Can I Work from Home Abroad?
With a substantial increase in opportunities to work from home, many people are wondering whether they can move overseas and continue with their job in a different country. The situation is not always straightforward, and there are visa, residency, and tax implications to consider.
Working from home in another country might seem ideal, but it is crucial to fully understand your position before you make the move. Different countries have different rules and doing some research beforehand will help you ensure that you avoid a difficult situation and possible penalties for breaking the law.
As well as taking into account the legislation of your host country, you will also need to check how long you can stay, as it is generally the case that the legal and tax position will change after a certain period of time. If you are employed, you will need to consider your employer’s position and what you are legally entitled to do under the terms of your employment contract.
Comprehensive advice for working from home abroad
It is important not to breach the laws of either the UK or your host country if you decide to move abroad and work from home. Our team of expert immigration solicitors can advise you of the points to be aware of and help you put the right legal structure in place for your working life.
We represent individuals in a variety of industries and careers working in many countries of the world. We will discuss your requirements with you, to include where you would like to work and what proportion of the year you wish to spend there, and go through each legal point that you need to comply with.
Our team has a wealth of expertise in this area and our advice is tailored not only to make your life as easy as possible as you deal with the tax and other implications of life overseas, but it will also ensure that your affairs are structured as cost-efficiently as possible.
In some countries, the penalties for visa and tax mistakes can be substantial. Taking professional legal advice before you embark on a life working overseas is always advised.
For more information, see our UK immigration lawyers page.
Need advice on working from home abroad?
If you need advice and guidance on the implications of working overseas, to include working abroad for a UK company or having employees working from home abroad, our expert visa and immigration lawyers will be happy to help.
Working from home abroad FAQs
Do you need a visa to work from home abroad?
Whether you need a visa to work overseas depends on the country you will be going to. You should not rely on a tourist visa as in some countries it is likely to be a violation of this if you intend to spend more than a few days checking in with the office and answering emails. If you are found to be in violation of the terms and conditions of your visa, you will be deported or possibly detained.
While some countries may be more relaxed and allow some level of work on a tourist visa, many will require you to obtain a worker visa. This is usually based on the work that you will be doing and not the length of time that you will be staying. This means that even if you are only staying for a month, if you will be working, you will need a visa that permits this.
Digital nomad visas
A number of countries now offer so-called ‘digital nomad visas’, allowing individuals to live and work in their country and, in some cases, to bring dependants.
If you secure a digital nomad visa, you will generally find that the rules on being in the country are less rigid than with other types of expat visa. You might not need to open a bank account, pay tax, or settle in one place with a fixed address.
Some countries offering a digital nomad visa do not encourage long-term stays, with visas valid for only 60 or 90 days, although other countries may offer up to a year or occasionally two years.
Overseas worker visas
For those intending to have a more settled existence overseas, staying in one place to work for an extended period, it will usually be necessary to secure a worker visa.
This is likely to have more stringent conditions attached, such as the requirement to pay local taxes and social security.
How long can I work from home abroad?
Your visa will set out the length of time you can stay, but you will also need to take into consideration the tax and residency situation if you stay for a longer period of time.
Some countries stipulate that if you spend more than 183 days there in any twelve-month period, you are a resident and you will need to pay tax. You need to make sure you add up the cumulative days spent in the country to avoid inadvertently going over the limit.
If you do spend more than half a year somewhere and you are required to pay tax in that country, you may be able to take advantage of a double taxation treaty, if that country has an agreement with the UK. This is designed to prevent someone from being taxed twice on the same income.
If you are not a UK national, you should take into account the effect any lengthy absences from the UK will have on your visa or the continuity of your residence. By spending too long in another country, you could lose the right to live in the UK or the right to apply for indefinite leave to remain.
What are the tax implications of working from home abroad?
Tax is generally the main consideration when working abroad. Each country has its own laws, which can make this a complex issue.
Tax residency is generally based on where you spend the most time, meaning that if you spend 183 days or more in a country, you are likely to be classed as a tax resident by that country. This means that you will become liable to pay tax in that country and to adhere to their rules, such as submitting tax return forms.
During the initial 183-day period, you could find yourself liable for tax in both the UK and the overseas country where you are working. Provided that you are in a country with which the UK has signed a taxation treaty, you should be able to claim back tax from the country that does not have taxation priority.
