Talking legal: Freelancing reality behind Digital Nomad Dream
Not so long ago it was cool to ditch careers and go backpacking for a year or two, find your true self and go for a new job. This ‘gap year’ (or more) became particularly infamous among recruiters, but they can relax now, it’s sliding into oblivion. Here we come, the Digital Nomads, or Nomadic Entrepreneurs. The chosen ones, always on the road, squandering our easy-come money from freelancing (ok, some of us do). Nevertheless, we have to pay taxes and somehow relate to all the regulations, registrations and other bureaucracy, just as in-situ entrepreneurs do.
If you heard it takes one day to legalise your plan and that’s it, you haven’t heard the whole truth. There are a few issues which— if underestimated at first— might get you into trouble if they come up while you’re merrily settling down some thousand kilometres away from your tax office or your bank (sorry, thinking that nowadays you can deal with everything online is kinda pie in the sky). However, taking your time to consider the few points below is sure going to save your nerves.
1. Correspondence address
Since it’s virtually impossible to receive all your mail electronically, make sure there’s somebody you can trust with your mailbox and updating you on any important letters, especially from financial institutions (mind that not answering their enquiry on time might bring up high fines). To save yourself the trouble for a little fee, you can ask the post office to redirect your incoming mail to a different address (e.g. your parents’ or your friend’s). Besides, there are a number of online post offices that offer scanning your physical mail and sending a pdf right to your e-mail (the service may be a bit more costly than your parents’, though ;)).
In most cases, running your books doesn’t require any accounting experience, but it’s a good idea to hire a pro for your first periodical, and then annual statement. Arrange for picking up the document in person so that you can examine it on the spot and ask for explanations, e.g. How did you count this? How do I deal with foreign currencies? What expenses can I count in? Should I go VAT? But before you meet the expert, visit related forums, read popular FAQs and make a detailed list of all your doubts. Don’t be afraid to drill deep – the service is not going to be cheap, so enjoy it to the limit!
3. Health Insurance
Some countries have somewhat complex health insurance policies. Waiting until ‘reminded’ to choose your scheme (if any choice offered) is not going to save you any money since the ‘reminder’ usually comes with a call to settle up for the past months, and… well, ouch! (Been there, done that…) Some governments count your rate by your income, and some impose fixed amounts—it’s a good point of reference when deciding where you want to register your business activity. The good thing is that most EU health insurance cards are issued in the European format, so you don’t need to bother about any extensions within the community.
4. Pension scheme
This supposedly far-flung projection might slightly spoil the mood if you’re almost there, totally untroubled, generating income by typing in cosy cafés all over the world. As much as you can shove it away as a personal matter in a few cases, some countries make it compulsory for everyone (or for particular professions), so it’s important to make sure which category you fall under before setting off, in case you need to opt for a scheme. Otherwise, depending on a country, you might be assigned one at random, which usually means there was an option to pay less, but since you didn’t apply… Alternatively, after a year or so, you might be surprised with a monition to cover the pent-up rates, possibly accompanied with a fine for shunning.
5. Catch-22 and other nomadic slip-ups
Sadly, national laws combined with international regulations fill the nomadic jungle with easily overlooked traps. Just to give you a clue: for instance, if you register your stay (even a temporary one) and provide services in Italy but try to pay taxes elsewhere, you’re simply messing with the devil (my sad story). Or, a Germany-based freelancer’s income shouldn’t come from a single contractor. Countries tend to be whimsy in their crafty ways, and as a freelancer-entrepreneur, you must always (but always!) tax-check a foreign contract before signing it, and make sure to be aware of all your freelancing exclusions and limitations.
6. My signature needed, and I’m not there…
Governments and financial institutions crawl in their legal mazes, and it’s better to be prepared for a signature-needed call to action. You can usually (but not always) put it off by informing the bugging body you’re away. One way or the other, even a detour means changing your plans sooner or later, plus extra expenses. Fortunately, it’s possible to authorise another person (I ‘use’ my Dad) to represent you. Such a ‘trick’ can be played at the notary’s office (it’s a legal service, so be prepared for a legal-like fee, though). Well, better safe than sorry, and travel with the untroubled mind.
7. Carrying around employment certificates, diplomas and other documents
At some point of your nomadic career, you might be asked for a sworn (certified, official, notarized) translation of your certificates. First and foremost, remember that in many cases translation is considered certified in a given country only if done by a translator sworn in that very country – so travelling with documents already translated might not be the way. Secondly, scans or any other physical copies cannot be translated with certification. If you don’t feel like carrying around the original documents (which seems clever), you can always go for legal copies which, at least theoretically, should be treated as their original equivalents.
Sorry… I do realise it might feel demotivating when you find out that, instead of a well-lit path leading smoothly to your freelancing dream, there are follow-up procedures and unresolved legal doubts. Go through it, and your pains will be your reward. Take it step by step, ask excruciatingly precise questions (because red-tape answers hardly ever come without bugging and digging), and don’t throw yourself on international contracts if you don’t know the law. Check it out, make a few calls. You’re right to be pissed off now and then. Breathe in and out. Decide.Share this: