The Challenges & Benefits of Working Remotely Abroad as a Digital Nomad

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More and more companies are becoming aware that employees don’t need to be in the office all day to be productive. By the end of 2022, over 25% of available jobs are expected to go fully remote.

The rise in remote work also coincides with the boom of the digital nomad lifestyle. When all you need for work is your laptop, you can work from anywhere you find a decent internet connection. 

But is working remotely abroad and traveling the world as rosy as Instagram makes it seem? That’s what you’ll discover in this article as we go over the challenges and benefits of the digital nomad lifestyle.

The Benefits of Working Remotely Abroad

Working remotely abroad is a different experience from your standard 9 to 5, and for good reasons. Here’s what drives people to live as digital nomads:

Better Quality of Life

Remote work allows you to work from anywhere in the world. As a result, you can move to countries with low costs of living, such as Thailand, Spain, or Mexico, where your money goes further.

For example, Steve Tresentserensky is a freelance writer and editor from New Jersey who started his remote career in 2019 and is working remotely from Croatia. He makes around $4700 from his monthly gigs and can live in Croatia for just $47 per day

Living in a country with a low cost of living also makes it easier to live below your means and build savings on the side, which will improve your financial position and ability to pay off any debt you might have, save for retirement, or position yourself for investment opportunities. 

Collect New Experiences in Different Cultures

Tim Ferris, author of the book “The 4-Hour Workweek,” has a great quote that can be applied to the remote work experience from abroad: 

People don’t want to be millionaires — they want to experience what they believe only millions can buy.”

If you were to ask people what they would do if they won the lottery, many would tell you that they’d travel the world nonstop, exploring different countries with their newfound financial freedom. Travel for many offers a sense of adventure and fulfillment, and it is a dream that (perhaps) feels far out of reach. Working remotely abroad, however, allows you to achieve all of those things without the need for a winning lottery ticket.

“Every day is exciting, and there’s always a new experience around the corner,” says Helen Barlow, a freelance translator who has lived life as a digital nomad since 2011, in an article for The Guardian. “I feel like I’m constantly on holiday, and there’s no such thing as the Monday morning blues, or the humdrum of a daily commute. 

Build a Worldwide Community of Friends

Moving from country to country may seem intimidating at first. But it represents the opportunity to get out of your comfort zone and build an international network of friends:

“It’s easy to get lonely while traveling, especially when you’re in a new place for the first time, and you don’t have any friends yet,” says Jesse Schoberg, CEO DropInBlog, who works remotely from Thailand, in an article for CNBC. “But the more you travel, the more you tend to flex that muscle of meeting locals as well as other travelers … then you can build yourself a community that makes you happy.”

The Challenges of Working Remotely Abroad

While traveling the world with your laptop can be a fulfilling experience, there are some drawbacks to consider. Here are some of the key challenges that digital nomads face on the road:

Navigating US taxes

A common misconception among digital nomads is that as long as they don’t live in the US anymore, they don’t owe taxes. That couldn’t be further from the truth, and adopting this approach could land you in trouble with the IRS. 

The US is one of the few countries worldwide that applies citizenship-based taxation. Under this taxation system, US expats (including those working remotely abroad) must file a US tax return regardless of where they live.

Read More: What is Citizenship-Based Taxation?

The good news is that you can avoid double taxation, even if you decide to establish residency in a new country overseas. The IRS has various tax relief programs, such as the Foreign Earned Income Exclusion (FEIE) and the Foreign Tax Credit (FTC), which reduce your tax liability (often to zero!). 

Forming Deep Relationships

While moving from place to place is an exciting opportunity to get out of your comfort zone and meet new people, it can become an obstacle to forming deep relationships. “Maintaining a romantic relationship with someone who has more commitments at home and does not share the same freedom is another challenge,” says Barlow. 

This is why some digital nomads decide to establish a “base” or a country they can call home and return to from their travels. It helps give them some form of stability and the possibility to form deeper bonds with others. 

A home base also gives digital nomads time to assimilate into a new culture, by learning the country’s language or becoming familiar with local traditions.

Difficulty Establishing a Routine

A routine is essential to stay organized and productive in day-to-day life. But when you’re constantly on the road, it can be challenging to establish a routine with so many new distractions, and sometimes unexpected challenges, around you:

“The inconsistency of surroundings which can make it difficult to get work done & have a normal routine,” says Ryan O’Connor, Owner of One Tribe Apparel, in a Forbes article. “A lot of places I’ve been don’t have a first-world infrastructure, and so the internet may go down for a few hours, or there may be crazy loud noises outside of your house or the coffee shop you’re working at.”

Is Working Remotely Abroad the Lifestyle for You? 

Location independence is a dream for many people who want more out of life. But before deciding that working remotely abroad is the right choice for you, it’s crucial to weigh the pros and cons first. 

If you decide to take the leap and become a digital nomad, then it’s essential not to make your trip to the jungles of Bali and forget about your US tax obligation. You can always hire a remote tax advisor (such as Bright!Tax) to handle all your tax paperwork to stay compliant during your travels.

Register now, and your Bright!Tax CPA will be in touch right away to guide you through the next steps.

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