Working Remotely for a U.S. Company While Living Abroad
If you’ve been working from home since the pandemic, you might be getting a little stir crazy and thinking about how you can take your remote work to the next level, meaning hitting the road to work remotely from another country.
Maybe you’re itching to combine remote work and slow travel to finally do that European trip you’ve been dreaming about? The question then becomes, how can I work from anywhere in the world, instead of Anywhere, USA?
The media and social networks would have us believe that working from anywhere (WFA) is more viable now than ever, but is it really? While there are a few countries with digital nomad visa options and some companies have found ways to embrace WFA, the reality is most countries and companies haven’t laid out a clear path of how individuals can actually do this in practice.
Why is that? The short answer is, it’s a tax and logistical nightmare.
Can I work remotely from another country?
Yes, you can work remotely abroad, but as you might have guessed, it’s nuanced, and depends on multiple factors. The first thing to understand is that there are two core factors that will determine how you approach working remotely from another country.
1. How you want to work
Do you want to work as a full time employee of a company? Or, would you prefer to be self-employed? This could mean working as an independent contractor or freelancer for a company, or as an entrepreneur, starting your own company. The visa options that are available to someone who is a full time employee (FTE) of a company are not the same as someone who is self-employed.
Each option has different implications, and it’s important for you to consider them when making your decision. For example, as a FTE you likely have benefits such as health insurance or a 401k, if you are self-employed, these are benefits you would lose or have to pay for yourself. On the other hand, self-employment would likely give you more flexibility in terms of travel and visa options. Choosing which of these two paths you want to pursue is a vital first step.
2. Your passport
Your ability to travel and stay in another country is determined by the agreements your country of citizenship has established with the rest of the world. These agreements will allow you to stay and travel in another country for a specified amount of time without needing a visa, likely 90 to 180 days. Or, you may need a visa to enter the country, even for a short stay, it all depends on the agreement your country has established with the country you want to visit. For U.S. citizens you can find this information on the U.S. State Department site.
Let’s go back to our example of slow travel in Europe and see how it could actually work:
U.S. citizens are allowed to be in the European Schengen zone as a tourist for up to 90 days within a 180 day period without a visa. Therefore, you could take your U.S. based remote work abroad to Europe for up to 90 days and travel freely within the 26 countries of the Schengen Borders agreement, visa free. If you want to stay longer than 90 days you would need to apply for a visa for the corresponding country and time period you want to visit. That is of course, assuming your company doesn’t have any policies against it.
4 reasons why your company won't let you work remotely abroad
From a company standpoint, there are numerous factors to take into consideration when it comes to having FTEs work from anywhere such as: work permission and visas, compliance, taxes, labor laws, security, time zones, productivity, and employee well being. Let’s dive into these a bit further.
1. Work permission / Visas
If you are not a citizen or resident of a foreign country then you will need a work visa to live and work abroad. Sponsoring a visa for a foreign employee is an added cost for a company, and in many cases involves working with a relocation agency or lawyer who can help the employee through the visa application process. These added administrative steps and costs slow down business efficiency and there is no guarantee the visa will be approved as the decision lies in the hands of governmental agencies. Many companies are just not willing to incur these added costs, invest the wait time, or risk having a visa get denied when there is no business need for the relocation.
Several countries are rolling out digital nomad visas, which may help bridge the gap between someone wanting to stay longer than 90 days but not make a permanent move, however, these visas would need to be evaluated on a case-by-case basis by your company’s local HR department and the HR department of the country you’d like to relocate to (if your company has an entity there). Unfortunately, from a cost perspective, it’s hard to justify HR investing working hours in topics that are this complex but have no direct business impact.
2. Compliance / Taxes
At the moment, most employment contract laws still generally assume you work and live where your company is located and pays taxes. Or, at the very least, that you have an employment contract from the country where you live.
Payroll and tax laws, as well as employee benefits such as health insurance, maternity leave, and vacation time, vary greatly from country to country. For example, in the U.S. employee’s vacation time is often set by the employer, but in most European countries it is legislated. It would be very difficult to keep up with changes for employees who live within multiple countries, and provide system and payroll exceptions to comply with them.
Additionally, many companies have started working with Employers of Record and third party payroll providers such as Deel and Remote to allow them to issue employment contracts in countries where they don’t have a physical presence or tax entity established. Why? This allows them to open up their remote job postings to a lot more countries while reducing administrative costs.
Ultimately this means that the payroll and employment contract is no longer managed by the company’s in-house HR department, so the knowledge of compliance for those countries is minimal within the in-house HR team. With multiple parties involved, knowledge sharing about employment law, and record-keeping become exponentially more complex.
As you can see, many companies simply don’t want to risk breaking the rules of any foreign jurisdictions by having a remote worker abroad living in multiple countries, especially when it involves having to coordinate with a third party provider outside their organization.
Security is also a concern, both the employee’s physical safety, as well as company property. Companies have a certain level of social responsibility to protect their employee’s physical well being. If employees are allowed to travel and work from anywhere, the logistics of keeping tabs on that many people could become unmanageable, and companies would likely need to start offering global health care plans. Can you imagine the cost?
The safety of intellectual property and physical assets, such as employee laptops also becomes potentially more problematic. For example, companies often have policies against using public WIFI networks, utilizing secure VPN’s, or two-step verification. If an employee is traveling outside their country they will likely need to utilize public WIFI networks, or have reduced access to their mobile phone for two-step verification. Working remotely abroad opens the company up to potential security breaches, loss of employee connectivity, and additional risk management of assets.
4. Time zones / Productivity / Employee well being
It’s no secret that nowadays most remote job postings have a region or time zone requirement. Many companies believe employees are most productive when they are working at the same time as their colleagues and can ask questions in real time via slack or video calls vs. asynchronous communication.
If you’ve ever worked in a globally distributed environment you know how challenging it can be to find a time slot that works for you in the U.S. and your EMEA or APAC based colleague. What would this look like if employees were allowed to be anywhere in the world at any given time? How would you find an appropriate time slot for a team meeting?
Some companies may work around that by simply requiring employees to work their region’s hours regardless of where they are in the world, but that has the potential to lead to reduced employee well being if they are working odd hours or interrupting normal sleeping habits.
How can I live in another country and work remotely for a U.S. company?
Let’s recap: You can live in another country and work remotely for a U.S. company, but likely only up to 90 or 180 days visa free. If you want to live abroad for longer, it would be necessary to get residency permission, normally in the form of a visa, and the easiest would likely be a digital nomad visa. The visa options available may vary based on if you’re a full-time employee vs. independent contractor.
If you are interested in doing this, talk with HR or your client. For example, they might be open to having you work remotely from another country for a year if you handle all the visa processes on your own and are willing to work your normal working hours. For example, working east coast U.S. hours from Europe isn’t too unrealistic, especially if you’re a night owl!
However, as mentioned earlier, these situations add additional complexities around labor law compliance. Another option that could help alleviate these complexities, if your company is open to it, is working for an Employer of Record. But, be aware this would be an added cost to your employer and you would need to obtain work permission for that country. Lastly, make sure you inform yourself about any potential income tax implications while you reside abroad.
Working remotely for a U.S. company while living abroad
There is no doubt that the future of work will most definitely include work from anywhere, but at the moment working remotely from another country is pretty uncharted territory. Most companies and governments are still figuring out how they can make this work in a realistic way. If you’d like to know which companies are embracing WFA, check out our list of the top 14 work from anywhere companies.