Home office abroad

For many employees, the transition to a hybrid working environment is also reviving the dream of working on the beach. More and more employees are already taking advantage of the opportunity to work from other countries, while elsewhere companies are still hesitant to give their employees more freedom in their choice of work location.
Extending your vacation and working on the beach for a few days, which sounds straightforward at first, can lead to a number of questions. This guide provides an overview of what to look out for if you want to move your place of work 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 work from home instead
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 posting or take up employment 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

Employees

Being able to work in another country is a relevant issue for both employees and employers. For employees, flexibility in the choice of place of work and working hours is an increasingly important issue. The desire to achieve a better work-life balance will play an increasingly important role for many when choosing a job and 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 talent no longer has to be acquired only domestically, it can be easier to fill vacancies with suitable candidates. Especially in the tech sector, where demand has long outstripped supply, it is common practice to put together 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
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 OK. An entitlement can only arise if there is a corresponding provision 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 necessarily apply to working from home abroad. As there may be a far-reaching need for clarification with regard to further issues (see below), this is not reasonable for the employer in case 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, the national regulations must first 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. A work permit may therefore also be required. With regard to work permits, EU citizens also enjoy freedom of movement within the EU 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 similar question arises with regard to social security obligations. For the countries of the European Economic Area (EU plus Iceland, Liechtenstein, Norway and Switzerland), this is governed by Regulation (EC) 883/2004, according to which a person is subject to social security contributions in the country in which they carry out their work. If a person is posted to another EEA country, this does not change the obligation to pay social security contributions if the duration of the posting does not exceed 24 months.

Similar to the treatment under tax law, there are also numerous agreements between Germany and other countries for social insurance that clarify this issue. If no such agreement exists, 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 the company's IT departments when working away from the 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 (keyword VPN) and the storage location (cloud vs. local) and extends to questions of monitoring and the use of private devices.

Differentiation between home office abroad vs. 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.

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

Apart from legal and safety issues, it is also important to organize work on projects and collaboration with colleagues well.

Working hours & availability

If colleagues work elsewhere, the other team members should know when they can be reached for questions. Make clear agreements on the times at which the respective people must be available.

This applies in particular if your colleagues work in other time zones. In this case, it is best to use the local time at the company location as a guide to avoid any confusion.

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.

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 poses additional challenges for IT departments in companies. Nevertheless, it must be ensured that employees also have access to the documents and information they need outside of the office or their fixed home office location.

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.

Enquiry list

Home office abroad

What is meant by working from home abroad?

Reasons & advantages of working from home abroad

Employees

Employer

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

Is there a right to work from home abroad?

Right of residence

Work permit

Labor law

Tax regulations

Social insurance

Data protection & data security

Differentiation between home office abroad vs. workation

What to look out for when working from home abroad

Working hours & availability

Project cooperation

Technical equipment & infrastructure

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Home office equipment – including data protection

Working from Home – Legal Regulations for Employers and Employees

IT security in hybrid working models

Software & tools for hybrid collaboration

The Best Goals for Your Next Workation

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