Remote Work Legal Considerations

Cross-Border WFH & Permanent Establishment: What the 2025's OECD Update Says OECD has published the 2025 update to the OECD Model Tax Convention, approved by the Committee on Fiscal Affairs on 13 October 2025 and by the OECD Council on 18 November 2025. A key highlight: important clarifications in Article 5 Commentary on when an individual’s home can become a “place of business” of the enterprise. Here’s a simplified take: a. Not every home office = PE An employee working from home in another country does not automatically create a Permanent Establishment. b. Key tests still apply: Permanence - Is the place used regularly and continuously? Business use - Is the home truly functioning as a place of business? Nature of activities - Are they core, or merely preparatory/auxiliary? c. 50% Working-Time Guideline If the employee works less than 50% of their total time from the overseas location in a 12-month period - generally no PE. If 50% or more, then a deeper factual review is needed. - The “Commercial Reason” Test – the critical determinant PE risk increases if the employee's presence facilitates business in that country, such as: meeting customers or suppliers, building/servicing a local client base, managing vendor relationships, sourcing or developing business opportunities If the WFH arrangement exists only due to employee preference or cost-saving, not business need - No PE. - Intermittent / incidental interactions: occasional meetings or light-touch activity in that country are not enough to trigger a PE. Bottom Line: The 2025 OECD Update makes one thing clear: Cross-border WFH does not automatically create a tax presence - but sustained, business-driven, on-ground activity can. A timely reminder for multinationals to revisit their remote work, global mobility, and PE risk frameworks. #OECD #OECD2025Update #ModelTaxConvention #PermanentEstablishment #Article5 #CrossBorderWork #RemoteWorkTax #GlobalMobility #InternationalTax #TaxPolicy #TransferPricing #BEPS #GlobalTax #CorporateTax #TaxUpdates #WFHCompliance

The most expensive assumption in cross-border work is that a rule means the same thing in two places. The words are often nearly identical. A licence is a licence. A registration is a registration. A compliance deadline is a deadline. You read the requirement in a second jurisdiction, recognise the shape of it, and assume your existing knowledge transfers. It usually does not, and the gap is rarely in the text. It is in everything around the text. Same requirement, different evidence expected. Same deadline, different definition of when the clock starts. Same approval, different sequence, so what was step four in one place is a precondition in another. Same document, but one authority wants it attested and the other has never asked in twenty years. None of that appears in the regulation. It lives in practice, and practice is learned by getting it wrong, or by asking someone who already has. That is the part people underestimate when they expand into a new market. They budget for the licence fee and the legal opinion. They do not budget for the six months of learning how things actually move, which is the real cost and the real barrier. So the useful posture in unfamiliar territory is not confidence. It is deliberate humility. Assume your instinct is calibrated to somewhere else. Ask the basic question even when you think you know the answer. Find the person who has filed this before and buy them coffee, because an hour with them is worth more than a week of reading. Expertise does not transfer across borders automatically. Judgement does, but only if you are honest about what you do not yet know. ⚖️

“You live in Kenya. You work for a German firm. You’re paid in euros. So why is the Kenya Revenue Authority asking for your PIN?” Because in 2024, “remote” doesn’t mean invisible — at least not to the taxman. Kenya is now home to over 100,000 expatriates — many of whom are paid abroad, work online, and live in Nairobi, Naivasha, or Nakuru. But here’s the thing: If you spend 183+ days in Kenya, you’re considered a tax resident. If you're working for a Kenyan company (even while abroad), you need a KRA PIN. And if you're hiring remote Kenyan talent from overseas, you could trigger corporate tax liabilities without realising it. This isn’t just about income. It’s about compliance, cost, and consequences. We just released a sharp, simplified guide: 👉🏾 “Am I Being Taxed Twice?” – The Expat & Remote Worker Survival Kit for Kenya. The newsletter is attached and can be shared. It unpacks: ✅ How double taxation actually works ✅ Whether you're protected under a DTA ✅ What “permanent establishment” means for remote employers ✅ Why failing to register for a KRA PIN could block your salary, your lease—or worse This is for expats, global employers, and anyone who’s ever wondered: “How can I work in one country… and get taxed in two?” 💬 Questions after reading? We’re helping clients across the globe navigate this new reality. Because in the age of digital work, compliance is no longer a location—it's a strategy. #DoubleTaxation #RemoteWork #ExpatriatesInKenya #KRA #TaxCompliance #MMWAdvocates #CrossBorderLaw #TaxStrategy #LegalWithPerspective

