Working Remotely from Abroad: What You Need to Know5 min read
Today’s technology makes it easy to work remotely from abroad. In addition to freelancers, now even full-time employees with flexible or remote-first working policies can go abroad while keeping their jobs.
Before you book your flight, there are details, from reachability to tax concerns, to sort out with your employer. Preparations prior to working remotely from abroad may include researching digital nomad visas, tax liabilities, internet access and how to ensure you’ll have health coverage in any country you go to. With the right planning, a successful experience as a remote worker abroad awaits!
Work remotely from abroad and keep your current job
Freelancers have long been able to work almost anywhere across the globe. Now, many employees have realized they can also fulfill their job duties while living abroad.
Though some employees may head to an exotic location without informing their boss, it’s best to have your employer on board with your remote work plans. As an employee, doing work in a new country for several months might create a “permanent establishment” for your company if they don’t already operate there—which can put the company on the hook for local taxes. To avoid this, your employer may list countries where they do not want you to work. You could also have a telecommuter agreement that will clearly spell out your country of employment.
Visas that allow you to work remotely abroad
Some digital nomads simply travel as tourists. Though rules vary by location, many countries do not require a visa for stays of less than 90 days. This countdown can be reset by crossing a border and then returning. However, the COVID-19 pandemic demonstrated the limbo remote workers abroad can find themselves in when borders close.
Another option for people working remotely from abroad is a digital nomad visa. Countries such as Barbados, Bermuda, Costa Rica, Croatia, Estonia, Georgia and Iceland are among those that offer visas for remote workers. The terms for acquiring each visa vary, but you will almost always need to provide proof of health insurance. You’ll often have to show proof of employment and/or income as well.
A digital nomad visa offers the security of allowing you to legally remain in a country for an extended period of time. In addition, some visas exempt you from paying local taxes.
Research taxpayer requirements
In general, if you stay in a country for less than six months, you shouldn’t owe local taxes. However, tax rules vary, so investigate these laws before booking your flights. Consulting a tax professional with specific questions may ease any worries you have.
Unlike denizens of most other countries, U.S. citizens are required to pay taxes even while residing outside the United States. You can exclude some income (up to $112,000 in 2022) under the Foreign Earned Income Exclusion, but only if you meet certain requirements: being in another country (travel days do not count) for 330 full days in 12 consecutive months, or being a bona fide resident of another country. In addition, each U.S. state has its own tax rules regarding remote workers abroad. The laws for the state you lived in prior to your departure are the ones you should follow.
U.S. freelancers will need to pay self-employment taxes one way or another. If you pay self-employment taxes in another country, you may not have to pay the U.S. Treasury, but this depends on whether the United States has a Social Security Totalization Agreement with the country you’ve paid tax to.
Consider how you’ll do your work
Select a home base where you’ll have reliable internet. You don’t want to be late with a report or unable to attend an online meeting because your Wi-Fi conked out! Read the reviews for potential rentals — it doesn’t matter how glamorous a villa is when internet speeds are too slow. Another potential solution is to join a local co-working space. Not only will they have a good internet connection, you’ll also be able to meet other remote workers in your new location.
Make sure you have health insurance
Even if you already have health insurance in your home country, signing up for a global health plan can be a smart choice. Many popular locations for remote workers abroad are home to hospitals with excellent doctors and cutting-edge facilities—but these facilities can be expensive and your home plan may not cover all medical costs.
Should you become ill or have an accident abroad, purchasing a plan ahead of time will help you know where you can easily and affordably access treatment. Plus, many global health plans offer coverage across the world, so you’ll still have insurance should you move to a new location. And if you regularly take medication, it will be easier to refill prescriptions.
Having health insurance has become even more of a necessity following the COVID-19 pandemic, as many countries now require travel insurance to enter. Proof of health insurance is also a common requirement for digital nomad visas.
Once you’ve arrived in your remote working location, take time to soak in the experience. Climb local mountains or visit beautiful beaches. If you don’t speak the language, classes are a great way to gain communication skills and meet people. Check social media for meet-ups to make local friends.
Social media will also help you keep in touch with loved ones back home. However, if you’re in a different time zone, try not to schedule online get-togethers when you should be sleeping.
Remember to maintain your work-life balance while working remotely from abroad. If there’s a time difference with your clients or employer, do your best to establish boundaries so you’re not working around the clock. Doing so will allow you to fully enjoy remote working from abroad.