The pandemic sent millions of working people home after the coronavirus created unsafe in-office conditions. Nonessential staff across the globe set up workstations at home and waited for the call to come back to the office. For many, the call never came. For some, the call will never come, and they don’t want it to come.
If you’ve been working from home for months (or years), you might be asking yourself, is it a good time to move abroad? Whether you’ve always wanted to travel, or new company policies have given you greater flexibility, now might be your chance to switch up locations and work remotely from abroad.
Benefits of Working Remotely From Abroad
Moving abroad while working remotely gives you the chance to:
- Travel to other nearby countries
- Experience a new culture
- Try different cuisines
- Learn a new language
- Meet new people including other expats
- Switch up your daily routine
With many employers allowing their staff to work from home, it may be time for you to take advantage of these perks.
How to Talk with Your Employer
Some executives say allowing employees to work from home has led to the same level of productivity or even increased it. If your company has been happy with your performance over the time you’ve worked remotely, it may easily approve your request. Before making any moving plans, however, make sure to lay out your strategy for your company. It’s important to reiterate your strengths and contributions while preparing for any questions your manager or team may ask.
To broach the topic with your employer, you should:
- Schedule an hour or so of time on your manager’s calendar to discuss your ask
- Highlight your contributions to the company and your strengths
- Share how much time off you’re requesting for the move or extended travel
- Outline the technology you’ll use to stay connected with your team
- Share how long you plan to live in another country or countries
- Explain how you’ll navigate any other potential challenges such as a time change or different working hours
- Research tax implications for both yourself and your employer
If your employer feels you can perform your same role in a different country well, you may get the green light. If your employer doesn’t think you’ve thought through the logistics, you may face more hurdles. The biggest thing to do before meeting with your employer is to organize your information and anticipate their concerns.
Read on for actionable tips to successfully go through the above checklist and present your case well to your employer.
Check the Country’s Policies on Working Remotely from Abroad
Many countries welcome digital nomads with open arms. For countries with flexible remote work regulations, you simply need to request the correct visa. A lot of places invite remote workers in to help support the local economy. Digital nomads bring income in without posing a threat to the preexisting workforce, which is a win-win situation for these countries.
Before applying for a visa, decide on the type of country you want to move to and how long you’d like to stay. Looking for a warm climate? Montserrat launched a visa allowing remote workers to stay there for up to a year. Want something with more seasons? Iceland allows visitors to work inside its borders for up to six months.
Some countries have gotten even more creative. Looking to give back? In the United States, the state of Hawaii offers a work/volunteer program for travelers meeting certain criteria.
After choosing the type of country you’d like to move to, check its visa requirements. Some countries require you to get travel insurance before entering their borders. Others want to see you’ve been vaccinated. A few governments want to see proof of income to make sure you’ll be able to contribute to the local economy and won’t have trouble securing things such as housing.
- Compare multiple quotes and coverage options
- Work with an insurance expert at no additional cost
- Find the best plan for your needs and budget
Not all countries, however, allow you to work remotely. If certain governments find out you’re working remotely from abroad for a business without ties to its country, they could deport you. It’s important to do your research before choosing which country you’d like to settle in.
Tax Implications for Employees
Moving abroad while working remotely can have tax implications for you, the employee. Many factors impact the taxes you or your company may pay, which include:
- Length of stay
- Type of visa and status
- Status of employment (full-time, part-time, freelance, contract, etc.)
- Nationality of the employee
If you live in a country for a certain period, its government may require you to pay an income tax. You could luck out, however, if you choose to live in a country with a low income tax or none at all! And if your home country doesn’t require you to pay taxes while away, living abroad while working remotely could save you money.
Oppositely, you could end up paying more while working remotely overseas. American citizens, for example, must pay taxes to the U.S. even while living elsewhere in the world. You could potentially find yourself doubling up and paying taxes in two countries.
There are ways to avoid these tax implications though, especially for American citizens. To pay less U.S. taxes or taxes overall, you could:
- Travel from country to country without staying too long in one place
- Claim the Foreign Earned Income Exclusion
- Choose a country that has either low or no income taxes
- Find countries offering a tax break for digital nomads
There are other credits and exclusions available for Americans living and working remotely from abroad too. It’s important to review your personal situation then research which criteria you meet regarding tax exclusions.
Tax Implications for Employers
When it comes to your employer, they’ll have to figure out if the country you move to leaves them with a tax burden. For example, if you live in a foreign country long enough, the government may claim your company now has a permanent establishment in its country.
If you’re an American worker and the country you move to has a permanent establishment tax connection with the U.S., then your American company may owe income taxes and sales taxes in your new country of residence. Before meeting with your manager, research and try to find a location that won’t leave your company with an unexpected tax burden. Saving your employer money will help your chances of getting approved to work remotely from abroad.