Relocating while working remotely: Everything you need to know

One of the greatest benefits of remote work is that it allows for location independence. If you can work from home, you can basically work from wherever you want. For some remote workers, their favorite work location is the comfortable coworking space just down the road or the cute little café a few blocks from their flat.

For others, remote work opens up opportunities to move to a different country. Infact, remote work relocation is becoming increasingly popular. A new study published by Upwork shows that, since 2020, 4.9 million Americans have already moved due to remote work, and another 18.9 million are planning to do so. 

As tempting as it may be to just leave everything behind and move to the country of your dreams, there are several things to consider before you can officially kiss your old life good-bye and make a fresh start abroad. But don’t worry! We’ve got you covered. This blog post tells you everything you need to know about relocating as a remote worker so that you can be on the safe side when finally making the move.

Maybe you’re already all set to start your adventure abroad, but have you really thought this all the way through? As with other major life decisions, relocating as a remote worker requires careful planning and preparation. Here are some things you should definitely consider before making any final decisions.

Remote job relocation could come with a pay cut and higher taxes

Even if you’re relocating to a country where life is cheaper than in your current country of residence, it’s important to know you’ll be financially secure. Sure, keeping your remote job when you relocate will guarantee a continuous stream of income, but have you thought about the potential financial consequences of relocating? 

Many remote companies have compensation strategies based on geography, which means that pay is adjusted according to employee location. When moving to a country with a lower cost of living, you might have to accept a pay cut. 

Also, tax systems differ from country to country. If you’re unlucky, the tax system in the new country is less beneficial for your personal situation than the old one. Or social security contributions on employees might be significantly higher. Consider this when choosing the country or region you want to move to.

Eager to move but haven’t found the right place yet? Check out the top 5 destinations for remote work in 2022.

Relocating to remote areas often means poor connectivity

Unfortunately, the idea of being able to work from wherever you want is not one hundred percent true. The key prerequisite for remote work is a laptop and a stable internet connection. And while a working laptop is probably a done deal, the same can’t be said for a stable internet connection.

If you’re planning on taking the “remote” part in remote work literally, i.e. by moving to a small village somewhere in rural Italy or somewhere else remote, you might want to check the quality and stability of the local internet connection first. Otherwise, your employer might quickly change their opinion about your remote work relocation project.

Relocating as a remote worker may require a special visa

Regardless of whether you intend to stay for a couple of months, a year or for an indefinite term, checking for visa requirements is a must. This not only includes requirements for permanent residency but also special work permits etc. 

Before doing any major planning, check whether you are legally allowed to work in the country you want to relocate to. If yes, are there any time limits on how long you can stay and work there? Are there any options for extending your stay once the initial period is over? 

Want to test the waters first before relocating permanently? That’s what remote work visas are for. We’ve listed the 27 most popular remote work visa countries in a separate blog post for you.

Remote job relocation only makes sense with a truly remote position

Many people have only started to work remotely because of the pandemic. Although most workers were able to fulfill their main job duties, some parts of their normal job routine went missing along the way.

In short: There’s a big difference between a job that can (temporarily) be done remotely and a truly remote position. If you seriously consider relocating as a remote worker, you should ask yourself whether your position is remote in the long-term.

Relocating as a remote worker can impact your career

It’s a sad truth that remote employees are less likely to be promoted. As a survey conducted by leadership advisory firm Egon Zehnder shows, 70% of C-suite leaders think that remote employees are more likely to be passed over for leadership roles due to the lack of physical visibility.

So be aware that saying good-bye to the office for good and moving to another country could also mean saying good-bye to promotions or other rewards. Just as the old saying goes: Out of sight, out of mind.

Remote work relocation can have unwanted tax implications for you and your employer

If your employer is not keen on the idea of seeing you relocate to another country, it’s most likely because it may involve additional obligations and legal implications for the company. Having employees in different geographies where the company isn’t incorporated can entail permanent establishment and other tax liabilities. 