If you will be working overseas for less than six months, you will generally only be taxed in the UK, although your host country may require you to report on your status.
If you will be present in the overseas country in the medium term, you will generally be taxed both in the UK and overseas, but be able to claim a credit in the UK to avoid a situation where you pay double tax.
Where you will be spending a longer period overseas, in excess of a year, you will be taxed in your host country but where you are not living or working in the UK, you are not likely to face UK taxation. However, as it often takes longer to lose UK residency than to obtain residency of somewhere new, you could be liable for tax in two countries for a period of time. Provided there is a double taxation treaty between them, you should be able to claim back tax paid in the country where you will no longer have residence.
If you work overseas long term but still spend regular time in the UK, then you will need to look at the terms of any residence and taxation treaty between the two countries. This will set out which country has taxation priority. This is the country where you will pay tax, while the other country can be expected to give you a tax credit.
Where a double taxation treaty exists between the UK and your host country, you can usually claim foreign tax credit relief when you fill in your tax return, which will need to include all of your income details. The amount of relief you will receive will depend on the terms of the double taxation agreement.
If a smaller amount is stipulated by the agreement, then you will not receive a full amount of credit. This is also the case where the tax in the other country was paid at a higher rate than it would have been in the UK.
In some cases, the double taxation treaty may require you to claim the tax credit from the other country, in which case the UK tax authorities will not provide you with a refund.
Where there is no agreement in place, you can still usually claim relief where the tax you have paid in your host country corresponds to UK income tax or capital gains tax.
Capital Gains Tax
If you incur a capital gains tax liability, this will generally be payable in the country in which you are a resident. If the liability is in respect of UK residential property, then it will always be payable in the UK.
Social security payments
You cannot assume that the social security payment situation will be the same as the income tax situation. You may have to pay overseas social security even if you are not taxed in that country. This applies to the UK as well as to other countries.
Many countries have social security agreements with each other to try and avoid a situation where an individual could be charged in two countries. You will often find that if you are sent overseas by your employer, you remain liable for social security in the UK.
What your employer may need to consider for workers living overseas
If you are employed, then the country where you are working may require your employer to register for tax in that country. A tax presence may need to be entered for an employer if your role includes negotiating contracts in the relevant country on behalf of the employer.
They may need to withhold tax in the country in which you are working, paying tax there when you receive salary payments.
In some situations, your employer may be deemed to have set up permanent establishment in your host country, which could expose them to substantial liabilities, both in administration and in paying corporation tax.
By ensuring that your place of work is not one that is available to other workers, such as an office, your employer is more likely to avoid the risk of permanent establishment. Generally speaking, working from home will not create a permanent establishment, although care should always be taken when checking the rules to make sure they are not broken.
Is working from home abroad allowed under your employment contract?
With employees having the right to request flexible working, employers are having to consider exactly what they are prepared to allow in respect of employees working at home from abroad. There is a risk of a substantial administrative burden where an employee’s set-up could be classed as a permanent establishment and employers will be keen to avoid this at all costs. It may be the case that other local laws will apply to your employment, such as health and safety, meaning that risk assessments will need to be carried out and the relevant processes followed to ensure your safety.
As an employee, you could be entitled to rights under the employment law in your host country. Where your employment contract does not specify what law applies, then it is generally the case that the law of the country where you habitually carry out your work will apply. Even if this is not the case, an employee could be entitled to rely on local employment rights in respect of issues such as holiday, minimum pay and termination of employment. It should be noted that some countries in Europe have stricter rules on dismissal than the UK.
Before moving overseas to work, you should thoroughly check the terms of your employment contract and obtain your employer’s consent to the move. They may want to enter into a new contract with you or arrange the move on a trial basis at first.
What other considerations are there working from home abroad?
You will need to consider all the other aspects of your employment and welfare in setting up a working at home from abroad situation. Even if you are working abroad for a UK company, you cannot assume that issues like health insurance and pension payments will be arranged for you.
Health cover is particularly important to deal with properly. You cannot rely on tourist health insurance and you will need to put proper employment health cover in place for the time you will be overseas.
If you will be purchasing assets or investing in the overseas country, you should also make sure you have a foreign Will in place.
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If you need expert advice on your legal and tax position in working from home abroad, our team will be happy to hear from you.
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