For Melissa Morris, the shift to remote work is paying off in more ways than one.
When her job at a company serving the natural gas and water industry went remote in March 2020, it soon became clear she wouldn’t be returning to her office near Philadelphia any time soon. That got her thinking about moving somewhere with more clement winters. She wanted to stay on the East Coast for family reasons, so she considered Florida and the Carolinas, but in the end settled on Savannah, Georgia.
The 42-year-old liked the city’s historic charm, lower costs and location near great beaches. But her move came with a bonus: a $2,000 dollar check for qualified remote workers willing to commit to living in Savannah.
Tyler Jaggers, a 40-year-old game designer, made a similar decision last fall, moving from the San Jose, California, area to Topeka, Kansas, and in the process he picked up a $10,000 payment that helped cover improvements on his new house.
“The incentive was great in sealing the deal on my move,” Jaggers said. Countries, regions and cities worldwide have long showered tax breaks and subsidies on companies to lure factories or corporate headquarters.
Now, with the Covid-19 pandemic transforming many offices into virtual networks of widely disbursed employees or contractors, a slew of locations are aiming to attract workers who are free to move.
Varied goals for offering incentives to ‘digital nomads’
“Ultimately, we very much want companies to open offices here, but in the meantime, we are building out our talent network,” said Jennifer Bonnett, vice president for innovation and entrepreneurship at the Savannah Economic Development Authority.
Sixty people have moved to Savannah under the program since the offer went live June 1, 2020, and 22 so far have received the incentive, a number that’s likely to rise since applicants must first establish residency, she added.
Savannah isn’t alone. Among other U.S. cities, Tulsa, Oklahoma, will pitch in $15,000 on condition it be used to help finance the purchase of a home in the city limits. A slew of Caribbean islands including Barbados and Montserrat are offering tax-free residency permits for so-called digital nomads, as are Croatia and Estonia in Europe. Costa Rica is drafting legislation to offer residency to remote workers, while the mid-Atlantic Portuguese outpost of Madeira has converted a seaside town into a “nomad village” with free workspace, dedicated housing and upgraded telecommunications links.
The goal of these incentives varies. U.S. cities are taking the longer view and are more interested in workers who will put down roots. Many tropical islands rushed through their residency offers to replace revenue from missing tourists and accept that those taking up their offers are transient and likely to eventually move on to the next tempting location. Estonia and Croatia are keen to cement their reputations as European digital hotspots.
“One of the aims of digital nomad visa is to make Estonia bigger in the world by having another lovely e-society project,” Ruth Annus, head of the Citizenship and Migration Policy Department of the Ministry of the Interior, said in response to e-mailed questions. “Digital nomads create diversity and enrich the community.”’
The Baltic nation routinely tops surveys of the world’s most online countries, making up for a less-than-balmy climate.
Bureaucracy slows applicants
Gonçalo Hall, a remote-work consultant who pitched the nomad village idea to the autonomous Portuguese region Madeira, is now a consultant to the local government. In pre-Covid times, Hall noted, remote workers were largely freelancers or the self-employed. Now, he estimates, the share of company employees among digital nomads has jumped to about 40 percent from 5 percent before the pandemic struck.
So far, however, those benefiting from offered incentives aren’t huge, partly because of Covid travel restrictions and partly because of bureaucratic or budget obstacles. Topeka has had 4,500 applications but has accepted only 40, according to Bob Ross, senior vice president at the Greater Topeka partnership. Because the relocation initiative’s annual budget is $300,000, the potential recipients are capped at 30 to 60 a year.
Croatia’s program to offer residency permits went live in January and only 10 people are going through the application process. Others have been deterred by a cumbersome process that involves applying at consulates, going through a background check and providing proof of medical insurance.
Still, applications are expected to jump after March 1 when applications can be done online and successful applicants can join Croatia’s state health coverage system.
“It took five months to get the main law through the Croatian government, which is actually quite fast,” said Jan de Jong, president of Croatia’s Digital Nomad Association. “We got the horse through the door. Things will start to pick up when it can be done online.”
In Madeira, there are about 300 remote workers on the island, almost all from the European Union. However, about 4,300 have registered to come, many of them Americans, Brazilians and British, who can’t legally travel there for the moment.
“When the restrictions are lifted, we’ll be flooded,”’ Hall said. “We have 600 Brits waiting to come.”
Keeping employers in the loop?
Another challenge that workers must address is to clarify company policy. When a company says its workers can work remotely, does it really mean faraway locations such as the Cayman Islands?
Morris in Savannah said her company was fine with her move from Pennsylvania to Georgia. However, Topia, which operates a platform that helps human-resource departments manage remote workers, said in a survey released in February 2021 that 28 percent of remote employees in the U.S. and U.K. worked from outside their home state or country last year, while only a third reported it to their human-resources department. Worker location could potentially carry tax implications.
Still, workers clearly want the right to work from the beach or the slopes. According to the same survey, 91 percent said they should be allowed to work from wherever they want if they get the job done.
Brian Armstrong, chief executive officer of digital-currency exchange Coinbase, wrote in a May 20, 2020, blog on the company’s website that employees can continue working remotely if they want to even after all quarantines are lifted.
When asked if that meant employees could really work from any corner of the globe, the company, through a spokesperson, declined to comment.
Gonçalo Hall, the remote-work consultant for Madeira, said employers won’t have a big say in the matter.
“Companies that try to force people to go back to the office or tell them where they must live will lose their best workers,” Hall said by video from a plant-filled veranda at one of the village’s common work areas. “Remote working is truly here to stay.”