Remote Work in the European Union - Back to the fEUture

The pandemic forced us to overhaul traditional ways of working with remarkable speed and flexibility, shifting to remote work as the new normal. This showcased that in a globalized world, with a smorgasbord of digital tools, workers can be productive regardless of their location. But how does this impact immigration? And might the European Union turn this into an opportunity to attract the mobile migrant talent it craves?

 

Setting the stage

What categories of migrant worker fall under this broad concept of “remote work”?

• • • Telecommuters: Individuals working within commuting distance from the office. This includes permit holders working from the same country as their employer and cross-border or frontier workers.
      • • Cross-border or frontier workers. Individuals living just across the border from their employer and combining residence and work authorization from two states.
    • Remote Workers: Individuals working beyond commuting distance to the office in a more permanent arrangement, including from another country.
    • Digital Nomads: Individuals working for an employer or client(s) abroad while based in another country, with no fixed ties to an office or client location, typically regularly changing their residence country.

 

Smooth sailing for telecommuters and frontier workers

Telecommuting covers the biggest chunk of pandemic remote work and is less controversial from an immigration standpoint—in Europe, at least. Most European countries allow permit holders to work from home with an employment contract addendum plus, in some instances, immigration notification. This includes remote workers based in the same country as their employer.

Similarly, frontier workers—the oldest category of ‘remote workers’—typically benefit from tailored regulations and concessions, even if eligibility criteria tend to be restrictive (e.g., dictating how far from the border you can live to be eligible). Nevertheless, more harmonization is welcome—but we’ll leave that for a future blog.

 

Tiny window for remote workers and digital nomads

Remote workers based in another country as their employer and digital nomads often find themselves in a regulatory grey zone.

In 39 surveyed European countries:

• • • 11 countries ban all remote work for non-residents
    • 23 countries permit remote work for a few days, if incidental to a primary purpose of stay such as a business or private visit
    • 2 countries do not clearly regulate one way or the other
    • 3 countries allow remote work as a primary purpose of stay: Estonia for migrant workers on Schengen Area employment contracts; and Latvia and Luxembourg for up to 90 days

Harmonization, anyone?

 

Regulatory gap for remote workers

Migrants seeking remote work or digital nomadism for more than a few days need an immigration status—entry, work and residence authorization—in their host country. But in Europe, without local work activities or local sponsorship, obtaining immigration status is virtually impossible outside bespoke Digital Nomad programs. Interestingly, service companies are starting to offer local employment and sponsorship, future-proofing immigration options ahead of governments.

Hang on – weren’t we one Europe? Wasn’t this a globalizing world? Why not welcome migrants with a steady job and stable income – in another country?

Even if immigration status can be resolved through creative use of private, family or investor status, there are posted worker, social security and tax implications to consider. Limited work in the country of residence could necessitate posted worker notifications; prolonged changes in work or residence location could cause a social security shift; and any extended remote work could inadvertently trigger establishment of tax residence for the home employer in certain EU countries. These regimes are not harmonized across EU Member States and require country-by-country compliance checking.

 

Options for digital nomads

Seven countries now offer Digital Nomad visa types: Croatia, Estonia, Georgia, Germany (limited nationality list), Greece, Iceland and Malta. These programs typically require substantial funds, and limit stays to six to 12 months—attracting the sought-after category of migrant. Although perfectly suited for digital nomads, this arrangement does not suit remote workers seeking a more permanent arrangement, as only Greece and Malta allow stays beyond 12 months.

 

Looking ahead

Whether by preference or necessity, remote work is here to stay. Pandemic-related concessions have shown political will and diverse solutions to address remote worker needs. Digital nomad programs are addressing these needs, but only for a narrow migrant group and with wide variation between countries. Now that ad hoc concessions are being phased out, there is a prime opportunity for the European Union to step in and set its policy for the future of EU-wide remote work.

Although immigration, tax and social security are at the heart of national competence, ever-increasing globalization of work requires EU support to come to cohesive, enduring policies. This fits current EU efforts towards Work-Life Balance (telecommuting), making free movement of work and services feasible and effective (remote work), and creating an EU Talent Pool—attracting and retaining foreign talent in the region (Digital Nomads).

It would naturally fall under the EU mission to craft remote work policies, for instance, by establishing broader mobility rights and harmonizing work authorization exemptions for EU permit holders (similar to those in place for EU Intra-Company Transferee Permit holders, Students and Researchers); clarifying pain points related to tax and social security; or even introducing EU-wide Remote Worker (and Digital Nomad) permit types.

Let’s ease back into the European mindset, embracing sustainable mobility, converting what we’ve learned into durable mobility policies, and building on individuals’ and businesses’ eagerness to move forward. Fragomen has a position paper on remote work ready to support that effort.

 

 

Need to Know More?

For further information on this topic, please contact Ana Sofia Walsh at [email protected] or Jeannou Smallenburg at [email protected]. This blog was published on 9 November 2021, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, Twitter, Facebook and Instagram.