Why You Should Start a Freelance Business to Live the Digital Nomad Lifestyle

Freelancer working on laptop while sitting on a tree at the beach. Hannamariah/Depositphotos.com

While there are plenty of ways to find remote employed jobs, working as a freelancer can be a far better option for those wanting to live the digital nomad lifestyle.  Sure, you can try asking your current boss to go remote so you can work from anywhere. Unfortunately, there are several legal and tax reasons your company may not be happy about you working from a foreign country.  

In this article, I will show you why freelance work is a perfect fit for digital nomads.  The best part is that with careful planning you can use freelance work to get free travel, fund your travels, or get tax breaks on your travel expenses. 

Disclaimer: I am not a lawyer or an accountant. This article is provided for general information purposes only and is not intended to constitute legal, tax, or other professional advice. You should obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. Deskless Nomad makes no representations, warranties, or guarantees, whether express or implied, that the content in the publication is accurate, complete, or up to date. Please see the full Deskless Nomad Disclaimer

What is a freelancer?

A freelancer works independently for a number of different clients rather than as an employee for one specific company.  Freelancers work for themselves and contract out their skills to companies. Those companies usually contact for tasks they can’t complete with the skill set of their current employees.  

Examples of common freelancer jobs for digital nomads include:

  • Web developer
  • Writer
  • Editor
  • Financial consultant
  • Accountant
  • Photographer
  • Virtual Assistant
  • Graphic designer
  • Translator
  • Transcriptionist
  • Digital Marketer
  • Video Editor
  • Social media manager
  • Talent recruiter
  • App developer
  • Industry-specific consultant
Man working on laptop at a picnic table. AlexBrylov/Depositphotos.com

Why starting a freelance business is a great way to become a digital nomad

You can work from anywhere

As a freelancer, you are not tied to any specific geographic location.  While some freelance projects may require you to be in a particular location for a period of time, you have the freedom to choose your projects and locations. 

People choose the digital nomad lifestyle for the freedom to travel and explore the world. The geographic flexibility and location independence of freelance work make it a perfect fit.

You don’t run the risk of a remote job suddenly turning hybrid when the company decides workers should return to the office

Some companies that permitted remote work during the pandemic are now asking employees to return to the office either full time or as a hybrid arrangement.  With freelance work, you won’t be ordered to return to the office or risk losing your job.  Freelance work is generally remote by nature. Since you are your own boss you can choose projects that don’t require onsite meetings.

You can choose the type of projects you work on

One of the best parts of having the freedom to choose the projects you work on is that you can say no to any client.  While there is an art to saying no gracefully and thanking potential clients for the work opportunity, you don’t have to just accept any job offered to you.  You may have too many projects and be stretched too thin.  The offered payment may not be sufficient.  You may not like the type of work or the client themselves.  It doesn’t matter.  You get to choose.

You can set your own hours

As a freelancer, you don’t have a boss or supervisor making sure you arrive at the office on time.  You get to determine your own work hours.  This is ideal for digital nomads who travel in time zones that differ from those of their clients.  Unlike remote employees, freelancers moving between continents or countries don’t have to worry about always working during their company’s time zone work hours.

You can set your own rates

As your expertise and reputation increase, you can increase your rates accordingly.  You give yourself a raise when the quality of your work commands it, not when your boss gives it.  

Traveling freelancer holding up a laptop. Fxquadro/Depositphotos.com

Freelance work often has minimal start-up costs

Depending on your freelance or consultation services, there may be minimal start-up costs.  With a little bit of research, you can learn how to do a lot of the initial start-up tasks on your own.  If you do your freelance work from a laptop then your start-up costs may be limited to general tasks involved in setting up a business such as: 

  • Obtaining a business license
  • Registering your business
  • Filing an LLC
  • Getting business cards printed
  • Hiring an accountant (although you can learn to manage your own accounts and taxes on your own)
  • Setting up a business website (hosting and domain name at a minimum +/- getting a freelancer to set up a website for you)
  • Getting a domain-based email
  • Opening a business bank account
  • Applying for a business credit card
  • Setting up a legal contract template
  • Attending conferences or business events for networking

