September 26, 2022

Which cities are best suited to digital nomads?

As remote working becomes the norm, in-demand talent is heading overseas

Sponsored by


The number of digital nomads and remote workers is on the rise and because of this, so too is a need for the infrastructure to support remote talent. 

Data by global HR solutions provider WorkMotion found that 16% of companies worldwide already offer 100% remote working. But how hard is it to recruit overseas talent and what do businesses need to prioritise?

WorkMotion created The Local Talent Index to help businesses assess which cities are best placed to compete for remote jobs  — and benefit from the increase in taxable income that will be generated. Here’s what they found. 


👉 Read: Europe's most popular digital nomad destinations

Cities leading the way

Some cities are leading the way in having the infrastructure in place to facilitate remote working. According to the local talent index, Prague, Tallinn and Lisbon are Europe’s frontrunners.

The inclusion of Tallinn in the top three was a surprise to Pieter Manden, head of trust and employer compliance at WorkMotion, who notes that the Estonian capital is rarely discussed as a popular spot for remote workers to reside in. He believes that digitalisation plays a key role, but so too does lower pay demands.

“Tallinn has done well at identifying the opportunity of remote work and showing the city does have a lot to offer for people to come and experience,” he tells Sifted. “Another aspect that we should not forget is the lower cost for talent. Hiring people in cheap locations doesn't sound nice, but if you are a developer paying for your staff in London as well as rent for a studio, why wouldn't you look to Tallinn?”

Outside of Europe, Argentina’s capital of Buenos Aires raises a similar discussion. Buenos Aires is not just the political centre of Argentina — it's the epicentre for economics, government, culture, universities and much more. 

The data collated for The Local Talent Index named the city in the top five overall for both junior and senior talent in almost every job category. This includes access to talent, local salaries and remote working infrastructure from industries spanning from video game developers to data scientists.

“The talent living in Buenos Aires is available and relatively cheap. That's one of the key reasons why it repeatedly came up in the top five — because of this massive difference in cost of living compared to London or Berlin, for example,” he says. “That's always a very sensitive topic when it comes to remote hiring, but it is a fact.”

Compliance challenges

But while being a digital nomad is increasingly compelling for workers, there are a number of challenges for companies offering the perk — from navigating local employment laws and tax systems to international payroll and issues around liability, health and safety.

Every country has its own rules, but the fundamental structure of these rules are similar

“A key hurdle when it comes to compliance for employers with remote employees comes down to the lack of global alignment,” says Manden. “Every country has its own rules, but the fundamental structure of these rules are similar. 

“If you look at the UK, Germany or the Netherlands, there is some form of personal income tax and local labour law for each that is really similar to neighbouring countries,” he adds. “But there are always different local ways of applying these rules. That's what's making compliance for employers difficult.”

Boosting your city’s position

Governments have an important role to play when it comes to simplifying these processes for businesses.


Radha Vyas is cofounder of Flash Pack, a startup that arranges group holidays for solo travellers in their 30s and 40s. She believes that governments could make it easier for startups to hire staff abroad by providing more advice around stock options. This could include how you issue stock options abroad and what incentives might be available to staff in different countries.

“The UK has a great scheme that offers really good tax benefits to startup employees when we issue stock options,” says Vyas. “But it’s not easy to find out how that applies abroad, and I think the government could help by issuing guidance on that.”

She adds good communication could boost London’s (or any city’s) position as a hub for digital nomads. 

“Clearly signposted advice on hire-abroad issues such as tax obligations, currency transfers and contracts is an obvious step as the government looks to shore up London’s position as a global tech hub,” says Vyas. “It recognises the fact that hiring abroad will be increasingly key for UK startups competing on an international sphere.”

Overseas hiring

What should your startup do if it wants to open up your talent search beyond the areas surrounding your headquarters?

“Ensure the processes and tools required are set up to support remote work so employees still feel as much part of the team as those who regularly attend the office in person,” says Michelle Zappala-Wood, head of people at Birdie, an all-in-one homecare software solution. 

The world of work is changing fast

Zappala-Wood says Birdie has created ‘the birdie way’, which outlines how the startup operates as a distributed company and the culture it wishes to foster. She adds: “partnering with the right companies to represent you globally is also very important to ensure alignment of values and identifying any compliance issues.”

Vyas agrees, noting how partnering with a third-party agency — such as WorkMotion — to take care of all local payroll and compliance issues enables her to hire people all over the world quickly and seamlessly.

“The world of work is changing fast, and the continuing talent shortage means UK companies must pull out all the stops to attract world-class candidates, particularly in digital, engineering and tech-led vacancies,” she says. 

“Hiring internationally eases this pressure, as well as bringing new and diverse voices into your company culture. It’ll help you shore up a unique and agile workforce for an increasingly globalised market.”