On 29 June 2022, amendments to the Immigration Law will enter into force, providing for the possibility for third-country nationals to receive the so-called Digital Nomad visa. This visa will be available to persons who are employed by an employer registered abroad or who are self-employed and carry out their work remotely, for example, providing consulting, translation services, information technology services, etc.
The new regulation will provide an opportunity for Latvian citizens living in third countries with their civil partner or same-sex spouse to return to live in Latvia with their partner or spouse if they are employed in a profession that allows for remote work. Until now, there had been no such possibility, because the Immigration Law does not provide for the possibility for civil partners or same-sex spouses of Latvian citizens to obtain a residence permit in Latvia for the purpose of family reunification.
Latvia is the third country in the European Union to decide to start issuing Digital Nomad visas. Croatia and Estonia already issue these visas, and other EU countries are considering granting residence rights to highly skilled digital nomads.
Digital Nomad visas will be available for highly qualified professionals, who will need to prove at least six months of employment with a foreign employer or registration as a self-employed person abroad, as well as a monthly salary totalling no less than 2.5 times the average salary in Latvia.
It should be noted that the Digital Nomad visa will only entitle the holder to stay in Latvia, but not to work for an employer registered in Latvia or to receive social assistance, because, as mentioned in the annotation to the draft law, the visa recipient will not be socially insured in Latvia. However, it is not clear here how such an approach will interact with the general application of social security contributions – for example, will there be any exemption from social security contributions for people with Digital Nomad visas? As a reminder, in general, all persons who work as paid employees on the territory of Latvia pay Mandatory State Social Insurance Contributions (MSSIC) in Latvia, and in cases where the employer is a foreign company, the person must register with the SRS as a “domestic employee with a foreign employer”. The employer themselves also has the opportunity to register for the purposes of the MSSIC in Latvia and make contributions for the employee. Therefore, it is not clear, given the annotation to the draft law, whether there will indeed be exemptions for Digital Nomad visa holders. The draft law does not instruct the Cabinet of Ministers to make any amendments to the Law on State Social Insurance.
It is planned that by 1 September 2022 the Cabinet of Ministers will submit to the Saeima amendments to the Law on Taxes and Fees and the Law on Personal Income Tax, which will provide for a reduced personal income tax rate for one year for foreigners who have acquired a Digital Nomad visa and transferred their tax residence to the Republic of Latvia. Consequently, more favourable application of taxes is expected for persons who choose to become Latvian tax residents.
It should be noted that there is no provision for the right of residence to be granted to family members of the Digital Nomad visa holder, such as the spouse and minor children. If a person wants to move to Latvia together with his or her family, obtaining a residence permit will be a suitable solution.
The Digital Nomad visa will be issued for one year, with the right to apply for an extension of one year. After the two-year period has elapsed, the person will not be entitled to apply for a new Digital Nomad visa for a further six months. This means that a person will have to apply for a visa or residence permit on another basis (for example, employment with an employer registered in Latvia, founding a company or registering as a self-employed person in Latvia), or leave the territory of Latvia.