Today, a growing proportion of cross-border work no longer resembles traditional mobility. An employee hired in France spends several months working from Portugal. A software engineer based in Germany decides to work from Thailand during part of the year. A manager approves an extended stay abroad because operationally it appears harmless and productivity remains unaffected. This is shadow mobility: a population of employees whose cross-border work sits outside formal mobility processes or remains only partially visible to the organisation. None of these arrangements may trigger a mobility process. Yet each has the potential to create consequences for employment law, payroll, tax, benefits, compensation and workforce governance. What makes shadow mobility particularly challenging is that it rarely emerges through deliberate non-compliance. Most employees involved do not perceive themselves as international assignees or expatriates. They see themselves as remote workers exercising a degree of location flexibility, and their managers often share the same perspective. As a result, organisations are increasingly managing a population of internationally mobile employees that exists largely outside the frameworks designed to govern international mobility.

Hiring freelancers directly can seem like a quick win—until it isn’t. After 15+ years helping businesses scale with remote teams, I’ve seen firsthand the top five risks companies face when going it alone: - Worker Misclassification: Get this wrong, and you’re staring down hefty fines, back wages, and legal headaches. Recent rulings in Australia show that “contractors” can be reclassified as employees if you set their hours or direct their work—triggering obligations for leave, superannuation, and more. - Compliance and Legal Exposure: Employment law isn’t just local anymore. Directly hiring offshore freelancers can leave you exposed to cross-border legal disputes and HR claims, which can damage your brand and stall growth. - Payroll and Tax Complexity: Managing payments and taxes for a global freelance workforce is a minefield. One slip—missed documentation, wrong tax form—and you’re at risk of audits and penalties. - Data and IP Security: Freelancers often work remotely, sometimes on personal devices. Without proper contracts and controls, your sensitive data and IP are vulnerable to misuse or theft—prosecution across borders is rarely simple. - Investor and Reputational Risk: Investors are scrutinizing compliance and ESG practices. Poor hiring models can jeopardize funding, M&A, or IPO readiness. Your reputation is on the line. At Cloudstaff, our mission has always been to mitigate, if not completely remove these risks. We combine ethical hiring, ironclad compliance, and enterprise-grade tech to protect your business—so you can focus on growth, not firefighting. For 15 years, we’ve helped companies navigate the complexities of remote work, ensuring your teams are compliant, secure, and ready for the future. If you want to scale safely and sustainably, let’s chat. #Cloudstaff #EthicalOutsourcing #WorkforceCompliance #FreelanceRisks https://lnkd.in/gPTW5qtb Paul Findlay Sally Simmons Paul Dove Kyle Merritt Jamie Stewart Alison Newman Matthew Paul Rutter Michelle Carbonel

