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Whenever I have a conversation with someone back in the US about my life abroad, we quickly arrive at the familiar question, “What do you do for work?” I try to put myself in their shoes. Once my mind wanders past the dreamy prospects of ambling through the local farmer’s market, sipping coffee on a balcony in the warm morning sun, or delving deep into conversations with new friends in a different language, it can pretty daunting to think about how to earn a living in a brand new country.
I’m not retired, though I wouldn’t turn down the opportunity if it presented itself! While we are working, even a simple, frugal life abroad doesn’t come very cheap. My wife and I sustain ourselves here in Portugal through remote work in our respective fields. Many people these days, especially in the post-COVID times, have jobs that transitioned to remote work 100% of the time. Still, finding out exactly what you want to do and finding someone that will pay you enough to sustain your lifestyle abroad is much easier said than done.
At Expat Empire, we get asked many times every day about how someone can take their job and work remotely while living in another country long-term. In this blog, we’ll go beyond the obvious questions of what you’ll do as there are plenty of other things you’ll have to consider in regards to work permits, health insurance, taxes, and more. Unfortunately, it’s never a straightforward answer, but you’ll be better prepared to face these challenges head-on after reading. Let’s get started!
Remote Work: Short-Term vs Long-Term
We can generally group remote workers abroad into two main categories: those who work in a country for a short duration and those who legally work and reside in another country. The deciding factor between these two is simply how much time that remote worker is planning on staying in a given country per year.
The average tourist visa in many countries around the world enables foreign nationals to stay within the country for 90 days within a 180 day period. Those 90 days can be arranged however someone likes, but it prevents that person from legally residing and working in the country. For many expats, this could be an extended work-cation of up to 12 weeks. By jumping from country to country once each visa-free period ends, digital nomads can continue to travel the world indefinitely without having to worry too much about becoming a tax resident in another country.
On the other hand, the people who legally work and reside in a given country must have a residence permit for that specific country. Holders of such a permit are allowed to spend much longer periods of time in the country and often must stay at least half of the year, or 183 days, within the country’s borders to retain the permit.
Three Ways to Start Remote Work Abroad
As you search for ways to take your remote job to the perfect location (or several!), know that there are a few ways to plan your situation. If you’re planning on keeping your current job, the best thing you can do is get the blessing of your superiors to work remotely in a different country and likely a different time zone as well. Otherwise, you’ll need to become a freelancer or get a Global HR Outsourcing and Payroll service provider to work with your current employer. Let’s dive deeper into these three ways to set up a life abroad that’s sustained by remote work.
Become A Local Employee
You will not be able to remain an employee of a U.S.-based company if you want to live in a foreign country for the long term. As long as you become a legal and tax resident of the country after spending more than 183 days in a year within the country, then your U.S. employer would technically have an employee living in that foreign country. In essence, this would make your employer responsible for paying employment taxes and benefits in that country. In almost all cases, this would require your U.S. employer to have a subsidiary company incorporated within that country in order to be able to continue to employ you.
If you’re working for a company that already has a subsidiary in the country you want to move to, then your best bet would be to see if you can get your U.S. employment contract transferred to the local office in that country. You would then become an employee of the local company instead of the U.S. company, solving your employer’s tax and legal issues and providing you with a way to qualify for a residence permit.
While this can be an excellent option for people working for large multinational companies, you may still find it difficult to transfer your contract to a foreign office. If there is any internal resistance to moving your contract onto the local subsidiary’s payroll, then you may need to apply for a new job offer at the subsidiary instead. Additionally, you may find that your employer would require you to adjust your salary to match the local salaries in the foreign country rather than allowing you to keep your current U.S. salary.
Regardless, the reality for most people is that their U.S.-based employer does not have a subsidiary in the country that they want to move to and would not be willing to incorporate one just so they could live there. If that’s the case you find yourself in, then you will want to consider the following two options.
