Advances in technology and post-pandemic shifts in working patterns have opened the world up to people who are able to do their jobs remotely. But what’s the difference between expats and digital nomads and which kind of working lifestyle would be right for you?

William Russell look at the phenomenon of digital nomads and contrast their lifestyle with that of expats to help you decide.

Re-published with the consent of William Russell 

Written by William Cooper, Marketing Director, William Russell

What are the differences between expats and digital nomads?

The terms expat and digital nomads are common place in the modern, digital world. But finding out which one is best for you requires understanding what makes the two different and which one fits best with your career path and life goals. They are both hugely rewarding yet challenging in their own unique ways. So what’s the difference?

What’s an expat?

Expats are people who relocate to another country for work or retirement. While technically the same as immigrants or migrants, expats tend to make the move to a new country on a semi-permanent basis, with the intention of returning to their home country at some point, whereas immigrants generally do not.

Expats can be of any age, from children who have moved abroad with their families, to retirees. In the past, a typical expat would be a man moving abroad for work, but now many women are expats too.

What’s a digital nomad?

A digital nomad is similar to an expat, in that they both leave their home country to work abroad. However, while expats may be expected to work on-site for a particular company, digital nomads work entirely remotely, and are often freelancers. This enables them to travel from country to country while working.

Nomads tend to be on the young side, typically in their early thirties, male and single.

Key differences between expats and digital nomads?

1/ Life goals

Expats are all about putting down roots. Moving abroad, for any number of reasons, is the catalyst for this. Whether it’s a job opportunity, marriage or retirement, an expat’s goal is to settle somewhere on a semi-permanent basis. Expats build a life, just like most people, but their lives happen to be in a different country to where they started.

A nomad’s main goal, on the other hand, is to travel and see as much of the world as possible while they are working. Even if digital nomads spend a few years in the same place, it is still with the mentality of a visitor – they never plan on putting down roots. Some nomads travel with a partner/spouse, as for them part of goal of travelling the world is getting to experience it with someone else as well.

2/ Legal status

Both expats and digital nomads are likely to require visas to legally work abroad. However, there are also visas available specifically for digital nomads. Whatever your working intentions, it’s important to check what visa you need before you go abroad, as visas can take months to process.

Working visas usually last for 5 to 10 years, after which expats can apply for residency or citizenship, meaning they can work in a country indefinitely. Retirement visas are also available in many countries if expats can prove they have sufficient income/savings.

Digital nomad visas are relatively new. With the rise in remote working during and after the COVID-19 pandemic, many countries introduced digital nomad visas as a way for freelancers and other technology-based employees to work there legally.

Digital nomad visas often require proof of employment and income. These visas can take up to a month to process, and the duration of the visa varies from country to country. Digital nomads can apply to extend their visas if they want to stay in the host country for longer, but this depends on the policy of the host country.

Country

Duration of digital nomad visa

Top 10 digital nomad destinations that offer a form of digital nomad visa

3/ Paying tax

The amount of tax expats pay depends on a variety of factors. Some countries have no income tax at all, whereas in others only income earned in that country is taxed. Some countries calculate how much tax you should pay based on how many days of the year you are physically present in the country.

Expats and digital nomads should be diligent in checking which form of taxation their host country uses, and whether they are still required to pay tax in their home country.

Digital nomads will find that it is probably easiest for them to keep their tax residency in their home country and pay taxes there, as changing tax residency each time they move is complex. Digital nomads also have the option of officially registering in a country that has low tax or doesn’t tax its residents at all.

Expats will find that their tax situation is generally more complicated than that of nomads. Unless they are moving to a country that doesn’t charge tax at all, expats will have to carefully examine what kind of tax they are required to pay, on what and when.

If an expat is a dual resident, they will need to ensure that they understand both countries’ tax laws, and if there are any double taxation agreements in place. Double taxation agreements are designed to prevent people from being taxed twice on the same income. Depending on the agreement, it is possible to claim relief on the tax in one country.

4/ Travel

Travel opportunities for expats can be limited. When moving abroad, expats go with the intention of putting down roots and making connections. Therefore, they tend to travel just on weekends and holidays, as they would if they were in their home country.

Digital nomads tend to have extensive travel opportunities. Unlike expats, they can work from anywhere in the world that has a wi-fi signal. Most digital nomads only spend a few months to a year in one country.

