There are plenty of barriers to allowing you to work remotely abroad, but what if you turned the argument on its head and convinced your boss to embrace the corporate nomad life? In this blog post, we’ll touch on some of the key concerns companies have in relation to tax, employment law, immigration and other risks, but also show you ways of presenting the options to help you build a strong business case for embracing international remote work flexibility.
The Work From Anywhere Revolution: Not So Fast
We saw in 2021 and 2022 so many pictures of individuals working from the most exotic locations with their laptop, but in 2023, many companies have started to pull the reins back in and one of the key reasons has been tax and other compliance issues. Before we go into how you can build the business case for work from anywhere, as boring as it sounds, we first need to dive into what the key compliance issues your boss is worried about.
True Work From Anywhere Is A Myth
The first myth to debunk is that it’s actually not possible to truly work from anywhere you want. The first barrier will be your passport – every passport has some limitations on the countries they can access (see Passport Index to find out where your passport sits). Not only that, but there are a host of other limitations which we’ll explain in this article.
Think about it for a second – if you were in your bosses’ shoes and somebody told you they wanted to work from anywhere in North Korea for 9 months a year, what would you do?
They probably can’t get a work visa, so if they went they’d be working illegally. There is no double taxation agreement in place. There’s a risk of triggering individual tax residency (amongst others).
And you’re going to run into a serious data security risk, on top of a fairly obvious duty of care risk in case you get detained.
This is an extreme example, but this is one of the reasons why most companies give a menu of countries they’re open to allowing international remote work from, because they have to wrap their head around the compliance risks otherwise you’ll land them in serious trouble.
Tax Considerations of Working From Anywhere
One of the primary concerns of HR managers when allowing employees to work abroad is tax compliance. Before presenting your case, research the tax laws of the country you wish to work from, and be prepared to demonstrate how you can avoid double taxation and ensure compliance with both local and international tax laws.
Providing your HR manager with a clear tax plan will help put their mind at ease.
However be careful of the 183 day myth – some countries have a much lower trigger days for tax residency, furthermore your employer may have a potential wage tax withholding requirement after as little as 1 day.
Be wary also of generative AI tools like ChatGPT as we have experienced these tools giving incorrect answers to numerous tax and employment law questions.
Permanent Establishment: The Elephant In The Room
The biggest risk for most companies when they worry about international remote work compliance is Permanent Establishment. This is a situation when your company triggers a taxable presence in a country. If your company misses your individual payroll tax withholding, that might cost them a few thousand dollars, but if they trigger Permanent Establishment this could mean hundreds of thousands of dollars or more in additional corporation taxes and penalties, so this is one not to be messed with. When we surveyed over 100+ companies employing 1.7m people this was by far the biggest risk for companies.
Tax Resources To Help You While Remote Working
Thankfully there are plenty of B2C tax tools and platforms out there which you might find helpful as part of your research from your own individual perspective:
- Nomad List has a day tracker built in which gives some day trigger notifications, they also have some community support in each country within their Slack community
- Taxes.pages.dev has a useful guide for people looking to understand taxes at a high level
- VisaDB has some handy tax rate guides
- Deel have a user-friendly guide on remote work taxes
- Tytle is an up and coming platform that helps with tax filing
- Ejectmo is another solution focused on workations
- There are also nomad specific tax consultancies such as Nomadtax, Heavnn and Wanderers Wealth (VisaDB above also have a tax expert marketplace)
Employment Law and Remote Work
Other risks worth bearing mind include employment law. Different countries have varying employment laws that may impact your ability to work remotely. So try to research whether there are any major employment law issues and be prepared to show your HR manager that you can adapt to these regulations and ensure that your company remains compliant, even while you’re working abroad.
Immigration Requirements When Working Remotely
Working remotely in another country may require specific visas or permits. Thoroughly research the immigration requirements of your destination and present a plan to your HR manager detailing the necessary paperwork, timelines, and costs. Make the effort to already check your visa eligibility by checking for example visa research websites such as VisaDB, CIBT Visas or also keep an eye out for digital nomad visas via websites from KPMG, Citizen Remote and many others. Not all digital nomad visas are well designed, but those that are well designed can offer peace of mind to your employers for longer remote work trips.
Mitigating Data Privacy & Security Risks of Remote Work
Data privacy and security are of paramount importance, especially when working remotely. So take the time to outline the steps you’ll take to ensure the confidentiality and security of company data while abroad. This may include using a VPN, adhering to company data protection policies, and keeping devices secure with up-to-date software and strong passwords. Show your HR manager that you understand the risks and are committed to protecting company information and adhering to company policies. Take a look at websites such as NCSI index to understand the cyber security risk of the country you want to visit.
Duty of Care Considerations of Remote Work
Companies have a duty of care to ensure the safety and wellbeing of their employees, even when they’re working remotely. If you’re in a country with very strict employment laws that focus on duty of care specifically, then it’s helpful to show your HR manager how you’ll mitigate potential risks while traveling. This could include researching local safety conditions or checking the local travel safety risk using sources like the US State Department Travel Risk Advisory platform. Another option is to look at remote work specific insurance policies from the likes of SafetyWing, Insured Nomads and similar companies.
Why Employing Digital Nomads Is Difficult
By outlining some of the issues above, you can hopefully begin to get a picture of how this looks from an employer perspective.
