31st March 2023
From the latest on the digital nomad visa front to the EU’s upcoming legislation on AI plus all the key things you need to know about working in the bloc’s largest economy (bit of a clue there), we’ve got an interesting and broad mix of news for you in our latest blog. Compliance for recruiters placing global contractors is always our recurring theme and priority as countries across the EU continue to clamp down on businesses and workers who fail to adhere to local regulations, whether it be taxation, immigration or employment related. If in any doubt, always seek advice first.
We’ve mentioned digital nomad visas a fair bit recently but this is an important topic and very relevant to global contractors. Spain of course you will know launched its digital nomad visa at the start of 2023 as part of its Startup Act in a bid to entice foreign workers to help plug skills gaps and retain top talent. Its Iberian neighbour Portugal however is now suffering as a result of the Government’s proposal to scrap its Golden Visa programme. According to SchengenVisaInfo.com, this has pushed digital nomads to consider other countries such as Dubai, Singapore and Hong Kong.
Portugal’s Golden Visa programme – which has seen over 11,000 being granted generating almost €6bn in revenue for the Government – is a residence visa issued to non-EU nationals who invest in the country, typically buying property, which then fast tracks them to obtaining permanent residence and citizenship. Portugal also introduced a digital nomad visa in October 2022, which is valid for one year, albeit for remote workers to qualify they must earn at least €2,800 per month (four times the minimum wage). Only time will tell how much of an impact this decision will have.
Madeira, which is an autonomous self-governing region of Portugal, has not followed suit given the potential harm to its economic prosperity – the Golden Visa scheme was worth €600m to the island in 2022 alone. Referring to Portugal’s ‘Mais habitação’ programme which seeks to focus on accommodation for locals, President Miguel Albuquerque, said, “It is bad for the national economy. Nothing justifies Madeira being covered by this set of measures that are fundamentally aimed at Lisbon as well as Porto.” President of The Azores, José Manuel Bolieiro, faces a similar predicament.
Non-compliance risks for global contractors
Germany, which recently announced that it would be reforming its Skilled Immigration Act to make it easier for foreign nationals to come and work in the country, continues to remain a popular destination for global contractors. While EU citizens do not have to apply for a residence permit, they still need to register with their local office. This isn’t the case for most non-EU nationals who need to apply for a residence permit or visa prior to entering Germany. Some countries though, such as the US, Canada, Israel, Japan, South Korea and New Zealand are exempt of this requirement.
The EU’s biggest economy has long been a firm favourite for foreign nationals in search of a better standard of living. And with data from the country’s Federal Statistical Office revealing that the average annual gross salary is just under €50,000 – doctors, who command almost €90,000 are the highest paid professionals – it’s easy to see why. IT and engineering contractors would be looking at in excess of €60,000 while financial advisers can command above €70,000. Holiday allowances in Germany are generous too with workers entitled to between 25-30 days paid leave per year.
And finally, on a slightly different note, the EU’s AI Act, which was initially proposed by the European Commission two years ago, is still being fiercely debated, with agreement yet to be reached as to its scope, data privacy and prohibited practices given the risk factors of different tools. Some of the high risk category areas include law enforcement, product safety and migration. One of the key stumbling blocks surrounds whether all AI tools with more than one application such as ChatGPT which fall under the General Purpose AI System (GPAIS) category should be deemed ‘high risk’.
The introduction of ChatGPT, which was created by US research group OpenAI with investment from Microsoft and launched in November 2022, has sent EU lawmakers into a tailspin. Just how do you regulate these chatbots and prevent the harmful spreading of disinformation? It’s causing a headache for EU regulators given that the full implications of this technology are yet to be fully understood. It looks like more time is needed to reach a conclusion as to how to best classify the advanced chatbot so we may be in for a bit more of a wait before the AI Act is finally passed.
For businesses placing global contractors, the need to remain compliant has never been greater. As we’ve seen, local legislation and regulations are very different from country to country and there is an ever present risk of non-compliance. It can be a complex minefield which can land organisations and workers in big trouble, so talk to our specialists if you need further guidance.
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