--- title: "Working from a foreign country: what does an employer need to know?" date: 2026-05-21T14:13:33Z modified: 2026-09-14T16:40:06Z permalink: "https://grow.ee/millega-peab-tooandja-arvestama-kui-tootaja-tahab-teise-riiki-kaugtood-tegema/" type: post status: publish excerpt: Working from a foreign country brings with it tax and legal issues that the employer needs to know. wpid: 15340 featured_image: "https://grow.ee/wp-content/uploads/2026/05/Tootamine-valismaal.png" featured_image_alt: Working abroad timestamp: 2026-09-14T16:40:06Z tags: - Accounting --- ![](https://grow.ee/wp-content/uploads/2026/05/Tootamine-valismaal-1.png) More and more often, employees want to work from a foreign country for a while or even for a longer period. For the employer, however, this is not just a work organization issue - a remote employee moving to another country may bring with it tax, social security and labor law obligations. It is worth considering these issues before granting permission. **Is this remote work, secondment or posted employee?** The first step is to correctly define the situation. If an employee does their regular work in another country and this is done by agreement of the parties, it is generally considered remote work. However, if an employer sends an employee temporarily to a foreign country to perform a specific task, it is a work posting. In the context of the European Union, the regulation of posted workers is also added if the employee provides a service in another member state on behalf of the employer. In this case, the mandatory working conditions of the host country must be taken into account (for example, minimum wage requirements and working and rest hours). Correctly defining the employee's status is important, because it determines which taxes, benefits and labor law rules will apply. **Remote work from a foreign country must be agreed in writing** Working from a foreign country should not be based solely on verbal agreement. It is recommended to conclude a written remote work agreement or an addition to the employment contract, which clearly states: - from which country and address the work will be performed; - how long the work from a foreign country will last; - what the working hours and availability are; - who bears the additional costs related to the work; - under what conditions the employer may withdraw the permit. A clear agreement helps to avoid disputes and gives the employer the opportunity to react if tax-related or legal risks arise. **Tax issues do not begin or end with 183 days** It is often believed that if an employee stays abroad for less than 183 days, there are no tax obligations, but in reality the situation is more complicated. When assessing teleworking abroad, the employer must base its assessment on the tax treaty concluded with the foreign country and obtain clarity on the following issues: - whether the employee can become a tax resident of the foreign country; - whether the salary can become taxable in the country of employment even before the change of residency; - how the taxing right is distributed between Estonia and the destination country based on the relevant tax treaty. In addition, it must be remembered that although a tax treaty limits the taxing right of countries, it does not automatically exempt the employer from local registration or reporting obligations. Even short-term employment may result in the obligation to register as an employer in a foreign country. **Does the employer face a risk of a permanent establishment?** Long-term teleworking from a foreign country may also result in tax obligations at the employer level in that country. If the employee's activities are commercially significant (for example, sales transactions, concluding contracts or management functions), the destination country may claim that the Estonian company has a permanent establishment there. This in turn may mean corporate income tax, accounting or other obligations in the destination country. The longer the period of employment abroad and the greater the employee's decision-making power, the greater the risk. **Social insurance and A1 certificate in the European Union** When moving between EU countries, it is not enough to just know where the employee is physically located. It is also important to know which country's social insurance is valid. In the case of temporary employment from a foreign country, an A1 certificate is often required, which confirms that the employee remains covered by Estonian social insurance. Without a valid A1 certificate, the destination country may require payment of social taxes into its own system. The A1 issue should always be resolved before the employee moves abroad. If the employee lives abroad for a longer period, additional documents may also be needed to arrange health insurance. **Occupational safety and data protection remain the employer's responsibility** Even when working from a foreign country, the employer must ensure that the work is organized safely. This means that the employer must consider whether the employee's working conditions are suitable and whether the work tasks are organized in a way that does not endanger the employee's health. In addition, data protection and information security become important. Working from home networks, public WiFi networks or personal devices increases the risk of data leakage. Therefore, the employer should have clear rules on the handling of work equipment, VPN, passwords and confidential information. **Summary** An employee's desire to work remotely from a foreign country is not a problem in itself, but it is an additional risk for the employer. Before granting permission, the following should be assessed: - the legal form of the work; - the impact of tax residency and tax treaty; - the organization of social security; - the risk of a permanent establishment; - occupational safety and data protection requirements. The longer the period of working from a foreign country, the more important it is to conduct a more thorough analysis. Many problems can be prevented if these issues are resolved before the employee moves abroad, not after. 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