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Philippines: Tax-free income, 24-month visa for ‘digital nomads'?

Lawmakers working on a bill granting 12-month visas, extendable by another 12 months



ARCHIPELAGIC ATTRACTION: Filipino lawmakers are considering the new bill, known as House Bill 8165, outlining conditions for a digital nomad visa and in the process compete with 54 countries already offering similar visas.
Image Credit: Shutterstock

Manila: The Philippines is ironing out a legisltion granting 12-month visas, extendable for another 12 months, to so-called “digital nomads”, or people on “workation” – with sweeteners such as exemption from paying local income taxes.

The move, once approved, could have knock-on effects on the economy and potential cross-cultural knowledge and people-to-people exchange. Filipino lawmakers are considering the new bill, known as House Bill 8165, outlining conditions for a digital nomad visa:

  • Age requirement of 18 and above;
  • Proof of income sourced outside the Philippines;
  • Valid health insurance;
  • No criminal record; and
  • Payment of processing, visa, entry, and exit fees set by the Immigration Bureau.

Growing trend

Under the proposed legislation, digital nomad visa applicants are mandated to present a valid health insurance cover and evidence of a clear criminal record.

The move is in response to the growing trend of remote work. The Philippines is positioning itself as a competitive destination. The proposed Digital Nomad Visa aims to attract remote workers who wish to live in the Philippines while serving clients or employers abroad.

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The visa, initially valid for 12 months, offers the flexibility of a one-year extension, provided applicants continue to meet the criteria. A significant incentive for digital nomads under this visa: exemption from local income tax.

PHILIPPINE ISLAND HOPPING (clockwise from top left): A drone view of Coron island in Palawan; a coconut farm in Bicol, a region half the size of Belgium; a scene in Mahinog in Mindanao (an island more than double the size of the Netherlands); and a scene in the Banaue Rice Terraces in the Cordilleras on the main island of Luzon..
Image Credit: Pexels | Leon Macapagal | Chris Hilotin | Ferdine Drone | Max Mishin

Game changer

This could be a game-changer. Expats on nomad visa won't be taxed in the Philippines, and are only obligated to pay taxes on their income in their home country, thus providing a favourable tax advantage.

The Philippines is in competition with neighbours for tourism dollars.

This legislative move reflects the Philippines' recognition of the benefits of remote work, promoting productivity, cost savings, work-life balance, talent retention, reduced carbon emissions, and a healthier workforce.

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Broadband internet

The country has a robust and regulated fintech ecosystem, and most of its towns and cities are wired up with high-speed fibre-broadband internet. Starlink service is also now "live" across its 7,641 islands.

Starlink, with its local partner Data Lake, has been licensed to operate in the Philippines. This allows more than 7,600 islands to get broadband internet at an instant. A Starlink terminal outside a "bahay-kubo" (hut) on Mount Isarog, overlooking the verdant valley in Camarines Sur (a province in eastern Philippine bigger in land area than Dubai). Inset shows a typical speed of a stationary setup.
Image Credit: Jay Hilotin | Gulf News

As the digital nomad lifestyle continues to gain popularity globally, the visa programme positions the Philippines as an attractive destination for those seeking a remote work-friendly environment.

It also aligns with the global trend seen in 54 countries, and help boost local tourism, a major job generator, and the overall economy.

Documentation, security

There are concerns about the broad definition of “digital nomads”, prompting calls for stricter documentation and security considerations.

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The Justice Committee of the Philippine House of Representatives proposed making provisions specifically prohibiting visa holders from working for local online gaming companies.

Experts in security agencies are being consulted as the bill's details are being ironed out by a technical working group.

A scene in Camiguin, Philippines. As the digital nomad lifestyle continues to gain popularity globally, this visa programme positions the Philippines as an attractive destination for those seeking a remote work-friendly environment.
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Tourism booster

The Philippine welcomed more than 5 million visitors in 2023, a number it hopes to exceed this year (2024), with an ambitious target of 7.7 million tourist arrivals.

Francisco José Matugas II, the bill's author, emphasises the potential benefits for the country's tourism and economy.

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He observes a global rise in the digital nomad population post-pandemic lockdowns. Matugas highlights how digital nomads contribute positively by spending more than tourists, relieving public services, creating jobs, and even starting local businesses.

Who are the 'digital nomads'?

However, concerns are voiced by other legislators and foreign affairs officials regarding the broad definition of “digital nomads”, as they raised questions potential misuse, especially for online gambling company employees.

Some pointed out the bill's ambiguity and lack of specificity, expressing the need for a more refined definition.

They also underscored the importance of addressing security risks arising from misuse of the digital nomad visa, suggesting a robust verification system, and ensuring adherence to standards.

The Philippines wants to compete with 54 countries already offering a "nomad visa" system.
Image Credit: File photo
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