How Digital Nomads Are Transforming Cities and Economies

Photo: Knight Frank

Digital nomads, working remotely and freely moving from city to city, have become a serious challenge for tourist destinations. In Lisbon, Barcelona, and Venice, the influx of foreigners has increased pressure on the housing market and reduced accessibility for locals, Knight Frank experts write.

Rising rents and urban transformation

Residents of Europe’s coastal capitals increasingly note that the traditional tourist flow has been replaced by a new type of pressure on the housing market. Laptop nomads — mobile professionals working from any corner of the world — not only fill the streets but also impact the economy. They open businesses, rent co-working spaces and apartments, drive up real estate prices, and reshape neighborhood structures.

This trend is particularly evident in Portugal. According to the Lisbon municipality, the number of foreign residents has grown by more than 200,000 over the past decade. From 2011 to 2022, the city’s population increased by 8%, but around 27,500 locals were pushed out of the center. During the same period, rental rates jumped by 40% or more, while purchase prices dropped by roughly a quarter. For city dwellers, this became a symbol of how global mobility transforms daily life.

“People often recall times when the center was full of small restaurants rather than uniform chain pizzerias and fast-food outlets,” says Professor Sergio Rebelo of the Kellogg School of Management. He believes the main challenge today is to keep the city attractive for foreigners while ensuring locals can still live and work there.

Similar processes are taking place in Barcelona and Venice. Authorities there are forced to rethink rental and tax policies to offset negative effects. Proposals include restrictions on short-term rentals and capital gains taxes to fund housing programs. However, experts admit that administrative measures rarely solve the problem entirely and often only soften the consequences.

At the same time, governments are looking for ways to mitigate the impact of new mobility. In a number of cities where tourism has always been key, discussions focus on tax measures and urban planning reforms. The situation is especially acute in coastal centers like Lisbon, Barcelona, and Venice.

Other studies confirm that the growing number of digital nomads comes with costs. Around the world, there are about 40 million digital nomads, the Harvard International Review count, with their combined economic contribution estimated at $787 billion annually. At the same time, the concentration of high-income professionals in historic districts can indeed push up housing prices and strain urban infrastructure. Their share of the total population remains small, making the effect more local than universal.

Where digital nomad visas are offered

More and more countries are not limiting but instead actively seeking to attract nomads. Knight Frank cites dozens of programs for remote professionals. In Portugal, such visas are issued for up to one year with a minimum income of €3,040 per month. Spain’s Start-up Law allows work for up to five years with tax benefits, while Greece offers a 12-month scheme with extension options and a minimum income threshold of €3,500 per month.

One of the most interesting and affordable options is Georgia. Here, individual entrepreneurs with small business status can pay just 1% tax on annual income up to 50,000 lari (about $18,000, or roughly $1,500 per month). In addition, the country offers a residence permit for IT specialists: a three-year permit is issued immediately with confirmed income of at least $25,000 per year (about $2,100 per month). Compared to Europe’s much higher thresholds, these conditions look far more lenient, making Georgia particularly attractive to digital professionals.

In the Americas, one of the most popular visas is the Welcome Stamp in Barbados, which allows people to live and work on the island with an income of at least $50,000 per year. Costa Rica offers the Rentista Visa for up to two years for those earning $2,500 per month, while Brazil sets a more accessible threshold of $1,500.

In Asia, Indonesia remains a leader: on Bali, foreigners can apply for a Second Home Visa valid for up to five years, provided they hold at least IDR 2 billion in a bank account. Thailand targets high-earning specialists: the Long-Term Resident Visa requires income of at least $80,000 per year and is valid for up to 10 years. Malaysia runs the DE Rantau Nomad Pass program, offering a one-year residence permit with a minimum income threshold of $2,000.

In Africa and the Middle East, the strictest program is Dubai’s Virtual Working scheme, requiring a minimum monthly income of $5,000. Namibia offers softer conditions — a six-month residence permit for those earning at least $2,000. Mauritius and Cape Verde also run programs aimed at attracting mobile professionals, with relatively accessible income and insurance requirements.

Economic stimulation

Overall, experts agree that digital nomads are becoming an important economic resource. British nomads alone — around 165,000 people — earn about £5.2 billion while working abroad, Public First researchers calculate. At the same time, part of domestic consumption is lost (£3.1 billion less for the UK), but host countries benefit. The authors call this “immediate economic stimulation”: newcomers spend money on housing, services, and amenities, often more than regular tourists.

Governments are shifting from restrictive policies to actively attracting mobile professionals, the International Organization for Migration (IOM) note. The report highlights that new visa regimes not only boost spending but also increase international recognition, provide a foundation for startups, and encourage local investment.

Thus, digital nomads are becoming a visible driver of the global economy. Their numbers are steadily rising, while states compete by offering more diverse and flexible visa programs. For many countries, this is not only a source of income but also a way to strengthen their international image, attract talent, and adapt to the new reality of global mobility.

Read more:

Bulgaria Introduces a Digital Nomad Visa

Moldova Launches Digital Nomad Visa: Conditions, Duration, and Prospects

How Thailand’s Digital Nomad Visa Works: Demand and Challenges

Slovenia to Launch Digital Nomad Visa in November 2025: What You Should Know

Taiwan’s Digital Nomad Visa: Validity Extended to Two Years