Many digital nomads pick their next destination according to the weather, and tend to gravitate towards warmer climates. A lot of popular expat and digital nomad destinations have a rainy/monsoon season, and nomads avoid it and embrace it in equal measure.

Some believe it detracts from their experience as they can’t see the country while working there, but others view it as an opportunity to live like the locals and experience the country the way they do. However, how the weather in various countries effects digital nomad travel is mostly down to personal preference.

5/ Social life

Moving abroad for work has become increasingly popular in recent years, leading to thriving communities of expats. Expats also form connections within their work environment. There are also digital nomad communities across the world, and nomads can make the most of shared workspaces to meet others.

 How to make friends as a digital nomad

• Don’t be afraid to speak to strangers – ask them if they know anywhere nice to eat or where they got their funky laptop case from!

• If you’re in a co-working space or cafe, the person on the table next to you made a choice not to be isolated at home – so you already have something in common

• Go on local tours or trips – not only will you get to explore the area, but its a great way to meet other people

• Use social media to find people in your area or in your next location of choice and ask for tips and ideas

• See if there are any ‘digital nomad events‘ nearby

• Enroll in a local class – this could be a language class, cooking, yoga, dancing…

• Don’t forget your existing network of friends and family – these long-term relationships are so important, particularly when you’re feeling lonely

6/ Cost of living

The cost of living has gone up almost everywhere in the world due to, among other reasons, the conflict in Ukraine, which has caused global food shortages and rising energy prices. This has made it harder for expats and digital nomads to decide on the best place to live.

Expats may have it slightly easier overall. Staying in one place means they don’t have to pay for flights to keep travelling around the world. Similarly, they won’t have to navigate the fluctuating hotel and accommodation prices that come with travelling throughout the year. However, with energy prices rising, expats may struggle if they settle somewhere with extreme temperatures, as having heating or air con on all the time will quickly get expensive.

Due to the pandemic, airlines and hotel/Airbnb owners have put up their prices to make up for revenue lost due to COVID-19 restrictions. Digital nomads may also find it hard to find the cheap flights they were used to pre-pandemic, as the rising price of fuel has caused airlines to put up their flight prices to continue making a profit.

Digital nomads will also find things get more expensive for them during tourist seasons. Locals trying to make up for profit lost during the pandemic, and tourists willing to spend money, leave digital nomads struggling somewhere in the middle. Therefore, to keep their cost of living to a minimum, digital nomads should carefully plan when and where they travel.

7/ Getting by with languages

Living a lifestyle that involves travelling to different countries fairly frequently, digital nomads can probably get by with only learning a few essential phrases of the language of their chosen countries.

Expats, on the other hand, may need to have a semi-fluent grasp of their host country’s language. As they interact with locals more frequently, and for longer than digital nomads, learning the language will help build a social life with locals as well as lessen culture shock.

8/ Looking after your health

Rather than deal with unfamiliar healthcare systems, which may not offer the standards they’re used to, many expats and digital nomads choose to use private medical services, which can come with high fees. Also, some countries require proof of health insurance as well as a visa before you can enter the country.

At William Russell, we can offer you peace of mind on your overseas adventure by providing international health insurance for expats and digital nomads.

Our health insurance covers a multitude of medical issues, including hospital costs, mental health, dental care and cancer treatments. We have a 40,000 strong network of hospitals across the globe so you can rest assured – expat or nomad – that you’ll get the best care wherever you are in the world.

What’s best for me?

Deciding on whether to become an expat or a digital nomad really depends on your job and what kind of lifestyle you want to live.

If you want to immerse yourself in a culture, form lasting relationships with locals and settle down at least semi-permanently, then the expat route may suit you.

But if you want to see all there is to see, explore every corner of the world, and live day by day then perhaps the digital nomad life is the way to go.

Advantages and disadvantages of being an expat or digital nomad:

Wherever you move, go with total peace of mind

At William Russell, we have 30 years of helping expats and digital nomads settle into their new lives overseas by providing world-class global health insurance.

Making the move to another country can be challenging. But no matter where you go, you can take one thing off your mind. William Russell offers international health insurance that can cover you for everything from minor injuries to long hospital stays, and we even offer medical evacuations to patients who require treatment in other countries.