What effect does the government expect by attracting digital nomads?

What effect does the government expect by attracting digital nomads?

Uruguay joined this week the group of 50 nations that provide a legal framework for the arrival of digital nomadsa government measure that is included in the need to attract talent, especially technological, to consolidate the country as a innovation hub.

The residence permit for digital nomads is intended for people who work for companies based abroad or on their own account, and allows them to establish themselves in Uruguay for a period of six months, extendable for another six months. In case they decide to stay permanently in the country, they must apply for temporary or permanent residence.

Alexander Ferrarigovernment agency investment manager Uruguay XXI in charge of promoting this new legal framework, stated in dialogue with scope.com that beyond the fact that some digital nomads may choose to settle in Uruguay -which would make them remote workers- “the main objective is to attract this highly qualified talent and that in addition to carrying out their work from Uruguay abroad, they can also learn about the country, tourism. “Uruguay has always been a very open country and we believe that this benefit goes in that direction”, he assured.

In the last five years, the migratory flow to Uruguay increased considerably, with a very accelerated effect in the months after the Covid-19 pandemic. As an example, in the last decade the country granted 79,840 definitive permanent residences to foreign citizens of Mercosur (close to half came from Argentina).

“This initiative will allow us to have a record and data to work on because we currently do not know how many digital nomads there are in Uruguay, since they enter as tourists,” said Ferrari, who also highlighted the interest of investors in the existence of this type of benefits in the country.

The most common positions held by digital nomads are linked to marketing, software development, design, e-Commerce and content writing, he detailed.

Attraction of talent to Uruguay

The arrival of digital nomads represents, for the government, one more step in its talent attraction agenda that allows the country to consolidate as a pole of innovation in Latin Americaa process that began with the establishment of large technology companies such as globant either Free marketthanks to the regimes of service free zones.

“We see that other countries are moving in this direction, giving possibilities to digital nomads and we did not want to be left out of that possibility,” said Ferrari, who stressed that the provision “is a way that we devised to support talent law efforts who is in Parliament”.

At the end of last year, the Executive presented a project to encourage the establishment in the country of technicians and professionals from the information technology (IT) sector, with the aim of responding to the growth in the offer of positions in this heading that clashes with a labor gap of 3,000 positions, according to data from the Uruguayan Chamber of Information Technologies (CUTI).

In this way, it proposes some initiatives that seek to attract, above all, technicians, testers, database administrators and data architects; and experienced professionals at senior and semi-senior levels. Among them, some tax provisions stand out.

For example, technicians and professionals who move to Uruguay with work contracts in a dependency relationship with companies with regular and permanent activity may choose, in relation to work income, to pay tax on the Non-Resident Income Tax (IRNR) and not be included in the local pension system.

There are currently 35 million digital nomads in the world, according to data from the World Economic Forum and that number is expected to grow exponentially in the coming years, as a result of the new habits incorporated after the pandemic.

In the United States alone, in 2022, some 72 million people planned to become digital nomads in the next three years, according to a report by the US business platform MBO Partners.

Source: Ambito

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