The 10 Myths of International Remote Work

In today's globalized workforce, international remote work is becoming increasingly prevalent. However, there are several misconceptions around work from anywhere.  Time to debunk the top 10!.

Myth 1: The Main Risk of Working From Anywhere (WFA) is Individual Tax Residency

Reality: While individual tax residency is a significant concern, it's just the tip of the iceberg. Employers must also consider payroll tax, social security, visas and immigration, permanent establishment risks, employment law, data privacy and security, and duty of care, amongst others. Ignoring these factors can lead to substantial legal and financial repercussions.

Myth 2: You Can WFA as Long as It’s Less Than 183 Days

Reality: The 183-day rule is often talked about, but it’s a myth in more ways than one.  Yes, it is true, some countries have an individual tax residency day trigger of 183 days, but that’s just individual tax residency in some countries.  These same countries that have that day trigger for one year might have a different day trigger over a 2 year period (e.g. 280 days over a 2 year period in Ireland which equates to 140 days a year).  Beyond this, what about payroll tax withholding obligations for your employer?  In some countries, this can kick in from day one.  

Myth 3: You Can Work From Anywhere

Reality: Working from anywhere is not always feasible. Companies must navigate visa issues, right to work regulations, potential double taxation, permanent establishment risks, and employment law. Moreover, data security risks vary by location, and not all countries provide a safe working environment.  Some countries might have sanctions for example (see the extract below from our workation policy builder to see how many companies decide which countries to offer as part of their work from anywhere policy).

Myth 4: Tax Authorities Don’t Really Care

Reality: Sorry to be the bearer of bad news, but tax authorities are increasingly cracking down on remote work tax compliance.  Not necessarily in every country, or every state, but it’s becoming a hot topic for many tax authorities.  There is a lot of money at stake and those jurisdictions that are losing tax revenue will of course become more vigilant when it comes to monitoring for tax compliance, both for individuals and companies.  Companies will need to continue to be proactive in managing these risks to avoid penalties and legal issues.

Myth 5: You Can Only Implement a 30-Day WFA Policy

Reality: The duration of WFA policies can vary based on a company's risk appetite.  There is no black and white answer here, but what we do see is that organizations with a higher risk tolerance may allow up to 90 days work from anywhere (again from a predetermined list of countries), while those with lower tolerance may limit WFA to 28 days. Understanding and aligning WFA policies with the organization's risk appetite is crucial.  Please note this does not mean these companies allow all requests by default for up to these day limits, as each case is assessed internally (either manually or with the assistance of technology and/or external advisors).

Myth 6: Everyone Can Work From Anywhere

Reality:  If you’re in a senior sales-generating and/or decision-making role, you’re not going to like this, but unfortunately not all roles are suited for WFA. High-risk roles, such as senior decision-makers or sales-generating employees, often require physical presence due to the nature of their work, or involve the signing of sensitive business contracts (which in turn elevate the risk of permanent establishment). On the other hand, junior back-office employees with low-risk activities may have more flexibility as they are often lower risk.

Myth 7: We Can Employ Digital Nomads

Reality:  Employing digital nomads presents challenges such as tax and legal risks, and compliance costs. While there are benefits like access to a global talent pool and enhanced talent retention, companies must weigh these against potential regulatory hurdles and employing people who change country every few weeks or months can be a significant challenge.  This is why you can see the above FAQ in Twitter’s career’s page from a few years ago clearly indicates that digital nomads need not apply when it comes to full time roles.

Myth 8: It’s Not Possible Due to Compliance Risks

Reality: Many people are quick to point to the compliance risks, but what about the business risks of not being able to retain or attract the right talent?  Having the right employee benefits in place, including work from anywhere flexibility as a core part of this, is one way to see talent leak out of your organization.  What is the cost of that?  Furthermore, while it is true that a “wild west” strategy of letting everyone work anywhere for as long as they want is indeed a recipe for disaster, there are ways to put the right level of safeguards in place to make the compliance risks manageable.  You can restrict the maximum WFA days, for example.  You can limit the menu of countries on your WFA policy.  Companies can also leverage technology solutions that offer plug-and-play decision-making tools and bespoke platforms to assess risk and execute compliance risk assessments efficiently.  

Myth 9: It’s Not Possible Due to the Cost of Tax Advisors

Reality: While tax advisors can be costly, there are technological solutions available that fit various budgets. These include lower-cost, higher-speed tools for basic compliance tasks and higher-cost, sophisticated platforms for comprehensive risk assessment and management.

Myth 10: Employers of Record (EOR) Are Always the Right Solution

Reality: EORs are not a one-size-fits-all solution. They are suitable for certain scenarios but not all. Companies should assess individual tax risks, social security risks, corporation tax risks, and employment law to determine the best approach—whether it's setting up a legal entity, hiring via EOR, hiring contractors, or using digital nomad visas.

Moving From A Reactive To More Proactive Strategy

It’s fair to say that a lot of companies (and individuals) were reactive in how they approached these topics in previous years, certainly in the period just after the pandemic.  It still was not fully clear what companies were going to do when it came to remote work flexibility, likewise tax authorities themselves were only just beginning to wrap their heads around the impact of remote work on tax residency and tax compliance.  

That is no longer the case.

Therefore, navigating the complexities of international remote work requires a much more proactive, strategic approach. 

By understanding and debunking these myths, companies can build sustainable remote work policies that balance flexibility with compliance and risk management. 

As the future of work continues to evolve, we believe that those companies that continue to stay informed on compliance risks and adaptable in their employee benefits offering will have an edge on many of their competitors.  

For more detailed insights and practical solutions, reach out to us or book a demo of our platform to show you how you can leverage our award-winning remote work compliance platform, used from startups to Fortune 500 companies around the world, to offer international remote work as an employee benefit to your employees.