This is one of the reasons why lots of company only allow work from anywhere in countries where they have a legal entity, because they already have the in-country tax, employment law and other knowledge to manage the risks.
This is also why many companies only allow a limited number of work from anywhere days in any given year, for example Publicis’ Work Your World initiative, which includes home swap options, is limited to only 6 weeks. It’s why Twitter, before they pulled back on remote work, expressly said “digital nomads need not apply”.
Employing true digital nomads means you expose the company to major risks and certain costs that often go way beyond what that digital nomad might be earning themselves as an individual.
Building The Broader Remote Work Business Case
But all is not lost.
There is a clear path to convincing your boss to allow you to work remotely abroad.
Yes companies are pulling some people back to the office. But the trend towards corporate nomads will continue well beyond 2023.
Companies that are in a war for talent will look holistically at all their employee beneifts, and for some people, the ability to work remotely internationally is non-negotiable.
Say that company wants to hire a very niche, experienced technology engineer? Trying to do so without some degree of remote work flexibility wil make that task next to impossible.
We have also seen how companies such as Spotify reduced their attrition rate by 15% when they introduced their work from anywhere policy and Airbnb increased their career page views to 800k+ the month after they announced their work from anywhere policy.
Don’t be afraid to push back on your boss – ask your HR department do they track attrition due to lack of an international remote work policy, or even better ask them what is the % of candidates that are being churned in the talent acquisition funnel because of the absence of a flexible international remote work policy.
This might just give them ideas to be able to build the business case internally themselves.
Technology Tools to Enable Work From Anywhere
Some bosses might push back and say they don’t have the budget to go to external tax advisors all the time or that the rules are far too complicated.
However you can use this as an opportunity to show them that there are plenty of really powerful technology platforms out there that allow companies to navigate the tax, legal and immigration risks of work from anywhere.
Above is an example of the dashboard that we have in our Work From Anywhere platform. What helps is that your boss can get access to a free 7 day trial directly on the website to see for themselves. In this example above, you can see there’s a digital nomad visa in the destination and the level of risks are broadly acceptable so it is likely that this trip would be approved by your HR team.
Technology tools like above can cost as little as $12,000 a year which compares favourably if you compare to tax advisors who might charge between $3,000 to $5,000 for every scenario that companies request advice on.
Employers of Record are also emerging innovations that have shaken up the global hiring model, however Employers of Record do not apply for periods of less than 3 months.
Companies That Can’t Allow Work From Anywhere
Unfortunately some companies refuse to allow work from anywhere, mainly due to the risks mentioned above. Ultimately putting in place a work from anywhere programme means that company needs to have a policy in place and the advisors and/or technology to support it.
They also need to be embracing remote or hybrid work in the first place, which for a hospital or a manufacturing company might be difficult for many roles.
Those same companies still have business travellers and expats, so the capabilities in lots of ways are already there, but they would have made a conscious decision to say no on the basis that the risk-reward is not worth it for them.
We still find though, that many companies that are not embracing work from anywhere still tend to have “exceptions to the rule” and that in some cases a temporary work from anywhere trip of a few weeks might still be possible, but there is no black-white answer and the flexibility around exceptions will vary from company to company.
Roles That Are Often Not Allowed To Work From Anywhere
Unfortunately, if you are in a heavily regulated role, for example a financial industry role or a defense industry role that is regulated, you might have geographical restrictions about where you can perform your work.
It doesn’t matter how hard you push, there will often be no way whatsoever for you to be able to work remotely abroad, as your company will likely suffer considerable fines if that role is performed outside the geographical boundaries of that country.
We also see in some companies that sales people are expressly forbidden to work from anywhere, or at the very least there is strict monitoring and approval processes for those kind of roles This is linked to the permanent establishment risks above.
Conclusion: Convincing HR to Allow Remote Work
Convincing your HR manager to allow you to work abroad is no small feat. However, by properly researching some of the key concerns mentioned above on tax, employment law, immigration, data privacy, security, and duty of care, you can build a strong case for the benefits of corporate nomads.
Try and also build the business case from their angle.
Pushing them to allow you to become a full-time digital nomad might be a stretch. Some companies will have a low risk appetite and might never allow it, such as heavily regulated banks, but others, especially those in the technology space like Hubspot, might allow up to 90 days a year.
Going beyond 90 days a year typically moves a company into a much higher risk level and pushes them to find a more permanent solution. But there are plenty of companies that have been allowing international remote work trips from anywhere from 30 days to 90 days (you can see more examples here).
In any case, with thorough research and a well-prepared plan, you’ll be well on your way to becoming a successful corporate nomad while still keeping your boss happy.
P.S. Did you know that you or your HR team can access a free 7-day trial of the Work From Anywhere platform here which shows you the risks and solutions for both work and hire from anywhere? John also put together a list of all the various technology solutions for international remote work compliance here.
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John is Co-founder of the Work From Anywhere team, a platform to help companies execute a hire or work from anywhere strategy. John is a Chartered Accountant who speaks 6 languages and was previously the senior finance leader of a €4 billion division of FTSE-listed CRH Plc. John and his family are passionate about travelling and his eldest daughter, Rosa, while only 5 years old has already travelled to 25 different countries.