Skip to main content
Work Abroad
© sawitreelyaon, AdobeStock

These factors are currently making it particularly difficult to work abroad

Global Companies Must Continuously Adapt to Worldwide Economic and Political Changes

In the past decade, global mobility management has had to deal with economic sanctions, protectionist trade policies, Brexit, and crises in Egypt, Libya, and Syria. The COVID-19 pandemic in 2020 further disrupted international trade routes, making overseas assignments difficult or impossible for a while. For the past two years, Russia's war against Ukraine has significantly impacted global trade policies, and recent conflicts in the Middle East have added to the uncertainty.

For assignment policies, this means companies need to reorganize cross-border collaboration with certain countries to secure their production sites. "Additionally, they are assessing whether investments in Europe and the Middle East are still safe and, depending on the industry, are increasingly looking for new markets," says Omer Dotou, Head of Global Mobility Services and Advisory Services at BDAE.

Permanent "Work from Anywhere" is Not Legal

Many employees in Germany dream of a permanent workation, and expatriates hope to work remotely from their deployment location indefinitely. However, Omer Dotou explains that 'work from anywhere' arrangements cannot be legal. Despite the appeal, the practicality is limited.

Dotou supports his stance with examples: During and after the COVID-19 pandemic, temporary allowances for remote work and home office abroad were in place but phased out by 2023. Now, global authorities are focusing on compliance issues, posing a significant challenge for HR managers who must navigate varied interpretations and regulations.

The extent of legal requirements varies based on whether it involves workation or home office within the EU or a third country. According to Dotou, most German companies now allow workation for up to 30 days annually, primarily within the EU. Non-EU employees can make home visits, which helps mitigate risks related to social security and taxes.

EXPATRIATES AdobeStock 351043917© Kateryna, AdobeStock

Risk Factor: Employer of Record

When startups, small and medium-sized enterprises (SMEs), or large corporations want to hire individuals from a third country and engage them in remote work permanently, navigating the legal landscape becomes quite complex. How can these individuals be employed in a legally compliant manner? According to BDAE-Consult experts, the recommended approach is clear: "If companies intend to employ workers from a third country remotely, they should consider establishing a local presence. This ensures full compliance with local laws, including specific social security and tax regulations, rather than German labor laws." Omer Dotou further explains, "While setting up branches in multiple countries can be costly, we advise this as a strategic solution for our clients, especially when hiring skilled workers through established structures."

For some companies that only occasionally engage foreign workers, this solution may not be cost-effective. Instead, they may opt for an "Employer of Record" (EOR), which charges a fee to employ workers exclusively for another company. The actual tasks are performed for the client of the Employer of Record. Dotou emphasizes caution when using an Employer of Record, especially if activities are planned in Germany or involve business trips. This arrangement involves employee leasing with a foreign provider who formally acts as the employer.

Employee assignments abroad continue to present increasing challenges for companies and employees in a regulatory and geopolitically volatile environment. Furthermore, the profile and expectations of personnel being assigned abroad are constantly evolving, particularly among Generation Z, which values flexibility. Balancing flexibility and long-term commitment in global mobility remains a significant challenge, necessitating a reevaluation of incentives for international assignments.

This article is from the 3/2024 issue of the magazine "Life Abroad".

The magazine is published four times a year free of charge with many informative articles on foreign topics.

It is published by the BDAE, the expert for protection abroad.