Become a Freelancer
Freelancing has been a popular way for expats to earn income ever since the internet became monetized. With the global reach of freelancing sites such as Upwork, Fiverr, and many more, it is a great way to break free of the tethers of office life and a rigid schedule. There are so many ways that talented workers can reinvent themselves as freelancers and enjoy the remote work lifestyle abroad.
Before you quit your employer to start freelancing, however, you should know that you may have a legitimate pathway to freelancing while still being functionally employed by your company. This can be done by changing from an employee to an independent contractor. Because you would no longer be an employee, your original employer would not be responsible for the legal and tax ramifications of having an employee living in a foreign country. With that said, please remember that, in this scenario, you would be responsible for paying for your own taxes and social benefits and would also not be eligible for any of the additional benefits that stateside employees may receive from your employer.
The biggest issue with this scenario is that it can often be difficult to come to a beneficial financial agreement with your employer. Many companies are not open to hiring contractors. Even if they are open to it, negotiating a good rate for your freelancing instead of an employee salary carries a considerable amount of risk for both the employee and the employer. This sort of arrangement also eliminates the possibility of a hybrid working environment, which can be a hard sell to a company that’s on the hook for expensive rented office space. Just like in the previous scenario, your best shot is to build up a bulletproof proposal and work with your employer to explore if such an arrangement would be possible.
If it won’t be possible for you to change from an employee to a contractor for your current employer, then you will need to build up your own portfolio of freelance work in order to support yourself while living abroad. You can check out the remote work platforms listed on our Expat Tools page to see how you might be able to leverage your current skill sets to generate income as a remote freelancer. Expat Empire’s founder can also work with you through 1-on-1 coaching sessions to figure out how you can launch and scale your freelance work to the point that you generate enough income to meet the requirements for digital nomad and remote work visas around the world.
If you’re interested in becoming a freelancer and need to incorporate a U.S. company, then we recommend working with Firstbase and Business Anywhere. They will give you the lowdown on easily setting up and running a U.S. company online, even if you’re already living abroad. With a business generating proven and reliable income, being able to stay abroad long-term will be all but guaranteed.
Become an Outsourced Employee
Your third option to become a remote worker abroad is to get your company to work with a Global HR Outsourcing and Payroll service provider so that you can become an employee in your target country. We recommend service providers such as Deel, Remote, and Oyster for companies to be able to quickly set up subsidiaries in countries around the world.
This arrangement would work as follows:
- First, your employer would need to agree to pay for the services rendered by an outsourcing and payroll provider so that they could access the provider’s subsidiaries in countries around the world.
- Next, you would need to sign an employment contract with the outsourced service provider’s local subsidiary in the country you want to live in.
- Finally, once everything is all set up, then you would effectively be a local employee in the country through the service provider’s subsidiary, but you would still be getting direction on what to do for your work from your original employer.
While this is how these arrangements generally work in a nutshell, there are certain to be many more specifics to confirm before you can book your flights. The biggest challenge with this route is mainly that you need to convince your employer to hire the services of one of these companies so they can manage this process on your behalf. The good news is, if they already work with one of these service providers, then your situation should be relatively easy to get set up. Your best shot in this scenario is to inquire about any sort of outsourcing relationships that your company has already established.
Building the Perfect Remote Work Situation
In both my career inside and outside Expat Empire, I’ve seen a lot of different opportunities and scenarios present themselves to all sorts of people. I know very well that every remote work situation needs to be approached with fresh eyes. There is one common thread, however: it will take a lot of planning, so you should get started as soon as possible.
With our consulting capabilities and our network of international partners in many countries, we have the ability to point you in the right direction. As you consider all the variables in your life, know that we are here to help. Get started by booking 1-on-1 coaching sessions with us, incorporating your U.S. company with Firstbase or Business Anywhere, or getting your employer to hire you through Deel, Remote, or Oyster!
Disclaimer: David McNeill, Expat Empire, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. We have not undertaken to independently verify whether this information is complete and accurate as of any particular date or dates. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning, or investment decisions.