What are the limitations of remote work while abroad?

Digital nomadism is a popular trend, with many individuals choosing to work remotely from locations like Bali, Mexico, or Spain. However, this lifestyle comes with legal risks that can range from tax obligations to potential deportation.

Finn, an employee at a company, now works from Spain for a large part of the year. He often has to be cautious during meetings to avoid revealing his location through the webcam. While his company allows him to work in another EU country for up to 180 days a year, the administrative burden and tax implications make it challenging for him. Isabelle Wildhaber, a law professor and founder of Vamoz, notes that many employees work abroad without proper authorization, which can have legal consequences for both employees and employers.

The legal risks of working abroad include establishing a permanent establishment in the host country, resulting in tax liabilities for the employer. Employees may also face tax and social insurance issues if they stay abroad for extended periods. Different countries have varying regulations, making it complex for companies to allow remote work abroad due to legal uncertainties.

Regulations on visas, stay durations, tax obligations, and social security contributions vary from country to country. Companies need to navigate these regulations carefully to avoid legal issues. Data protection laws also require consideration, as handling customer and employee data abroad can have implications for compliance. Ensuring that employees continue to be subject to Swiss social security law and defining jurisdiction clauses can help mitigate risks for both parties.

Taking remote work abroad requires a thorough assessment of legal and regulatory requirements, as well as clear guidelines to ensure compliance. While remote work offers flexibility and opportunities, understanding and navigating the legal landscape is crucial to avoid potential pitfalls.