Digital Nomad Visas: Why Your RCBI Firm Should Sell Them, Despite the Lower Margins

Saahil Menon
Dubai


A quickly-growing number of outward-looking governments seeking to rope in mobile talent are promulgating wallet-friendly digital nomad visas (DNVs). So far, most investment migration companies are eschewing them because they’re low-margin files. That’s a mistake.

As the European Union and the wider West turn up the heat on countries selling citizenship, residence programs are beginning to take center stage. One thing is certain: Appetites for resettlement and Black Swan contingency plan have not waned in the aftermath of COVID. Global citizens remain bent on ensuring that they are not bound to a single jurisdiction with disproportionate leverage over every aspect of their lives.

If any lesson were to be drawn from the past few years, it is that a sense of belonging in one place leaves inhabitants susceptible to unwarranted heavy-handedness on the part of their respective governments. Domicile diversification is gaining significant traction across even the most progressive nations, whose freedom-cherishing citizens do not wish to live through draconian lockdowns and overseas travel restrictions ever again.

If access to particular geographies is the goal, permits increasingly trump passports

Those who have the wherewithal to hedge their bets are no longer dithering and, instead, are actively investigating accessible and inviting second-home destinations. At the same time, prospective émigrés are not solely confined to big-ticket Mediterranean golden visas or long-winded permanent residence programs in the Commonwealth.

The ever-expanding list of countries that offer Digital Nomad Visas means that neither an astronomical budget needs to be set aside by applicants nor will they undergo several months, if not years, worth of processing time. From Southeast Asia to Central Europe to Latin America, the vast geography covered by states that now operate such initiatives renders it viable to split one’s time between different continents for a fraction of the outlay that residence-by-investment schemes entail.

Virtually anyone with a university degree and a laptop is now a potential “investor” migrant

The fact that both Portugal and Greece have launched programs tailored towards remote workers and freelancers, in addition to their already-thriving and highly sought-after golden visas, speaks volumes of how rapidly the tide has turned. Meanwhile, neighboring Spain also looks set to jump on the bandwagon and roll out its own DNV this month.

While it makes sense for tourism-dependent economies to incentivize long-term stays on their territory and make sure that recipients have a steady income stream, South Europe faces intense competition from a select few Eastern Bloc countries. Estonia was the first country to pioneer this very concept back in 2019 as a means of supplementing its phenomenally successful digitalization drive and start-up ecosystem. The likes of Hungary, Czechia, Romania, and Croatia followed suit, all of which cater just as seamlessly to the nomadic lifestyle when it comes to low living costs, exceptionally fast wi-fi, café culture, and ease of doing business.

The post-pandemic explosion in location-independent work has afforded many skilled professionals the luxury to base themselves anywhere in the world and continue to earn a living. At the same time, second passports are appealing less to HNWIs who can secure the right to remain in a specific third country instead and have no issues obtaining visitor visas given their sound financials.

In extreme cases, beneficiaries of European citizenship by investment risk having their nationality invalidated. The predominantly Caribbean programs still on the market could see their mobility strength totally upended if they face the same fate as Vanuatu vis-à-vis Schengen. Alternative residencies are a much safer bet than fast-track naturalization and do not raise any red flags while traveling or opening a bank account, for that matter. 

Contrary to popular belief, there’s plenty of money to be made from providing Digital Nomad Visa services

Most RCBI companies have thus far opted to stay away from the DNV-market, preferring instead to focus on core residence and citizenship by investment programs, which are low in volume but higher in margins. But, as any Dubai-based investment migration professional will tell you, margins on investment-based programs aren’t what they were just a few years ago. Even some of the leading firms in the business are now offering Caribbean CIP services for fees that are perilously close to dipping below the five-figure mark. Certainly, margins remain higher than for DNVs, but not that much higher; you can charge $3,-6,000 to help someone handle a DNV application from A to Z.

In reality, therefore, per-file earnings on CBI are – at most – triple what they are on DNVs. Moreover, the documentation requirements and processing times for DNVs are far less onerous for DNVs; the application package is but an inch thick rather than half a foot, and approvals are granted within weeks rather than months. This means RCBI companies can churn out DNV applications at scale. Even a small, two-person operation can file dozens of cases a month, and wouldn’t need to wait months to get paid either. Couple this with the observation that while the market sees some tens of thousands of CBI applicants each year, literally tens of millions (and likely more) are potential DNV applicants, and you’ll realize that the “there’s no money in DNV” argument is deeply flawed.

And whereas competition in the CBI market is scorching hot, the market for DNVs is still in the early stages, with plenty of opportunities for local arbitrage and high margins on service fees.

Where liberty dwells in 2023

Investor migrants, who once held an overtly Eurocentric view in terms of where they saw themselves settling down or at least buying property, are increasingly setting their sights elsewhere. Failure among many Western countries to uphold liberal democratic values during the pandemic years, coupled with the dire situation in Ukraine, has played a role in bringing about this tectonic shift: People of mobile means prefer to live in jurisdictions where they can remain unmolested by the authorities and far removed from the theatres of conflict.

To their credit, countries of the Global South have wasted no time at all in capitalizing on the relative decline of Europe’s attractiveness: Digital Nomad Visas are a noteworthy example of how shrewdly some ASEAN and MERCOSUR states have played their cards.

An overlooked market for streamlined and cost-effective residency is the creative class: Social media influencers with mass followings are among those most likely to be lured to photogenic and exotic nations with year-round warm climates. Over and above the economic benefit DNVs generate for host governments, they are conducive to putting lesser-known countries on the map as well as raising awareness of their livability.

The rule of thumb is that these visas are valid for one year and renewable upon expiry. It would come as no real surprise to see the emerging gems try and outmaneuver their European counterparts by prolonging the duration and laying out a clear-cut pathway to citizenship after a fixed number of years. Generous tax breaks are also bound to be extended to the self-employed and retirees by non-EU states.

Not only are digital nomad visas here to stay; the trend is just beginning. Expect to see dozens more of these programs open up this year as the competition for mobile talent heats up.