subject to tax in Namibia unless a Double Tax Agreement (DTA) provides relief from the tax. Namibia has DTAs in place with Botswana, France, Germany, India, Malaysia, Mauritius, Romania, Russia, South Africa, Sweden, and the UK. Most of these DTAs (if not all) should provide a nomad who is a resident of one of these countries relief from tax in Namibia. But each case will need to be assessed on its own merits.
Nomads who are residents of non-DTA countries will not qualify for the relief, but instead be subject to income tax in Namibia on the income earned from the services rendered whilst in Namibia. Based on a strict interpretation of the tax rules, they will also be required to register for tax and file a tax return in Namibia. The fact that the remuneration was paid or the employment contract was entered outside Namibia would be irrelevant. While it is arguably not the intention to tax nomads working in Namibia, such a notion is unlikely to hold as defence in a case where the Namibian tax authorities decide to apply the tax rules on digital nomad visa holders as they do in the case of other foreigners working in the country. After all, the country aims to economically benefit from the activities of nomads whilst in the country and for it to pursue the taxes lawfully due by nomads working in the country is not beyond imagination. The best will be for nomads to clarify their tax position before visiting the country.
While the birth of Namibia’s digital nomad visa programme is an exciting development, it is by no means expected to ignite the country’s foreign traveller numbers, and by extension the tourism industry. Recent data from the Ministry of Environment, Forestry and Tourism showed that foreign arrival numbers remain far below pre-pandemic levels with foreign arrivals for 2022 estimated to register only around a third of the number recorded in 2019.
That said, the digital nomad visa is expected to provide at least some relief to Namibia’s battered tourism industry as more overseas travellers can now visit the country on a work basis and extend their stay.
Be sure to visit the Namibia Investment, Promotion and Development Board (NIPDB) website for all the information on becoming a Namibian digital nomad and enjoy the stay.
Hugo van den Heever – Research Analyst