Can You Work Remotely from Another Country?

Working remotely in another country has never been easier or more appealing. Currently, there are over 50 countries worldwide that have opened their doors to foreigners by offering different types of working visas. This is good news for both employers and employees, providing opportunities that were previously impossible to take advantage of.

If you’re dreaming of working abroad, there are implications that you need to know about before you pack your bags and head off to exciting places. The same goes for employers who should be aware of the compliance risks of asking employees to work in foreign countries. We cover both these angles with critical discussion points.

Key Takeaways

• Anyone can work remotely from another country as long as they comply with the host country’s visa, tax, and labor requirements.
• Employers can employ workers in other countries through an Employer of Record to ensure compliance with local regulations.

Factors that influence employment in another country

All countries around the world set policies to dictate who may work in their country and for how long. They do this for economic, social, and security reasons. These regulations aim to balance economic activities, business opportunities, and the inclusion of ‘working tourists’.

Another reality around foreign work is that not all passports hold equal weight around the world. For example, one passport will allow you to stay for three months, and another for 6 or 12 months. For instance, passports from France, Germany, Italy, Japan, Singapore, and Spain provide access to 194 countries, making these passports ‘more valuable’ for travel than others. [1]

Immigration laws dictate the kind of remote work visas you need to apply for. This must be done correctly, ensuring you apply for the correct class of visa. If not, the local authorities will send you back home and could even charge you with immigration fraud.

Countries also regulate how different types of employment operate in their country. This means a permanent employee will not be treated the same as a digital nomad, and an independent contractor will be classified differently from a special skills worker. These variables are important to understand when looking into foreign employment.

Employment options in foreign countries

There isn’t only one way of working from another country; it will depend on what you are doing and who you are employed by. Most foreign countries forbid travelers on some form of working visa to look for permanent work in the country; you will need to prove your type of employment to gain entry into the country. These are the most common options:

Remote work for a foreign company

You are a full-time employee, employed by a hiring company in your home country (therefore, a non-US citizen). There are no visa requirements for this type of work because you are a citizen of the country. The company you work for is responsible for complying with local tax and employment law. This can sometimes be an Employer of Record that acts as the legal employer in the home country, while the company is responsible for the day-to-day working relationship.

International remote work

This can be a US citizen working remotely for a US company in another country. This arrangement is becoming more popular. It is when companies offer their top talent the opportunity to work in other countries. This is for a better work-life balance, or because it suits an aspect of their personal life. The company may be required to pay taxes in that country and pay employee benefits as stipulated by local workforce laws.

The standard tourist visa will not apply in this instance, and your company will need to apply for the appropriate work visa.

Employers can utilize four hiring models to navigate employment in overseas countries. These four models are comprehensively discussed in ‘Hiring International Employees: Comprehensive Guide.’

Contractors, Freelancers and Digital Nomads

Contractors and Freelancers generally have more freedom when it comes to remote work in overseas countries. They are not tied to one location or one employer and therefore have the freedom to work wherever they choose. The tax implications are one aspect of this type of work that must be carefully managed. It is advisable that you check whether you will need to pay double taxation. This is where you must pay tax in both countries, and it can create a big problem for you when working remotely abroad.

For employers, a contractor of record can be valuable when you need to employ contractors in a new country to work on projects. They will help you prevent misclassification of worker status, preventing fines and legal problems. They can also help you onboard independent contractors worldwide.

Managing employment across borders

Going to work in a new country offers many exciting opportunities, but it also holds some risks that novices should be aware of. Managing these risks will prevent unintended legal, financial and tax troubles.

Local labor laws

Employment laws are set and managed by the country in which you work, not your country of origin. This standardizes work in international countries and ensures that all companies (and workers) are guided by the same regulations.

For permanent international employees, this means:

• Minimum wage thresholds may apply.
• Mandatory leave entitlements will differ from country to country.
• Termination protections will be granted by the local jurisdiction.
• Notice periods could be dictated by labor laws.

