During the Covid-19 pandemic, two questions recurred most often. The first: when will it finally end. And the second: how it will change our lives. We already know the answer to the first. To the second – not necessarily, as some of the changes brought about by spending time in quarantine (especially regarding mental health) have not fully manifested. But one change is already visible, and all indications are that it will stay with us for a long time: the ability to work remotely.
The trend, initiated during the pandemic, of performing work duties from home. The term “home office,” which sounded slightly far-fetched before Covid-19, is now a full-fledged way of earning a living. More countries have been transforming their laws to equalize the rights of people working this way, with employees performing professional duties in the workplace. It is already clear that these changes will not go away in the near (but also distant) future.
The changes taking place are generating shifts in behavioral styles. One is the birth of “digital nomads,” which refers to people who have turned the concept of the “home office” into the adventure of a lifetime. These nomads figured that since they were only connected to the workplace by an internet connection, the “home office” could really be anywhere with the internet. Instead, they can travel, move constantly, live in the most attractive places in the world – and provide services to their employers from there. The trend has become so popular that cities and countries are competing with each other to attract as many digital nomads as possible. Central European countries have also entered this race to attract digital nomads. How are they doing compared to others?
Competing with Bali
According to estimates by Think Remote Center, there are currently around 35 million digital nomads worldwide. In 2020 there were only 11 million – and the comparison of these two numbers describes in the best way the change in the work market caused by the pandemic. The average age of the digital nomad is 32. The average salary – USD 120,000. Most of them work in the IT industry, but this is also a popular choice for people who work as writers, marketing, or e-commerce specialists. Even emerging fields, like cryptocurrency, have a lot of workers living as digital nomads.
Their preferred lifestyle works on the imagination. Who among us hasn’t dreamed of spreading out a laptop on the beach in the shade of palm trees and earning a living in such a place? Even if it’s impossible to spend one’s entire life in this way, for young people, this work style appears very attractive – and certainly radically different from that of their parent’s generation. Therefore, it is expected that this trend will grow, and more and more people will decide to become digital nomads.
For digital nomads, Three Seas Initiative states have a lot to offer. Of course, they are not European versions of Bali, which is a tropical paradise with beautiful beaches, good internet speed, and a low cost of living. Most beaches in Central Europe can’t compete (maybe except Croatia) with the ones in Indonesia. The rent there is more expensive. But they have advantages that Bali can only dream of.
As members of the European Union and NATO, they are much more stable and predictable than the South-Eastern regions of Asia. And besides that, they generally offer much better quality in terms of services, health care, security, communication, logistics infrastructure, and solutions for financial and insurance markets.
The natural advantages of the more civilisationally developed European countries over other parts of the world is one of Central Europe’s great strengths in the eyes of digital nomads. But not the only ones. Many cities in the region are making a special effort to attract a new, post-pandemic category of workers.
For example, Timisoara, Romania’s third largest city. This is a medium-sized town (300,000 inhabitants) that is safe, relatively cheap, and very beautiful (its nickname is “Little Vienna”). It has a developed system of coworking spaces. In December 2021, the Romanian government even established a digital nomad visa, allowing its bearers a 12-month stay in the country. The condition for obtaining this visa is to have an income three times the average local salary (which is just over USD 800). Additionally, there is an obligation to possess medical insurance coverage of USD 30,000. With that, anyone can spend a year in Timisoara and work from there.
Different models of alluring digital nomads
Timisoara is trying to demonstrate its attractiveness, but it also has no choice – it operates in a competitive environment, and many more cities and countries are looking to attract digital nomads. In Romania alone, three other cities are vying to attract digital nomads. Bucharest, as the capital, has the advantage of good plane connections with other parts of the world. It has a comprehensive system of coworking spaces and a dynamic start-up environment.
Cluj-Napoca, a city in central Transylvania (the birthplace of the fictional Count Dracula), is also looking for its opportunities. The city allures with its history, convenient location, and vibrant IT scene. Brasov, located in the heart of the Carpathian Mountains, is close to Romanian highways and the Brasov Airport, which will start operation in June 2023. It is a rising star in the Romanian start-up scene – and dreams of extending that reputation abroad.
Neighboring Romania is Hungary, which is also working to attract digital nomads. To this end, they have launched a special program: the White Card Visa, perfect for people who want to do their “home office” abroad. Only 17 countries in all of Europe have prepared such a system for digital nomads. Among them are (in addition to Hungary and Romania) Croatia, Czech Republic, Estonia, and Latvia. In the Hungarian case, you have to pay EUR 110 to get a permit to work in the country for a year, and you also have to document an income of USD 2,000 per month. You are also not allowed to work for Hungarian employers – but you get tax exemption for the first six months. Apart from that, some cities are increasing their efforts to gain their share of digital nomads. Among these are Budapest, with its coworking spaces and attractive nightlife (especially the concept “ruin pubs” is gaining attention), Szeged, with its great weather and friendly atmosphere, and Debrecen, with its large student population and cheap flats.
A different model for attracting digital nomads has been adopted by Czechia. You must pay EUR 200 for the right to stay and work in this country for up to a year. But in exchange, those wishing to do so (primarily from non-EU countries) gain the right to live in a Schengen country with a rich history and dynamic culture. They may also start working for local companies and, for instance, teaching in local schools. This definitely sets the Czech Republic apart from the rules in the countries of the region. In this country, the most attractive cities for digital nomads are Prague (which has a large community of English-speaking ex-pats) and Brno, which has a reputation as a convenient, compact town.
The specifics of Generation Z and Millennials
Yet another idea is proposed by Estonia. Tallinn started its digital nomad visa in the summer of 2020. It allows a stay in the country for up to one year at a time (plus the possibility of an additional six-month extension after your initial one expires). There is also an optional tax exemption for the first six months. Apart from this, Estonia offers so-called “e-residency”. What does it mean? It gives entrepreneurs digital access to Estonia’s e-services. It can be used to run a company online (and even declare taxes) in Estonia without living there or possessing resident rights.
In Croatia – apart from gaining access to beautiful beaches – digital nomads do not have to pay taxes for one year. Additionally, they may apply for residence permits after (not before) reaching the country. And their family member may also apply for temporary residence. All for one application fee, which costs only EUR 60 per year. The only requirement is the proper income level: EUR 2300 per month. Three Croatian cities are extraordinarily interested in alluring digital nomad communities: Split, Zadar, and Rovinj, and they are heavily investing in their internet and coworking infrastructure.
Other countries in the region also have their own ideas for attracting adventure-seeking virtual workers. But it is also important to remember that this race has only just begun. According to the survey made by the Think Remote Center, this earning model is the most popular among two quite young generations: Z and Millennials. Will this always be the case? Digital nomads will always be people around 30? Or will this way of working disappear with time? Or, put another way, will it remain a characteristic of Generation Z and Millennials?
Today, there is no clear answer to these questions – but it seems most likely that a new model will require finding affirmative answers to all these questions. In the future, the best chances for digital nomads will be those cities and states that guarantee excellent communication and transport infrastructure, are attractive places to live (in terms of tourism and nightlife), and know how to offer high-quality healthcare or financial services. The centers that manage to best match these requirements will win in this global race for talent. And it cannot be ruled out that the list of these winners will be very much the same as the list leading the rankings of the world’s most modern cities and countries. Central Europe must take it into account.