๐Ÿ‡ฎ๐Ÿ‡ฉ ๐ŸŒŠ Want to pay ZERO TAX for five years? Bali, Indonesia is betting that some will find that very attractive...

๐Ÿ‡ฎ๐Ÿ‡ฉ ๐ŸŒŠ Want to pay ZERO TAX for five years? Bali, Indonesia is betting that some will find that very attractive...

Hey Everyone, this is the Wayviator Newsletter.

Itโ€™s the weekly newsletter from Wayviator.com. This week, we'll talk about the biggest, baddest, most aggressive remote worker visa announced yet, in the short history of nomad visas. Indonesia looked at the maximum stay length of the one- and two-year visas and said: "let's double that โ€” in fact, let's triple it."

This week, I wrote a piece called Remote work will revolutionize the communities that embrace it.โ€‹

If you're on this newsletter list, you probably already got the email. If you missed it โ€” you might want to check it out. It's a longer article that talks about communities. We talk a lot about individual workers and employers in the "great remote work debate". But communities and regions are also major stakeholders. Communities can ignore the remote work trend at their peril.

(It will get competitive. It will get political. But it will happen.)

How communities can benefit from the remote work trend is something I've been thinking a lot about this week, and will continue to track this year.

Hereโ€™s a preview of the remote work news we'll cover this week.

  • ๐Ÿ‡ฎ๐Ÿ‡ฉ ๐ŸŒŠ Bali, Indonesia introduces a tax-free five-year digital nomad visa
  • ๐Ÿ˜€โ˜น๏ธ Why return-to-office mandates are a dead end
  • ๐Ÿก๐Ÿ  Home-swapping platforms will rebound with a focus on remote work

๐Ÿ‡ฎ๐Ÿ‡ฉ ๐ŸŒŠ Bali, Indonesia introduces a tax-free five-year digital nomad visa

News of a country issuing a new digital nomad visa has almost become so commonplace that it's not news โ€” but this week, we have a visa announcement that provides a newsworthy set of terms. Nothing quite like this has been announced before. โ€” It's the proposed five-year, tax-free, Bali digital nomad visa.

Let's talk about 'five years'. Bali has always been a popular destination for remote workers and digital nomads. This city in tropical Indonesia โ€” the highly-populated archipelago nation between The Philippines and Australia โ€” provides sun, sand, and surf in regular quantities throughout the year, among other benefits. There is a long-standing ex-pat and remote worker community.

But up until now, a lot of people who are effectively on a "long-term stay" have been doing it in a way that is in a legal grey area. After 183 days, technically, one should become a tax resident of Bali by law. Many people avoid this net by doing "visa runs" โ€” leaving and re-entering the country at intervals to technically stay out of the tax net. They often claim to be tourists when they are actually working and earning income.

The proposed five-year visa signals that Indonesia is ready to formalize rather than criminalize something that is already happening under the radar. Countries are desperate to revive their tourism sectors after COVID, and remote workers are long-term spenders and purchasers of local services.

Most digital nomad visas allow for a maximum of a one-year stay, sometimes with renewability for two years.

By extending a five-year visa, Bali is taking on one of the biggest criticisms of the shorter nomad visas โ€” they don't allow for long-term investment in a place, and many simply aren't pathways to long-term residency or citizenship.

Now let's talk about the 'tax-free' part. First of all โ€” this is not financial advice โ€” especially if you are a US citizen. The IRS will tax your worldwide income wherever you are, with some relief from the Foreign Earned Income tax credit.

For everyone else, this is where things get interesting. Taxation is one way that countries will compete to attract workers. Here are some other ways:

  • Weather
  • Length of Stay
  • Path to residency or citizenship
  • Ease of application
  • Ease of banking
  • etc.

There will be pressure for countries to compete on all of these factors and more to attract remote workers โ€” but how much can they compete before it becomes a political issue about gentrification? There will be a balance.

With Bali introducing a five-year tax-free visa โ€” it is certain that other countries will have to compete and start to follow Bali's lead in expanding their visa offerings.

A motivated location-independent worker will likely be able to secure several long-term tax-free visas and reduce their tax burden if they so choose to. For example, they could live in Dubai half the year and Bali the other half. (Or full-time in either). The surface area of countries that allow for this "tax-free financial hack" is low โ€” but it will grow quickly just as major nations are trying to close 'offshore tax loopholes'.

