The term digital nomad is not a concept derived from the pandemic, as it had already been coined in 1997 by the authors of the book of the same name, Tsugio Makimoto and David Manners. However, it did become popular with the pandemic.
Digital nomads are people who choose to work outside their home countries and may do so as freelancers or as subordinate workers for a company. In addition to traveling with the office on their backs, they sign up for longer stays than a vacation, often having to deal with scheduling issues. However, the time difference is often an advantage for them.
It could be said that they are high-profile workers (independent or subordinate) with incomes equivalent to that profile that allow them to afford the costs of living in the countries where they travel to provide their services.
In Central America, Costa Rica is the only country that has issued a law on the subject, the law number 10008 of August 11, 2021, called “Law to attract remote workers and service providers of international character (digital nomads)”. This law grants these persons, if they comply with the requirements established in such law, some benefits; among others, of migratory nature by granting them a special status, no tax payment during the time of authorization of the permanence since they are not considered habitual residents for tax purposes and the income, they receive from abroad is not considered as from Costa Rican sources.
The rest of the Central American countries do not have any specific regulation on the subject, therefore, the general migratory and/or tax regulations existing in the respective countries would be applicable to these persons, for foreigners entering the country, depending on the status with which they enter or remain in the respective countries. Neither the specific Costa Rican nor the labor legislation of the Central American countries contemplates special labor regulations for the cases in which a foreigner, from our countries, renders subordinate services for a foreign entity, therefore the analysis must be made taking into account the factual elements:
- The company receiving the service is not domiciled in the country.
- The foreign worker provides the service from one of the countries of Central America, in which he/she is not a resident, given that one of the characteristics of digital nomadism is the temporary nature of the places selected to provide the service.
- If the relationship between the nomad and the company to which he provides his work is of an independent or subordinate nature.
If the nature of the service provided by the nomad is independent, without subordination, the legislation agreed in the contract signed will be applicable.
If what exists is a subordinate employment relationship, the labor law starts from its territorial application and, therefore, it will cover all those who provide their services from the national territory and here digital nomads would be included.
Even if there is, from a legal point of view, the possibility of filing a lawsuit in our countries on the part of digital nomads, it is very unlikely that this will occur, mainly due to the short stay in the countries where they move, which would have to coincide with a conflict between the parties. In addition to the above, there are other factors that would contribute to discourage the invocation of local legislation in case of conflict between the parties and these would be the non-rooting of both the nomad and the company to which the service is provided, since they are not domiciled in the country, a cumbersome procedure for the notification of the lawsuit abroad and finally, the benefits covered by local legislation would be reduced to the time the work is provided in the country.