With introduction of the new Foreigners Act, Croatia has joined a global trend of regulating the status of digital nomads. Nomads of the modern, digital age are the people who use Information and communications technology for work and have the ability to perform their work from anywhere in the world, thus having the overwhelming liberty in forming their lifestyle and choosing their residence, which digital nomads tend to change frequently. In the Foreigners Act, digital nomads are defined as third-country (non-EEA country) citizens who are employed or perform work using communication technology for a company of their own or other company not registered in the Republic of Croatia and do not perform work or provide services for employers in the Republic of Croatia. With the newly introduced Foreigners Act, starting from 1 January 2021, digital nomads will be eligible to obtain a visa, allowing them to live and work in Croatia up to 1 year. After said 1 year has passed, digital nomads could extend this visa for another 1 year after a six-month physical hiatus out of Croatia. As digital nomads are usually high-earners, the idea behind these novelties was aimed to provide an attractive environment for digital nomads, who would select Croatia as their place of work and residence, thus beneficially contributing to the Croatian budget and local businesses` revenue in the process.
Said changes to the Foreigners Act are accompanied by changes of the relevant tax legislation as well. Starting 1 January 2021, Personal Income Tax Act will provide for an exemption from taxation, meaning that income earned by a natural person with acquired status of a digital nomad is not subject to personal income tax if said income derives from employment or activities for an employer who is not registered in the Republic of Croatia.
With recent founding of Digital Nomads Association Croatia, Croatia has affirmed its position at the forefront of the process of accommodating digital nomads in bureaucratic, professional, and social sense. We believe digital nomads will recognize the benefits of living and working in Croatia, one of the most attractive tourist destinations in Europe.