South Africa has joined more than 50 countries that offer a digital nomad visa to foreign employees and individuals, giving them the opportunity and flexibility to live and work where they want.

Although lauded as a step in the right direction, foreign entities and workers must carefully consider the tax and employment implications of their arrangements. It could result in complex tax obligations, making their stay financially less favourable.

South Africa’s digital nomad visa became effective in May following the implementation of the Second Amendment of the Immigration Regulations. It allows remote workers to work for a foreign employer in South Africa and allows individuals to derive income from foreign sources on a remote basis in SA.

The foreigner must earn a gross income of at least R1 million per annum.

If the visa is issued for a period not longer than six months in a 36-month period, the remote worker must apply for exemption from the need to register for income tax in SA from the South African Revenue Service (Sars).