#CrossBorder work in #Europe has entered a new, more structural phase. The latest data on A1 certificates for #socialsecurity coverage for 2024 shows: 🔹 Rise of #multistate work – There is strong growth in A1s for work in two or more countries, reflecting new business models and more complex, ongoing multicountry roles. 🔹 More third‑country nationals – A1s for non‑EU/EEA/Swiss nationals are increasing, both for short‑term assignments and continuous multi‑country work. Nationality is becoming a key data point for monitoring labour markets and compliance. 🔹 Telework framework - Switzerland stands out, where aligned social security and tax changes make remote cross‑border work more practical. 🔹 Sharper enforcement – Authorities are leveraging structured data, #digitalisation, and cross‑border cooperation to scrutinise A1 use and labour standards more closely, with more dialogue and conciliation between institutions. Taken together, these trends – and the clear shift towards stronger enforcement – mean that businesses should expect more questions, more documentation requests, and fewer “informal” fixes. It’s not just about having an A1 or a policy on paper; it’s about the quality of compliance: Are roles and work patterns genuinely aligned with the declared social security position? Is the decision‑making documented, consistent, and defensible across the organisation? Can you explain your approach clearly to both employees and authorities? Those who invest in high‑quality, principles‑based compliance – not just ticking boxes – will be better positioned to support #mobility, manage #risk, and maintain trust with regulators and their workforce.

A genuinely ground-breaking update in the world of international remote work compliance has just landed from the OECD. The 2025 Update to the OECD Tax Model Tax Convention finally gives clearer direction on how cross-border home working should be treated for tax treaty purposes. One of the biggest shifts is the new guidance in the Commentary to Article 5 on when working from home in another jurisdiction might create a fixed place of business permanent establishment. It is not a free pass and it does not remove permanent establishment risk altogether, but it does bring some long overdue common sense into an area that has frustrated corporate tax teams for years. Here are five takeaways from the new guidance: ✔️ If someone works from home in another country for less than half of their working time across a year, then in most cases it will not create a permanent establishment. ✔️ Even if they spend more than half their time working from abroad, that still does not automatically create a permanent establishment. What matters is what they actually do there. ✔️ If the employee is abroad purely for personal reasons and the company has no real business need for them to be in that country, the risk is generally low. ✔️ Just using a home office regularly does not make it a permanent establishment unless it genuinely becomes part of how the business operates. ✔️ What really counts is the overall story: how often the employee works there, what they do, and whether their work in that location meaningfully drives the company’s business in that country. A key point worth highlighting is that every request still needs to be assessed on a case-by-case basis. No two situations are identical. But this updated OECD guidance does meaningfully reduce the level of risk for arrangements involving OECD countries. For many organisations, this update could ease a lot of internal tension. If your tax team is still declining international remote work requests purely because of permanent establishment concerns, it is worth sharing this guidance with them if they have not reviewed it yet. Of course you still need proper safeguards and structure in place. If you want to see how we approach that with our own award-winning Work From Anywhere platform, I would be happy to walk you through it. Our view is that this guidance puts modern WFA frameworks and policies firmly centre stage as a powerful driver of employee retention. If your legal or tax teams are still saying no by default, now is the time to challenge that position and show that there is a balanced way to do WFA. 🔗 https://lnkd.in/dYKXgGzf

The Australian Fair Work Commission recently handed down a ruling that companies with international contractors need to pay attention to. A Filipino paralegal who'd never even stepped foot in Australia was deemed to be an Australian employee, despite the fact her employer classified and paid her as a contractor. The problem? She worked Australian hours, reported to Australian managers, and did the same work as local employees. The Commission's decision was that she's entitled to Australian wages, employment protections, and even back pay. This hits on something I've been seeing for years: companies using contractor classifications as a shortcut to avoid dealing with complex employment laws. The thinking usually goes: "If we call them a contractor and they're in another country, we don't have to worry about employment compliance." This case shows that logic is flawed. 𝗪𝗵𝗮𝘁 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗱𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲𝘀 𝗲𝗺𝗽𝗹𝗼𝘆𝗺𝗲𝗻𝘁 𝘀𝘁𝗮𝘁𝘂𝘀 𝗶𝘀𝗻'𝘁 𝘁𝗵𝗲 𝗹𝗮𝗯𝗲𝗹; 𝗶𝘁'𝘀 𝘁𝗵𝗲 𝘄𝗼𝗿𝗸𝗶𝗻𝗴 𝗿𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽. If someone works your schedule, uses your systems, takes direction from your managers, and does work that looks like what an employee would do, simply calling them a contractor doesn’t make it true. Even if they have their own business entity. Even if you have a clearly defined contractor agreement. ------------------------------------------------------------------------ From my years working in the EOR space, I've seen this pattern repeatedly. Companies assume geographic distance creates legal distance. It doesn't. The challenge is that most businesses don't have the expertise to navigate employment law across multiple countries. And it is understandable that they default to the contractor route believing it to be simpler. But as this ruling demonstrates, "simpler" often means "riskier." When you're building a global team, the question isn't whether you can find workarounds. It's whether you can build sustainable, compliant employment relationships that protect both your business and your people. That requires understanding the laws that actually apply, not just hoping they don't. If you have any questions about any of this, our team at Boundless would be happy to talk you through your options. #GlobalHiring #EmploymentCompliance #InternationalBusiness #RemoteWork #BusinessRisk

