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Home office abroad
The complete guide at a glance

Home office abroad

The shift to a hybrid working world is also reviving the dream of working on the beach for many employees. Employees are increasingly taking advantage of the opportunity to work from other countries, while elsewhere companies are hesitant to give their employees more freedom in choosing their place of work.
Extending your vacation and working a few days on the beach, which sounds uncomplicated at first, can lead to a few questions. This guide provides an overview of what to look out for if you want to move your workplace abroad.

What is meant by working from home abroad?

When you read about working from home abroad, the first thing that usually comes to mind is extended vacations and working from home. However, this form of mobile working, known as workation, is not the only scenario in which people talk about working from home abroad.

Let us therefore first clarify when we can speak of working from home abroad. The following scenarios are conceivable:

  • Employees travel abroad for a certain period of time and work from there
  • Cross-border commuters no longer travel to the neighboring country for work, but instead work from home
  • Employees move their center of life abroad and work permanently from there for the previous company in Germany
  • Employees from abroad do not take up a secondment or start a job in another country
As can be seen, there can be very different cases of the foreign home office, all of which have different consequences.

Reasons & advantages of working from home abroad

Home office abroad - Reasons & advantages of home office abroad

Employee

Working in another country is a relevant issue for both employees and employers. For employees, flexibility in the choice of workplace and working hours is an increasingly important issue. The desire to better reconcile private and professional life will play an increasingly important role for many when choosing a job and an employer in the future.

Employer

Conversely, the same applies to employers. In the battle for the best talent, being able to choose the best place to work from home is a way to set yourself apart from other employers. Offering remote work can be a competitive advantage, especially if a company cannot keep up with its competitors in terms of other factors such as salary, number of vacation days or company benefits.

At the same time, companies that offer mobile working abroad also have access to a larger pool of candidates. If talents no longer have to be acquired only domestically, it can be easier to fill vacancies with suitable candidates. Especially in the tech sector, where demand has exceeded supply for some time, it is common practice to assemble teams internationally.

What questions need to be answered before starting the home office abroad?

If employees are to be able to work from abroad, various questions must be clarified in advance of the country of residence.

Relevant issues in relation to working from home abroad

  • Right of residence
  • Work permit
  • Labor law-related
  • Tax treatment
  • Social insurance
  • Data protection & data security
The HR department in particular, but also those responsible for IT, must therefore deal intensively with the consequences of mobile working abroad in order to avoid problems later on.

Is there a right to work from home abroad?

In principle, there is no right to work from home abroad. Rather, the employer must give their approval. An entitlement can only arise if a corresponding regulation is stipulated in the employment contract, a collective agreement or a works agreement. However, even if there is a corresponding regulation on working from home, this does not have to apply to working from home abroad. As there may be extensive clarification required with regard to further questions (see below), this is accordingly not reasonable for the employer in cases of doubt according to court decisions.

Right of residence

In order to be able to work from home abroad, it must first be clear whether you are allowed to stay in the country in question at all. Within the European Union, EU citizens enjoy numerous freedoms in this respect and can stay in other EU countries without any further restrictions. For the other countries of the European Economic Area (Iceland, Norway, Liechtenstein) and Switzerland, a 3-month right of residence applies.
For all other countries, national regulations must first be checked. The respective residence regulations should be checked and, if necessary, a residence permit should be applied for.

Work permit

A residence permit is not the same as permission to work in the destination country. An additional work permit may therefore also be necessary. With regard to work permits, EU citizens enjoy freedom of movement within the Union and do not require a work permit. This regulation can also be applied to Switzerland.
For all other countries, the respective requirements must be checked.

Further information

Labor law

When employees relocate their home office abroad, the HR department must clarify which requirements apply in terms of employment law. This includes the requirements regarding

In principle, the labor law provisions of the country in which the usual place of work is located apply to temporary home offices abroad. However, the question of what is considered temporary has not yet been finally answered.
If the home office in another country becomes permanent, further requirements may need to be observed. In this case, the level of occupational health and safety does not fall under that of the country of residence. Within the European Union, the Rome I Regulation governs this situation. Specifically: If, for example, stricter requirements apply in Italy than in Germany, the Italian legal requirements are binding and not the German ones.

Tax regulations

If the work is performed partially or permanently outside Germany, this raises the question of which country the taxes are to be paid to. In principle, the rules of both the employer country and the country of residence must be observed.
Double taxation agreements exist between Germany and a number of other countries which stipulate that employees are only liable to pay tax in their country of residence. The country of residence is the country in which the employee spends more than 183 days a year.
If there is no double taxation agreement, taxes must generally be paid abroad. However, these can normally be offset against the tax due in Germany.

Social insurance

A comparable question arises for social insurance obligations. For the countries of the European Economic Area (EU plus Iceland, Liechtenstein, Norway, and Switzerland), this is regulated by Regulation (EC) 883/2004. According to this, a person is subject to social insurance in the state in which they carry out their activity. If a person is seconded to another EEA state, this does not change the social insurance obligation if the duration of the secondment does not exceed 24 months.
Similar to tax law, there are also numerous agreements between Germany and other countries for social security that clarify this issue. If such an agreement does not exist, the respective legal situation should be clarified in advance.

Data protection & data security

Last but not least, the issues of data protection and data security must not be neglected when working from home abroad. Data and confidential documents must be protected from access by third parties to the same extent as when working in the office or at a home office workstation at home.

Data security is a fundamental problem for IT departments in companies when working outside the company office. HR managers should work closely with IT managers to find suitable solutions to make mobile working more secure. This starts with the network connection (VPN) and storage location (cloud vs. local) and extends to issues of monitoring and the use of private devices.

Distinguishing between home office abroad and workation

Workation is a combination of the words work and vacation - working while on vacation. Workation is therefore a sub-form of working from home abroad.
Home office abroad - Differentiation between home office abroad vs. workation
The term is not yet legally defined in Germany. If workation is agreed, it is therefore also advisable to make contractual arrangements. The decisive factor here is the period of workation. If the period is less than 4 weeks, there is no need to act from a labor law perspective. However, the basic possibility of working in the destination country or the need for residence or work permits should be clarified.

What to look out for when working from home abroad

Beyond legal and security considerations, it's also important to effectively organize project work and collaboration with colleagues.

Working hours & availability

If colleagues are working elsewhere, the other team members should know when they are available for questions. Make clear agreements about what times the respective people need to be available.
This is especially true if colleagues are working in other time zones. In this case, it is best to orient yourself to the local time at the company location to avoid ambiguities.

Project cooperation

As with hybrid working in general, it is also important to define clear rules for collaboration. Software tools simplify the digital collaboration of distributed teams in various ways.

Home office abroad - Project collaboration
With project management tools such as Asana or Jira, projects can be mapped completely digitally. This means that everyone involved in the project has access to the relevant information from anywhere and knows the tasks to be completed and their current status. Video conferencing solutions such as Microsoft Teams, Zoom or Google Meet make it possible to discuss projects directly with everyone involved and clarify questions.

Technical equipment & infrastructure

Remote work presents IT departments within companies with additional challenges. Nevertheless, it must be ensured that employees also have access to the documents and information they need outside the office or their permanent home office space.
Home office abroad - Technical equipment & infrastructure

Clarify with the IT managers in advance whether all the technical requirements (suitable technical equipment such as laptops, smartphones or tablets, as well as the necessary access options) are in place for working from abroad. This avoids a rude awakening on site later on.