What’s more, relocating as a remote worker can also bring additional tax complexities for you as the employee. Let’s just assume that you work remotely from your new home most of the year and thus pay income tax in your new country of residence. That’s all fine until you need to go back to your company’s headquarters for a special project - or even several times a year to complete non-remote assignments and tasks. Depending on the country and the length of your stay, this could make you liable for income tax in your company’s jurisdiction as well. 

In a nutshell: Remote work relocation can trigger international tax liabilities both for you and your employer.

Moving while working remotely requires changes in your employment

Every country has different labor laws and regulations - sometimes employment laws even differ between states or provinces within the same country. This includes standard working hours, overtime, annual leave, sick days and other employee benefits. When you relocate as a remote worker, your employment contract and benefits package need to be adapted to the laws of your new country of residence to guarantee compliance. 

Furthermore, many countries require businesses to have a local legal entity in order to act as a legal employer. So unless the company you work for has an office or a subsidiary abroad, you’ll have to find an alternative employment solution to keep working for your current employer. Here an Employer of Record can help. 

An Employer of Record (short EOR) is a global employment solution which allows companies to retain remote employees who decide to relocate to a different country where they don’t have a foreign legal entity. The EOR partner then acts as a third party in the employment relationship and takes over the role as your legal employer while you continue to work for your old company as usual.

Got more questions about Employer of Record services? Then check out our related blog post “Employer of Record: The most important questions for employees”.

Once you’ve considered all the different hurdles that could cause your remote relocation project to fail, it’s time to kick things into action and prepare for your move. Here are some practical tips on how to make relocating as a remote worker happen.

Talk to your employer first

Although you might read about people who skip this step and relocate straightaway, moving without telling your employer is not a good idea. If you don’t tell your employer about your plan, your relocation could have severe negative consequences on your employment.

In the worst case, your employer might dismiss you or ask you to quit your job for moving without informing the company first. And being jobless in a country you’ve only just recently moved to is not a situation you want to be in.

If your company has a flexible remote work policy, chances are your employer won’t mind you moving to a different country. However, some businesses are reluctant to let their employees relocate to a different country - even though they allow them to work from home. 

Businesses usually have good reasons for denying remote employee relocation requests. Keep this in mind when trying to come to an agreement with your employer, and don’t forget to suggest an Employer of Record arrangement.

Make arrangements with your team before you move

Once you’ve got the all-clear from your employer, you can start moving forward and prepare for your move. With regard to your work, this means informing your team at work that you'll be relocating and going fully remote. 

Start working out a plan to make sure communication and communication will run smoothly after the move. Consider different time zones and talk to your line manager and colleagues about when you need to be available. Also, think about online social hangouts and other virtual team building activities to keep the connection with your colleagues up.

Allow for a transition period

No matter how carefully you planned it all out in your head (and possibly on paper), there’s a big chance that not everything will go according to plan. Maybe it will take longer than expected to establish a solid internet connection at your new home. Or maybe you’ll struggle to settle into your new routine. Or maybe the furniture for your new remote office doesn’t get delivered in time. 

Make sure to plan for hold-ups and other technical problems and adjust your workload accordingly. Keep your schedule flexible in the first few weeks and make sure your teammates are aware of the circumstances.

In many cases, you’ll need a vetted Employer of Record by your side to make your relocation happen without having to give up your current job. Unfortunately, researching and comparing service providers takes an awful lot of time, and your employer probably won’t be keen on having to deal with that too - after already having approved your relocation request. Yet another problem is that there’s no way of knowing if the service provider you’ve chosen is really as good as they claim to be. 

This is where a global employment solution like Lano comes into play. We work with a global network of trusted Employer of Record partners that have a proven track record. And with a global coverage of over 170 countries, you can be sure to find an EOR in the country you want to relocate to. Tell your employer about Lano and turn your dream of relocating as a remote worker into reality.