Digital Nomad? Thinking about working remotely while visiting the U.S.? Be careful; it might not be authorized. If you plan to work online while in the U.S., even for a foreign employer, you may be violating immigration rules. The U.S. doesn’t currently offer a digital nomad visa. Tourist visas like the B-1/B-2, the Visa Waiver Program (ESTA), or visa-exempt Canadians do not allow remote work, regardless of where your company or clients are. Who counts as a digital nomad? Anyone working online while traveling or living in another country, whether as a freelancer, remote employee, or business owner. Even if the income comes from abroad, U.S. immigration law looks at where the work is performed. What does the B-1/B-2 visa allow? * B-1: Limited business activities like attending meetings or negotiating contracts * B-2: Tourism, visiting family, or medical treatment Neither allows remote work nor provides ongoing, unpaid services for a foreign company. What is considered “work” by U.S. immigration? Under INA 101(a)(15)(B) and the Foreign Affairs Manual (9 FAM 402.2), work includes any activity that brings income, replaces a U.S. worker, or involves productive labor. That means things like: * Logging into your company’s system * Responding to client messages * Deliver digital products or services Doing this while physically present in the U.S. could be considered unauthorized employment. What are the risks? Trying to work remotely while on a tourist visa can lead to: * Denied entry at the airport * Visa cancellation * Inadmissibility under INA 214(b) Simply saying “I work online” may raise red flags with U.S. Customs and Border Protection. You must clearly show that your visit is temporary and for permitted reasons. Is there a U.S. digital nomad visa? No. Unlike some countries that offer remote work visas, the U.S. has no visa category specifically for digital nomads. Are there any visa options that support remote work? Some employment-based or investment visas might allow it, depending on your situation. These all require employer sponsorship, specific qualifications, or investment; none are designed for freelance or independent remote workers. Don't rely on a tourist visa if you're considering working from the U.S., even temporarily or part-time. #RemoteWork #ImmigrationLaw #USImmigration #DigitalNomads #GlobalMobility #B1Visa #ESTA #WorkFromAnywhere #Canadian #Visitorvisa

If you employ anyone on F-1 OPT or STEM OPT, your remote work policy could create immigration compliance risks without anyone realizing it. Most work-from-anywhere policies are not designed around the federal rules that govern F-1 students on OPT and STEM OPT. Here’s what employers should know: OPT participants are limited to 90 cumulative unemployment days. STEM OPT adds 60 more, for a total of 150 across the full OPT period. Going over those limits can result in SEVIS termination under DHS regulations. Long periods working remotely outside the US can also create status complications. Official guidance and university international offices flag that absences of more than five continuous months may disrupt F-1 status continuity or SEVIS eligibility, especially during post-completion OPT and STEM OPT. What makes remote work abroad complicated is that DHS regulations define unemployment limits but leave a gap on how extended work performed entirely outside the US should be treated for OPT maintenance purposes. The practical implication for employers: Remote work policies should not always be applied uniformly to visa holders. International employees may need specific guidance around travel duration, remote work arrangements, reporting obligations, and immigration status maintenance. p.s. If you're hiring or managing international talent and want clarity on what's compliant, feel free to reach out to us at Alma. Link in the comments.