Working for a foreign employer while living abroad: how it is actually arranged

Living in one country and being paid by a company in another is now an ordinary arrangement and is frequently undocumented. Three separate parties can have a problem with it, and the immigration authority is only the first.

The immigration question

Does your status permit the activity? A visitor permission generally does not permit work of any kind, and several countries treat remote work for a foreign employer as work performed on their territory. Dedicated remote work visas exist precisely because the answer under ordinary permits was no.

The tax question, for you

Income is generally taxable where the work is physically performed, regardless of where the employer or the bank account sits. A treaty may allocate it otherwise in defined circumstances — the standard employment article does so only for short assignments where the employer has no presence in the country and does not bear the cost.

For someone living somewhere for a year, the ordinary outcome is that the income is taxable there. The employer's location does not change it.

The tax question, for the employer

This is the one that ends arrangements. An employee working in a country can create a permanent establishment of the employer there, bringing the company into that country's corporate tax net and its filing obligations. It can also create payroll withholding and social security obligations for the employer in a country it has never operated in.

Employers who understand this either prohibit the arrangement, restrict it to defined countries, or move the person onto an employer-of-record — which is why those services exist.

The social security question

Contributions generally follow where the work is performed, subject to bilateral agreements and, within the EU, coordination rules with a certificate that keeps you in your home system for defined periods. Without one, contributions may be due in both places or in the wrong one.

How it is done properly

• A status that permits the activity — a remote work visa where one exists, or a local employment or self-employment basis.
• Written agreement from the employer, who is exposed and is entitled to know.
• A decision on the structure: local employment, an employer-of-record, or genuine self-employment invoicing the client.
• Registration where required, and filings in both countries in the year of the move.

None of it is difficult. All of it is skipped, and the discovery usually arrives through the employer's auditors rather than through anyone's border.