๐Ÿ˜€โ˜น๏ธ Why return-to-office mandates are a dead end

I see more and more big publications talking about the remote work revolution every week. You can break down the articles into several categories. On the one hand, there are updates on information or administrative changes: a new visa gets announced, or a country relaxes its covid policy for travel.

Then there are the more cerebral pieces about "what it all means". I'm seeing more and more of these.

Tony Jamous, CEO of Oyster, published a thoughtful, high-level piece on why the return-to-office is a dead end.

I like to use a concept called the "steel man" in thinking about issues. This is where you try and characterize the opposing argument in the best light possible, being very charitable to the view you oppose, before arguing against it.

Here is my steel-man argument for returning to the office:

The remote work phenomenon is something that ultimately harms companies. Companies need to be able to manage, nourish and grow productivity by observing how people work, in a physical setting. Furthermore, there is a certain undefinable sense of shared purpose, morale, and accelerated decision-making that can only be done when people are actually collaborating in the same space and feeding off each other's energy.

Remote work also introduces a massive liability and compliance headache with employees and contractors possibly doing work in foreign destinations and unknowingly establishing a tax presence for their employers that is unauthorized and unwanted. Remote workers are naive about overall compliance and the risks they are placing on themselves and their employer by working outside of their payroll jurisdiction.

Tony Jamous disagrees with this argument (as do I). Here are some takeaways and counter-arguments from the article:

  • Hiring strategy is deeply restricted when you only hire within 50 miles of your office. Your competitors are hiring all around the world and seeking the best value for money. Who will be able to deliver products and services to the market better?
  • The best workers have already moved on and are not changing. It's simple economics. They will work for remote-friendly companies. There are lots of remote-friendly companies โ€” you can't shame them into working for you.
  • Services (like Tony's Oyster, Multiplier, Remote, and Deel) are already making it easier to employ and contract with people all around the world. Saying "we don't want to employ someone in x country because it's an administrative headache" will just soon make the employer look weak and lazy, rather than prudent.

๐Ÿก๐Ÿ  Home-swapping platforms will rebound with a focus on remote work

Skift reported that home-swapping platforms are looking to remote work as an angle to accelerate their business model.

Home-swapping, in its many forms, has been around for decades.

The idea is that instead of renting an Airbnb or short-term rental or hotel somewhere for a long stay, two groups of homeowners can simply swap their abodes. A couple in New Zealand and a couple in Canada could trade homes, and simply continue to pay their mortgages, in a way that is "cost-neutral" and makes use of that critical under-utilized asset โ€” your house sitting empty while you undertake travel.

This is not for everyone, of course, as some people see their home and its belongings as a non-negotiable, non-rentable private space that should simply be locked up during long-term travels.

I see home-swapping as one tool in the Swiss Army Knife of hospitality options that will continue to flourish as travel patterns change.

If you think that Airbnb, VRBO, and hotels have got the lock on the hospitality market โ€” think again. We're just getting started in terms of what kinds of creative travel accommodation platforms will pop up in the coming months and years.

Where previously you could generally ballpark hotel stays at 'a few days to a few weeks', and short-term rentals at 'a week to a few months', now there will be people all over the world seeking unorthodox stay lengths anywhere from one day to.......... even five years?

More Stuff ๐Ÿฟ

This week, our newsletter sponsor Insured Nomads bought Peanut, a Chrome extension product that allows you to receive annotated travel information in real-time when the extension is installed. This looks like a move to integrate even further into the buyer experience of "assessing risk while traveling", which is a complement to Insured Nomads' global health and travel insurance product.

Forbes reports that interest in remote work is 'up 556%'. If our newsletter subscription growth rate is any indication โ€” this checks out! Thanks to all our new subscribers, by the way ๐Ÿ˜ƒ.

Colombia is introducing a digital nomad visa this year.

If you haven't read it yet, check out our post on How To Become A Digital Nomad.

Dave McQuilling at SlashGear.com predicts the end of Silicon Valley's hegemony in high-tech. There are many factors influencing this prediction, including a major tech stock market correction โ€” but Dave singles out remote work as one of the straws that may break the camel's back. Northern California could be permanently past its peak as "location #1" in the high-growth business narrative.