A Complete Guide on Working Remotely From Another Country

We have slowly come to an era where employees don’t have to be chained at an office desk for 40+ hours a week to do meaningful work! In 2023, everyone right, from data scientists to data entry specialists, can do their jobs from anywhere. The global pandemic left millions of people wondering if their current working arrangement is a better option. Employees seem to be more productive when working remotely. In a recent survey, 95% of the respondents said they are more productive when working remotely. It’s no wonder that 78% of CEOs give a thumbs up to the fact that remote work is here to stay. 

Types of remote workers

Remote working is not always about working on the beach or under the mountains. The world of remote work is diverse. Understanding the various types of remote work is crucial for navigating this landscape. 

Contract workers

Popularly called the gig working trend, It spins around the idea that companies and clients have small medium-sized tasks that need doing irregularly. In that case, they find freelancers who are employed on a project-by-project basis. These people can choose the location and schedule of their work.

In-house workers

Unlike contractors, in-house workers are full-time or part-time workers operating from a fixed location outside the company space. These employees still have access to the office, but primarily they work outside the office. They usually have a flexible schedule to work and can adjust their working hours. 

Hybrid workers

Hybrid workers split their working time between company space and alternate workspaces. They have occasional visits to the office for meetings or collaborative activities. 

Digital nomads

Digital nomads are people who can be working remotely from another country. They are not expected to come to the office. They enjoy the stability of a traditional job with the flexibility to live and work where they want. With the rise of digital nomads, remote work has become a viable option for many professionals. They want to travel and experience different cultures, yet do remote work from abroad to maintain their careers.

Benefits of hiring people working remotely from another country

• Hiring Global Talent: Geographical locations are no longer a barrier when it comes to hiring people who work remotely from another country. Companies can hire top-tier talents from around the world. It  also benefits companies through greater employee retention
• Enhanced Productivity: Research shows that workers find themselves to be more productive and efficient when working remotely. 79% of the managers agree that their teams are more productive when working remotely. Compared to busy office spaces with many distractions, a personal space is tailored to their needs which helps limit distractions. 
• Improved work-life balance: Working remotely allows people to choose where they live and reduces the necessity to live near metro cities to maximize their career potential. This lets them take advantage of their new location, finding more opportunities to spread out. Also, employees experience less burnout at work, and improved overall health. Working remotely from another country of their choice creates a healthier environment for workers to thrive.
• Cost savings: Hiring remotely allows companies to reduce or eliminate overhead costs. It also eliminates the need for employees to commute to the physical office, which in turn saves the cost related to transportation, subsidies, parking facilities or company-provided commuting services. It also enhances the resilience of the company in the face of any unforeseen events. This adaptability contributes to business continuity, minimizing potential disruptions.
• Provides employment opportunities: Primary caregivers still don’t choose to work because of undeniable reasons. Remote working aids them in getting back to their career, giving them access to a global job market. They can seek opportunities from any country worldwide, residing in any place. It provides flexibility in working, thereby reducing the logistical challenges of work. Employers also foster equal opportunities by recognizing skilled workers and hiring them, regardless of caregiving responsibilities, creating an inclusive workforce.

What visa do workers need to work remotely from another country?

The employee must get the chosen country's visa, which allows them to work remotely in a country outside their residence. Currently, over 50+ countries offer digital nomad visas. Other countries let employees work on a tourist visa. So, each type of visa serves a distinct purpose and comes with its own set of conditions. The employees should consider factors such as eligibility criteria, work restrictions and potential tax implications and stay informed about the visa policy change. Here are some of the visas available for remote workers

• Working Holiday Visa: These visas promote cultural exchange among young people who love to work abroad for a specified period. It ranges from a few months to a year. While working is still allowed, the primary purpose is to explore and gain cultural experiences. These visas often have age restrictions and may need proof of financial means.
• Business Visa: A business visa permits international travel for business-related purposes. It is for individuals who will be engaging in professional activities in other countries. It includes attending meetings, conferences, negotiations or Collaboration with local entities. These visas usually have short durations and are prohibited from long-term residence.
• Digital nomad visa: A digital nomad visa or remote working visa is a permit that allows employees to live and work in a foreign country without needing to apply for residency or citizenship in that country. It usually allows professionals to work remotely and stay longer than the traditional tourist visas. It allows workers to legally remain in a country for the agreed period, where they can also explore the destination and experience it like a local. The normal stay period is around six months to a year. However, some can be extended up to 2 years. Once the initial visa period is completed, it can also be reapplied to continue living in the country 
• Tourism Visa: Tourism visas are not explicitly designed for remote work, but many countries allow individuals to work remotely under the pretext of tourism. However, the duration of the work on a tourist visa varies from country to country. Some countries tolerate remote work on a tourist visa, provided the work is connected online and does not involve any local employment. However, It is essential to understand and comply with the visa rules to avoid violating immigration laws.

