Citizenship/Residence by Investment and Digital Nomad Visas: The Golden Era of Individual Tax Evasion and Avoidance?

Abstract

In recent decades, increased mobility of capital and labor improved individuals’ opportunities to avoid or evade tax. This chapter explores two programs commonly provided by tax havens that facilitate individuals in dodging taxation in their home country. We first focus on longer-existing initiatives targeting wealthy individuals by offering citizenship and residence-by-investment (CBI/RBI) programs and discuss how they allow individuals to evade taxes. We then delve into the recently launched digital nomad visa (DNV) programs, which grant individuals temporary residence in a country while working exclusively remotely. We provide a comprehensive overview of the key features of existing programs based on a novel, hand-collected dataset. Currently, more than 40 countries offer a DNV program, and half of them are tax havens. Although DNV programs mainly create concerns about tax avoidance, they can also provide tax evasion opportunities similar to those documented in the literature for CBI and RBI programs.