8 important considerations for your employees working remotely abroad

Working remotely abroad has become more popular and simpler than ever. But, before signing off on an employee working remotely from another country, there are some things to consider from a business and HR point of view.

First, you need to check if working remotely abroad is feasible – for you and your employee. You’ll then need to consider things like their right to work, tax obligations, payments, and employee wellbeing.

With over 40 per cent of workers saying they would consider working remotely overseas, employers should make sure they are prepared. First, why is remote working growing in popularity?

The rise of remote working

Recently, working abroad remotely has become much more straightforward and desirable. The pandemic has changed the way millions of businesses operate – from simple home working to employing a truly global workforce.

With the rise in remote working technologies like Zoom and Microsoft Teams, many companies now don’t require the permanent establishment of their employees in one location. Virtual desktops and collaboration tools have made remote working almost seamless, and many employees no longer feel locked into their home country.

EU and Mediterranean countries like Italy, Spain, France and Portugal are popular for permanent moves abroad – although those might be trickier after Brexit for UK citizens. Outside of Europe, Australia and Canada have proven a strong choice in recent years. Modern remote workers may also consider hopping between countries or taking much shorter, more regular visits abroad.

Things to consider with an employee working remotely from another country

Before signing off on an employee working abroad remotely, you should consider the following:

1. Is working remotely abroad practical?

The first question might seem obvious, but it’s incredibly important. Is working remotely abroad practical for your company and employee? We need to consider how long the period of remote work will be – a permanent relocation has far more ramifications than a few weeks. You should look at all aspects of the day-to-day role and decide if working abroad would affect the role in any negative way.

For example, would the time zone of the foreign country impact the employee’s role? If they require collaboration and teamwork to get the job done, a time zone that is out of sync might not work. Similarly, you need to make sure that the host country has the infrastructure – such as reliable, fast broadband – needed to work productively.

Finally, consider if the employee will be homeworking. If so, that extended period of work abroad might warrant you helping to arrange a home office or local workspace.

2. Are there visa requirements?

Remote working from abroad can have different meanings – is the employee planning on settling and working from home abroad, is it a short trip, or will they be travelling through many different countries? This will help to determine their visa requirements.

If the employee is working remotely from another country temporarily, there’s unlikely to be a permanent visa requirement. Many countries offer a short-term or temporary working visas, often taken up by short-term assignees, contractors or digital nomads (a trending lifestyle choice of travelling from location to location while working remotely). Some countries even offer digital nomad working visas.

If the employee plans to relocate to another country for work, they’ll need the right to work in that country. If it’s a full-time move to establish permanent residence, a temporary visa won’t be enough. In some cases, you might need to sponsor the employee to work abroad – each country is different, so check these requirements carefully.

3. What is their tax status?

Next, you should understand the move in terms of your tax liability.  Operating your business in a foreign country can open up corporate tax and permanent establishment liabilities, so it’s especially important to check this before signing off.

Then, you may need to help your employee understand their employment income tax. The definition of tax residency differs from country to country. To work remotely from another country permanently or for a longer period, they may have to become tax resident. For tax purposes, this will mean filing and paying local taxes and managing all of their legal obligations in the new country.

In some countries’ cases, you’ll find agreements – such as tax treaties – that can prevent workers paying tax twice on the same income, for those considered tax resident in two locations.  Many companies might also choose to work with a local expert to ensure compliance at each stage.

4. Are there additional employment rights or duties?

Employment law changes from country to country, so it’s essential to carefully check any local obligations or responsibilities. You should ensure that your employment contract will cover all applicable work policy, such as agreed working hours, expectations, intellectual property matters, and processes.

5. How will you run payroll?

One of the challenges of remote work overseas is paying your staff correctly.

6. Are your employees’ compensation and remuneration packages appropriate?

To have an employee work remotely from another country, you might need to amend parts of your employees’ compensation or benefits package. Think of current perks you offer like:

• Healthcare incentives
• Target incentives
• Bonuses
• Health insurance.

If your employee is going to be working remotely from another country temporarily, you may not need to change much. For a member of staff relocating permanently, you probably will.

7. How will you ensure staff wellbeing and support?

Remote working from abroad also brings staff wellbeing challenges. How will you ensure they are comfortable in their role and have the tools to perform? How will performance be judged? You should put a thorough plan in place to review performance and make sure the move goes well for all parties. Could you change working arrangements to address any challenges they might have? Remember that some countries have rules around performance review procedures that need to be followed – particularly in the case of poor performance.

Finally, you might also have to comply with additional or different personal data protection laws in the host country. Data privacy laws are constantly evolving and are incredibly important – so keep updated.

Signing off remote work overseas

Signing off a staff member working remotely abroad comes with many potential challenges. You might have to consider:

• How the working arrangement will affect performance
• Visa requirements and the right to work
• Tax implications (for your company and employee)
• Classifying workers correctly
• Employment rules in the host country
• How to pay workers abroad
• Updating or amending any employment contracts and benefits
• Monitoring performance and supporting your staff abroad.

If you are unsure at any point, it can help to work with an experienced partner. At Mauve, we help companies preparing for an employee to work remotely overseas. Contact us today to find out more.