Starting a business allows you to be creative in various aspects of your business and work

If you enjoy being creative, being a freelancer provides plenty of opportunities to use the right side of your brain.  Even if your freelance work isn’t exactly creative by itself, there are numerous ways you can add creativity to your freelance business:

  • Write a business plan with your goals and strategies
  • Brainstorm different services and service packages for customers
  • Create a digital media kit with information about your business, services, and rates
  • Make a welcome packet for when your project proposals are accepted
  • Set up your own website (including photos and written content about your services and business)
  • Design flyers to hand out to local businesses you want to work with
  • Create business cards
  • Design email signatures for client correspondence and your outreach campaign
  • Market your services on social media (Twitter, Facebook, Instagram, Pinterest, etc)

Being a freelancer allows you to apply for freelancer and digital nomad visas

Digital nomad visas allow you to stay in certain countries beyond the time normally allowed by tourist visas.  Many digital nomad visa applications are open to freelancers or the self-employed and not remote workers who are employed by companies in another country. 

More and more countries are rolling out their own version of digital nomad visas, but for tax reasons, several digital nomad visas are only available to freelancers. This primarily has to do with corporate taxes and the permanent establishment of a business entity within a country.

Many countries offer financial and tax incentives to freelancer digital nomads

Beyond the expanded ability to apply for digital nomad visas, there are many countries offering financial incentives to freelancers who apply for digital nomad visas.  These can include a reduction in tax rates and some places will even pay freelancers to live there.

There are also several places in the United States paying remote workers and digital nomads to move.

Freelancer writing on a laptop at the beach. Gaudilab/Depositphotos.com

As your own boss, you can be strategic with places you want to travel to and the travel required for your projects (or travel that benefits your business in other ways)

One of the primary goals of being a digital nomad is to travel and explore the world. It only makes sense to tailor your business to facilitating and funding travel. There are a number of ways you can do this.

1. You can choose projects that require meeting with clients in locations you want to travel to or where you can justify the benefit of meeting with clients in person (for tax purposes)

In this case, the client can agree to pay for the travel outright or reimburse you.  If the client doesn’t pay for travel expenses then you can deduct the travel expenses on your own small business taxes.  You may be able to deduct some or all of your meals, flights, accommodation, local transportation, and parking fees. 

Even if your client is not requesting an in-person meeting but you think the project or work would benefit, you can plan to travel to the location and offer to meet with the client.  Face-to-face interactions can increase client satisfaction and the likelihood that your client will refer you to new clients or establish ongoing work. 

2. You can select projects that require travel for research or project completion

This works best if you do freelance work that requires research or onsite work such as journalism, photography, freelance writing, or industry-specific consulting.  You can coordinate the jobs you accept with your desired travel plans or let the jobs determine your next destination.

3. You can attend networking events and conferences that require travel to interesting places and then deduct the expenses

Travel to work-related conferences and networking events in your industry can be deducted as a business expense.  While you may not be able to deduct accommodation for the full length of your stay, if you stay longer than the conference, you can still deduct your flights, meals, local transportation, and accommodation for the days of the conference.

4. You can seek educational opportunities in another country that benefit your business and provide tax deductions

Would your freelance work benefit from proficiency in a foreign language? Consider traveling to take language courses. 

Are there specific skills that you’d like to learn for your freelance business? Consider traveling to take workshops in those skills.

You can save more for retirement

If you are a United States citizen or permanent resident you can contribute more to your Solo 401k if you are self-employed. You can contribute $20,500 as your own “employee” plus up to 25% of your net self-employment income (profit minus your “employee” contribution and self-employment tax) to a Solo-401k up to a maximum of $61,000 for 2022. If you are 50 or older, you can contribute an additional $6,500.

