There are several different ways of setting up your lifestyle to work remotely. While some people manage to persuade their employers to let them work remotely, others use the opportunity to set themselves up as freelancers or as a nomad entrepreneur.
Working on a global platform pushes comfort zones and brings out the best in aspiring entrepreneurs and freelancers. In the process of professional growth, it’s easy to forget the basics, such as setting up a business to become a nomad entrepreneur.
The following digital nomad business guide should get you started by pointing you in the right direction.
- 1 Digital Nomad Definition – Freelance, Remote & Entrepreneur
- 2 Setting Up a Business as a Digital Nomad
- 3 Share Your Success Story!
Digital Nomad Definition – Freelance, Remote & Entrepreneur
As an increasing number of people are adopting the remote work lifestyle, it’s become apparent that there are different methods of making the dream work. All have the same fundamental ingredients of hard work, discipline, and confidence, but differ slightly in their approach.
While each work situation is unique, let’s assess the main groups of people working remotely.
- Remote worker – an individual that works as a permanent employee of a company and enjoys geographic independence. Remote workers may or may not be limited to specific time zones, but they have the certainty of a guaranteed income and set deliverables.
- Freelancer – many digital nomads work as freelancers and independent contractors. Freelancers can work for specific projects or with retainers for several clients around the world. Freelancers typically have more autonomy than remote workers as they can pick and choose the clients to work with.
- Entrepreneur – an entrepreneur is slightly more formal, having established an operating business and taking a risk by investing financially. Normally, an entrepreneur will register a business and follow legal requirements.
Setting Up a Business as a Digital Nomad
Depending on the nature of your work, setting up a business and working as a nomad entrepreneur could be your best option. When working on an international scale and moving around, the process demands a little bit more effort.
Here are a few considerations (and tips) to get you started.
Where to Establish your Business
If you spend a significant amount of time in a specific country, then you may find it easier to establish an organisation in your home country. Doing so offers the benefits of familiarity, ease of communication, and a better understanding of the landscape.
With this in mind, there are a few other options that are suited for nomad entrepreneurs.
- Estonia – the option that we will elaborate on
- Singapore – physical presence is demanded to opening a business in Singapore
- United States – has certain restrictions and limited options
- Malta – demands an annual visit for the minimum time of one week
- Your resident country
Estonia as an Example
Estonia, in particular, offers several benefits, including an easy process. It’s a great option if you work as a freelancer or the sole owner of a company. Here are a few considerations when opening a company in Estonia, using the services of a formation service such as Xolo. Xolo offers a selection of packages, including the free version called Xolo Go, and a more extensive service called Xolo Leap.
- The initial cost to open a company through e-residency with Xolo Leap is approximately USD $355
- Opening an international bank is highly recommended for the ease of transactions. For example, Transferwise.
- An Estonia EU resident card is required for the process. It costs approximately USD $120 and gives individuals paperwork permission that all locals can enjoy. After ordering the resident card, it typically arrives within four to six weeks.
- Once the resident card arrives, it needs to be validated at an Estonian embassy and will be active within 24 hours. This is the only time that the business owner needs to be anywhere in person. It’s important to note that not every country has an Estonian embassy, and a physical presence is also required from customers wanting to open a bank account at LHV.
- Once validated, the resident card can be used to register a business. Everything else is done online.
As an Estonian company, the business will pay tax when paying dividends. If drawing a salary as a non-resident, then tax is paid to the country where you are a tax citizen.
Banks for Nomad Entrepreneurs
As a digital nomad, you’ll most likely find yourself visiting different countries around the world, paying for items in various currencies.
It’s important to open a bank account that offers the lowest bank fees and transfer costs. At first, a resident bank is useful to store funds and receive payments. As needs develop, costs can increase. As a solution, there are various banks that are known (and loved) for making easy and affordable international transactions.
Some of the best-known banks include;
- N26 – available to residents of the European Union and offers no foreign transaction fees
- Revolut – a top, international online bank with free international bank transfers
- Charles Schwab Bank – an American banking solution with no foreign transfer fees
- Monzo – a popular choice for UK citizens with competitive saving rates and free cash withdrawal
- Payoneer – an American financial services provider allowing payment from international clients
- Transferwise – although not technically a bank, it serves as a convenient borderless payment solution
With help from Xolo, you also get access to an international bank account, such as their partnering service provider, Transferwise.
Digital Nomad Taxes
Paying taxes while working as a nomad entrepreneur can be more complicated than living in a single, base country.
Once again, the Xolo Leap plan comes to the rescue by offering help to navigate the Estonian legal and taxation systems. Just another reason that it helps to invest in professional service!
Budgeting Your Travels
Living on the road demands a different budget. For example, spending three months in one location at any given point means that you’ll have to budget for a flight every quarter. There are other costs to consider such as visas, short-term accommodation rentals, etc.
Depending on where you are based at any given point, the local currency may or may not work in your favor. It’s important to consider all unexpected costs and payment methods when working as a nomad entrepreneur.
At the end of the day, it’s important to remember the value in expensing business costs. Depending on where you pay business tax, you can claim back on tax expenses and decrease your costs. Another set of expenses to consider are digital nomad gear such as laptops, hard drive and portable monitors.
Market Your Business
There are benefits to running a business within a specific community. Word of mouth spreads fast and it’s easy to monitor competitors when keeping a business localized.
Running a business as a nomad entrepreneur introduces unique demands, as well as extra benefits. Although you’re competing on a global scale, your networking opportunities and earning potential is also increased.
Make sure that you prioritize the marketing of your business. Invest in a social media strategy, attend meet-ups and respond to customer concerns.
Take Advantage of Software Tools
Running a business as a remote entrepreneur demands diligent monitoring of finances. As a micro-business on the road, this can be challenging at times. There are various software tools that serve as the perfect solution for saving time and money by making the likes of banking, accounting, and taxes easy.
Xolo is a software tool that was designed with independent freelancers and business owners in mind. They take care of all of the nitty-gritty administrative tasks and give enthusiastic globetrotters time and energy to focus on other areas of the business. When such great technology is available, it would be a mistake not to take advantage!
Keep the Business Going
Working on the road demands discipline and the ability to adapt. There are several apps that can help streamline communication and productivity. It’s worth investigating these online apps to make sure that work gets done and that the business is successful.
There are other a few key considerations that can help keep your business going online.
- Investigate a quality coworking space that offers a productive working environment
- Ensure that you have consistent internet connection with a portable internet solution
- Do you research on the city that you plan to visit to see if it is a good fit (Nomad Travels Tools is a useful resource)
- Improve productivity with the best gear, such as a portable monitor
- Stock up on essential digital nomad gear
- Invest in a trusted VPN to protect intellectual knowledge and data
Beginning the journey as an entrepreneur requires confidence and a leap of faith. If you’ve already taken the first – then well done! It’s only a matter of time when sweet rewards pop up and make the hard work worth it.
If you’re still investigating, then we hope that this blog helps guide you in one way or another. It’s important to celebrate the small wins, and we’re here to raise a glass in your honor. Drop us a message and share your success story!