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 whichif underestimated at firstmight 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 ;)).

2. Bookkeeping

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 amountsit’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.

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18 Responses

  1. Thank you for giving the information. It’ll help
    me bunch.

  2. Thanks for the excellent info, it really is useful.

  3. Jaimee says:

    I am really blown away by people who do the whole digital nomad thing. I have enough trouble managing my blog (just writing and keeping up with all the social medias) without having to run it like an actual business. Thanks for this post; it’s really informational and I bet these are things that people kind of don’t really think about in the beginning!

    • Hi, Jamiee! Yes, you’re right. Guess this is why I got so many haters because of this post – I’m spoiling the dream a bit 😉 A lot of people think being a digital entrepreneur means no paperwork, no taxes, no legal responsibility.

  4. A lot of these things have been on my mind lately and to be honest a lot of them I have’nt even thought about. We live in a crazy world. Some great tips here – Saving this post for future refrence.

    • I didn’t think about them when I started either, they just came with experience, or somebody pointed them out to me before I tripped (but mostly I tripped). The ‘funny’ thing is, especially within EU, there are so many issues that just can’t be solved and you need to give in, because there’s no regulation about this or that, so you might waste your time fight for your case, or you need to find a workaround.

  5. Joe says:

    Some excellent practical tips here on a side to the digital nomad lifestyle (that so many travel bloggers think they want) that rarely gets openly talked about. It’s like with any seemingly glamorous lifestyle – there’s a lot of unglamorous nuts and bolts needed to facilitate that lifestyle.

    Right now, I could probably only manage the gap year! 😉 But should I decide to give it a go, this article sure will be a big help in navigating the minefield of paperwork, that’s for sure!

    • Thank you, Joe! You’re right, the ‘digital nomad dream’ has been spreading recently and it seems like most of the dreamers think it’s enough to hit the road, set up a blog, maybe join some site for freelancers and it just flows. Total freedom: taxes and laws disappear…

  6. mario says:

    Good tips! you could probably add a few more depending on which bureaucratic entity is after you hehe!!!

  7. Angela says:

    Great post for anyone heading into the nomad world. We are not quite there yet, but planning on it in the future. The longest trip to date has been 2 months and we had issues with mail. We are thinking about the option where you can forward mail to a service and they scan everything and email it, but you’re right… that’s the more costly option.

    • I saw some offer student discounts, but still… At least in my case, since I hit the road, I convert all expenses into a possible ticket, event, new camera, etc. So whenever I find a cheaper option (and my Dad scanning my mail is one) I go for it. Btw, good luck with your nomadic plans!

  8. Jen says:

    1 and 7 are the things we’re dealing with right now. We haven’t thought about redirecting our mail to our friend’s house, maybe we should! We have soft copy of the documents but we also carry around our documents that might be needed in original form.

    • Hi, Jen! As for the mail, I was able to do it online. It lets me sleep safe and sound because an unread letter from the tax office is a real pain in the… Happened to me twice and wouldn’t like to go through it again 🙂 It’s not like ultimate tragedy, but it’s always much bigger fuss when you’re on the road, plus it usually comes with a fine.

  9. Bastien Wink says:

    Or you can just don’t care 😉

    As a nomad, I never thought about any of theses things …
    Traveling can be about getting rid of all these contraints, no one forces you anymore.

    1- I’m sure my last address in the UK keep receiving ads, but the important things come by email. And I don’t want to communicate on paper anymore (I call ecological reason, but it’s actually because I can’t receive them).

    2/3/4- I’m lucky here, my native country (france) does not ask me much and provide me with a decent coverage. A bit of paperwork to set it up, then you can forget about it forever. On the other hand I pay lots of tax for that. It might be more tricky to deal with governments who are not online yet.

    5- It did not happend to me for years.

    6- I wish I could carry a digital copy of my passport and driving licence, everything else is in the cloud. The originals are in the bin.

    There are some situation where being picky on paperwork can be a good thing, but for our lifestyle it doesn’t seem apropriate. Nomads need to be somehow minimalist and focus on what matter the most.

    • Thanks for your comment! Unfortunately, if you’re an entrepreneur you aren’t above the law just because you’re travelling. Not caring doesn’t mean not being responsible for your administrative mistakes. Of course you don’t need to care if you’re not running your own nomadic business, but this is what the article was aimed at. Your activity needs a correspondence address, what you’re talking about is pure nomadic life, not nomadic entrepreneurship.

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