Even if you contribute the maximum to a Solo 401k, you can still contribute to an IRA, although your contribution may not be tax-deductible. As an additional way to save for retirement, you can select a high deductible health insurance plan that allows you to contribute to an HSA.

Freelancer working on laptop outside. Romablack/Depositphotos.com

Why a freelance business may not be right for your digital nomad lifestyle

It takes time to gain a steady stream of clients

If you want to start the digital nomad lifestyle immediately you may need to get a remote employed job first while starting your freelance business on the side.  You will need to grow your freelance business to a comfortable income level to pay for your travels before quitting your regular job entirely.

Freelance income can be inconsistent

Your income will vary from month to month depending on your projects.  This can be scary if you are traveling in another country and worry you will run out of money.  It is best to plan ahead with an emergency fund to cover lighter months.  You may also want to learn how to plan long-term travel to help you budget for the digital nomad lifestyle.

It takes more of a hustle to market yourself and find work

Unlike with an employer where you are provided projects or tasks, as a freelancer you have to go out and look for work.  It is best to set aside time regularly every month to work on marketing your business.

You have to have a strong work ethic and be disciplined, well-organized, and self-motivated

When you work independently it can be hard to stay motivated.  You have to learn how to stay organized and productive.  It is important to remember that if you are paid a set price for a project then every extra minute you spend on it decreases your hourly wage.  It is imperative to find ways to be more productive and disciplined.  There are lots of great productivity apps and tools that can help.  

Depending on your industry, the competition may be fierce

In the beginning, you may have to hustle to find clients.  Eventually, you will establish a reputation and clients will find their way to you through referrals, your online marketing, and other means.  But as you are launching your business you may face fierce competition.

Freelance work can be solitary and lonely

Working alone all of the time and being a digital nomad can be lonely.  Zoom meetings with clients can only do so much for your sanity.  It is important to meet other digital nomads while traveling.  There are also plenty of ways you can learn to beat loneliness while traveling long-term. Staying in a digital nomad village or doing your work in coworking spaces are some of the best ways to keep regularly interacting with other people.

You need to have some knowledge of how to manage business expenses and plan for taxes

While an accountant can help you a lot in these tasks, it is important for you to learn how to manage and balance your business expenses and travel expenses.  Your tax situation may also be quite unique, especially if you are doing freelance work while traveling abroad. 

If you do hire an accountant, make sure they have some experience with your industry, understand international tax agreements, and are familiar with the tax laws where you have established your tax residency.

You need to be comfortable with rejection

Once you have established your business, many of your clients will come from referrals. When you are first starting out you will have to market yourself and reach out to potential clients. You may not get positive responses to your emails pitching your services.  It is important to be ready for and comfortable with rejection.

Being in the customer service business can be painful

Running a successful freelance business requires you to be a good communicator.  If you are very introverted, this might not be right for you depending on how much interaction your work requires with the client.

Unfortunately in the digital world, it is possible for new clients to ghost you or for online businesses to unexpectedly shut down.  You may be left with hours of completed work and no one to pay you for your time.

You may occasionally run into a client who leaves you a bad review for no obvious reason.  You may have been totally professional, turned in excellent work on time, and someone still finds a reason to criticize.  That is just part of the customer service game.

There are many reasons starting a freelance business is an excellent way to begin your digital nomad lifestyle.  But starting a freelance business still takes a solid business plan, lots of hustle, and careful financial strategies to successfully launch your location-independent business and travel lifestyle.

A great way to learn more about starting a freelance business to live the digital nomad lifestyle is to attend a digital nomad conference and meet others who have been successful.

Are you ready to start your freelance business? Read my step-by-step Digital Nomad Guide to Starting a Freelance Business.

Does the digital nomad lifestyle intrigue you? Find out more reasons why you should become a digital nomad.

Jamie Dubois

I am a freelance writer, wanderer, kayaker, rock climber, and adventurer.

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