For employers, this means:

• Compliance with local employment contract stipulations.
• Contributions to social security systems and other employee benefit programs are mandatory.
• Correct worker classification is important (e.g., contractor vs full-time employee).
• Compliance with mandatory leave entitlements.

Employers should know that hiring internationally requires a good understanding of labor laws; you risk non-compliance and possible legal action. If you only need to hire one employee, the time it takes to sort this out can outweigh the benefits. Using an Employer of Record, such as Rivermate, shifts the compliance risk to them. They are the legal employer in the country and, therefore, responsible for all compliance with local laws.

Tax obligations

After the labor laws, this is the trickiest part of international remote work. Countries have different tax systems, and it is up to you to understand your obligations in the country you work in. For instance, local tax laws could consider you a tax resident after you’ve been there for a set time. This would mean you need to pay income taxes on your worldwide income.

Another challenge is double taxation, which affects remote self-employed individuals and those in the digital nomad lifestyle. This is when multiple countries claim the right to tax income. Many countries have agreements that avoid this problem, but you should not assume this, and it is always better to confirm this beforehand.

Financial transactions

Just about every country requires workers to open a local bank account to receive local and international payments. Some countries, for example, India, require workers to have a bank account and register for tax before the employment contract can be concluded. In other countries, you will need a bank account to apply for housing and utilities. It just depends on how different countries regulate financial transactions.

There are also countries that require you to have a certain amount of funds before the visa will be approved. For instance, Germany requires that you prove you earn at least €992 per month for visa approval. [2]

Expert insight for employers: Minimum wages around the world differ significantly, and may affect your decision to offer remote working opportunities to your employees. In ‘Minimum wages across the Globe’, we discuss the minimum wages by region and how you can expect changes this year.

Conclusion

Working remotely from another country is possible. However, it’s not as easy as booking a flight and logging in from abroad. There are visa, financial, legal, and labor law challenges that must first be overcome. Tackling your dream sensibly will allow you to enjoy the experience rather than deal with challenges brought on by non-compliance with local laws.

Employers hiring internationally require even more attention to compliance issues. But if you don’t need to establish your company as a legal entity in any country, then you have the option of using an Employer of Record (EOR). This will mitigate all compliance risks, and is worth it - even if you want to hire only one employee. You retain the working relationship while the EOR takes the role of legal employer. Talk to one of the Rivermate experts to find out how they can help you.

For both workers and employers, the way forward is clear: Remote work from another country is possible, and more accessible than ever before - as long as you get the right information upfront!

FAQs

1. Can I work remotely in another country for a US company?

Yes, it is possible to work remotely in another country for a US company. Certain requirements will need to be met by the US company, allowing an employee to work for them in another country, such as a visa, tax, and local labor regulations. Non-citizens can be permanently employed through EOR services, become independent contractors, or serve as freelancers for the US company. Locals who are freelancers can work for a US company in their country as long as they comply with their country’s tax regulations.

2. What countries allow Americans to work remotely?

Many countries allow Americans to work remotely. Some countries offer a digital nomad visa that permits long-term stays. Currently, there are around 50 countries worldwide that are remote-worker friendly. Popular destinations include Albania, Argentina, Bali, Belize, Brazil, Colombia, Dubai, Ecuador, El Salvador, Greece, Hungary, Italy, Japan, Malaysia, Namibia, Panama, Romania, South Korea, Spain, the United Arab Emirates, and Uruguay.

3. How long can a US citizen work remotely in another country?

This would depend on the type of work being performed in the foreign country. For digital nomads, visas are between 1-5 years (country dependent). Others offer working holiday visas that range from 90 days to one year. For US citizens working long-term in another country (on behalf of the US company), special working visas that are valid between 3-5 years apply. Each country has its own rules regarding working visas and sets different time frames depending on its policies.

4. Can I work remotely in any country?

Whether you can work remotely in another country depends on the country’s rules and regulations regarding working visas. Every country offers a number of visa types for people wishing to work in their country. Common stipulations include: A minimum level of income, a clear criminal record, a valid passport that doesn’t expire between 6-12 months of arrival, and health insurance.

References:

1. Mobility in a globalised world
2. Germany - block amount