Chapter 1: A question of definition - what is remote work anyway?

The change in the work environment has been tremendous in the past years (not least due to the pandemic). From one week to the next, employers created the necessary infrastructure to enable a large part of their employees with "screen jobs" to work from home. This not only led to widespread acceptance of the home office but also to the desire of employees to be able to work more flexibly in the future.

"Dream Office", "Workation", "Working from anywhere", but also "International Remote Working", "Virtual Assignments" and "Hybrid Work" found their way into business terminology. However, there is barely a uniform definition of these terms. Therefore, the understanding of these concepts varies not only from one company to another but also among (HR) employees. We will, therefore, attempt to define selected terms and differentiate them from "remote work":

  • Hybrid Work: Employees work both in the home office and in the employer's office. "Hybrid teams" work either on the same days in the office in the home office or also opposite locations to make maximum use of office space.
  • Virtual Assignments: In virtual assignments, the employee temporarily takes a new job abroad for the same employer, but the employee does not move abroad. He or she performs the new activity almost exclusively "virtually," i.e., with the help of the appropriate IT infrastructure at his or her previous place of residence or work.
  • Workation: Working at vacation locations at the request of the employee is also called "workation". While many employers would like to accommodate this request, at least temporarily, they face many administrative and legal hurdles in this regard.
  • Dream office & Working from Anywhere: Similar to "Workation", the employee sets up his or her desired workplace at his or her favorite work location. Depending on the employee's wishes, this could be a permanent or changing solution at home or abroad.
  • (International) Remote Work: The definition of "remote work" goes beyond the actual work in the home office at the place of residence. Remote work can (but does not have to) take place at foreign destinations. Employers often limit remote work to the domestic territory to avoid difficulties regarding social security, taxes, work permits, and possible permanent establishments.

Many employers are still reluctant to completely relocate jobs to the "dream office" or international remote work destinations, as this can involve, among other things, considerable pitfalls in terms of income taxes, social security, payroll, permanent establishments, and work permits. For important key functions, however, this is an excellent way to attract qualified employees, provided the initial efforts of legal clarifications and implementations within the company are not shied away from.

In the following series, we will provide you with a step-by-step guide on how to implement remote work abroad in a legally compliant manner. We will focus on the technical aspects of income taxes, social insurance, and work permits for international remote work.

Whether your employees only want to work remotely abroad for a few weeks, or you are hiring qualified employees with a foreign place of residence and work. With our help, you will be able to lay the foundations for remote work in your company.

  • Part 1: A question of definition - What is remote work anyway?
  • Part 2: Social security for remote work abroad
  • Part 3: Income Taxes for remote work abroad
  • Part 4: Work permits for international remote work
  • Part 5 (Monthly Special): Detailed practical cases of remote work for HR departments regarding income taxes, social insurance, work permits, payroll, and employment contracts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.