How are taxes paid while working remotely?

Every country has its tax laws and it’s necessary to file appropriate employee taxes. Employees who are remote workers eventually need to report taxes for all income earned during the prior year. They are required to pay taxes in the home country and the host country as well depending upon his/her resident status. If the employee is considered a tax resident in the working country if he/she, 

• Performs work for domestic subsidiaries
• Employs or solicits workers from the local labor force
• Provides services or sells to the local market

the employee has to pay taxes on the income to that country. Plus, the employee needs to continue paying taxes for the home country as well. This causes double taxation issues. To eliminate this, many countries have tax treaties in place. Remote working employees and the hiring employer must research the tax treaty between the countries to get a clear idea about tax obligations. 

Now the other question arises. Should these workers be classified as employees independent contractors or something else? Employers are subject to risks such as possible penalties if they do not classify workers properly according to relevant employment and tax regulations. This brings up the initial question of how international taxes work for remote workers. This emphasizes the point that employers and employees who work remotely from abroad need to be well aware of their tax obligations.

Things to consider while hiring remote workers

1. Streamlining the Onboarding Process: While onboarding remote employees, they must be educated about company policies and work expectations. There are some HR and payroll considerations to be planned, as the regular rules may not apply. It is necessary to provide comprehensive training and access to the necessary tools to ensure smooth integration with organizational practices.
2. Time zone Differences: One of the unique challenges of working remotely from another country is time zone differences. The employee may need to adjust to the work hours or meetings to maintain effective collaboration with the team and the clients.
3. Establish clear communication channels: Laptop, Mobile Phone, and Internet connection are mandatory needs while working remotely internationally. But all countries don't operate the same way. Ensure that the employee has proper online access and regularly communicates using video calls, messaging apps, and project management tools. Emphasize transparent communication and have a mutual understanding that helps maintain long working relationships.
4. Data Confidentiality: It is vital to establish robust data confidentiality measures by implementing secure communication channels and using encrypted tools for file sharing. The employees must be educated on data protection protocols. It is also crucial to regularly update privacy policies to safeguard sensitive company information. It is also to be ready with backup methods in case of unexpected disruptions.
5. Insurance cover: One of the biggest challenges for people who are working remotely from another country is finding health insurance that meets their needs. Employees need to research the available healthcare options and find a plan that covers all their medical needs in an affordable range. Moving through a global PEO or Payroll service provider is a great option for remote workers who want to access quality healthcare while working abroad.
6. Nomad Health Insurance plan: Healthcare costs for an individual who is not a resident of that country are expensive. A Nomad health insurance covers the insurance needs of employees who work remotely from abroad. It covers their medical expenses no matter where they are working in the world. Employers can choose to sponsor nomad health insurance plans as a part of their employee benefits package. Alternatively, employees can independently seek this insurance plan according to their preferences. Clear communication must be established that ensures employees are well informed about their healthcare options and can make choices that best suit their work lifestyle.

Make Global Employment Simple with Gloroots 

Over the recent years, companies have continued to move in the direction of supporting remote work abroad. There has been a great realization that working professionals need a balance between work and life and integrate them in a way that works for them. But from the point of view of employers, it has become more complicated when it comes to classifying their employees and managing their taxes, as there is no one-size-fits-all solution. Which country does the employee reside in? To which country should the employee pay taxes? The questions are endless.

With this growing shift towards remote work, it has become a new normal that employers must also adapt to the changes. To do so, you need to know about the laws and regulations applicable in each jurisdiction and check if the employees are properly classified and taxed as per jurisdiction. 

Seems a bit difficult right? 

Gloroots is a global EOR that provides companies and organizations with a seamless way in onboarding and managing remote employees. Gloroots can help you handle compliance with local employment and tax regulations avoiding complexities in cross-border employment. Hire Globally with Gloroots