Many digital nomads choose to work in popular destinations such as Bali, Mexico, or Spain. While working abroad as a digital nomad can provide flexibility and unique experiences, it also comes with legal risks, including tax implications and potential deportation.
Finn, for example, works for a company but spends a large part of the year working from Spain. While some employees may not know about his remote work arrangement, Finn faces challenges such as navigating company regulations regarding working in other EU countries and concerns about tax obligations in Spain.
Isabelle Wildhaber, a law professor and founder of a startup supporting companies with remote work abroad, notes that many employees may secretly work abroad without proper authorization. This can lead to legal risks for both employers and employees, such as setting up a permanent establishment in a foreign country or tax and social security contribution obligations.
The complexity of legal regulations in different countries often deters companies from allowing remote work abroad, leading some employees to work abroad without proper permission. During the pandemic, some international companies faced challenges when employees relocated abroad without informing the company.
Wildhaber and Gordana Muggler, a global mobility services professional, emphasize the importance of considering five key areas when working abroad: visas, tax implications, permanent establishment risks, social security contributions, and data protection regulations. They recommend careful planning and compliance with local laws to avoid legal implications.
Working remotely abroad can offer flexibility and unique opportunities
