Overseas remote working can support mobility and flexibility, but it is never risk‑free. Employers should assume that employment, tax, immigration and regulatory issues can all arise at once, and that clear governance is essential.
Published: 11 June 2026
Authors: Amy Frost
Critically, the duration of any overseas remote working is not the defining issue; role, authority, location and what the employee does on the ground matter far more. As a result, approval of overseas working must be done on a case‑by‑case basis, consistently handled, and underpinned by clear governance.
The reality employers are facing
Post‑pandemic working patterns continue to evolve. Many UK employers are seeing growing requests to work from another country, from extended “workcations” to employees moving home overseas and never returning, to ongoing remote‑from‑abroad roles in sectors where work is readily portable (notably financial services and technology).
Risks relating to these arrangements are routinely underestimated across the board. That does not mean overseas arrangements can’t work; it just means they need clear governance and boundaries, and employers should not simply green‑light requests without careful consideration and coordinated legal input.
Which law applies?
A UK contract with a governing law and jurisdiction clause does not necessarily disapply mandatory host‑country employment protections. Over time, overseas working can pull in local dismissal protections, notice/severance rights, working time/holiday rights, and collective rights.
The problem often surfaces at the worst moment for an employer, for example when performance management or termination is on the table and the employer then discovers they may need both UK and local legal advice, with cost, delay and litigation risk that weren’t priced in at the outset.
As a general observation, many EU jurisdictions tend to be employee‑protective, while the US is often less so (subject to significant state‑by‑state variations).
Immigration considerations
Ideally, the immigration position should be checked by a specialist because local rules vary widely (including for a country’s own nationals engaging in certain categories of work). Copies of passports or evidence of nationality help but are not a guarantee that the employee will have the right to work. UK employers will recognise how serious this can be where civil penalties for illegal working in the UK can be up to £60,000 per illegal worker for repeat breaches - a reminder that other countries can be just as strict and just as costly to get wrong.
Corporate tax, payroll & social security considerations
Remote working overseas can raise corporate tax risks for UK employers, particularly where senior employees are involved. If a director attends board meetings from abroad, there is a risk that the company’s place of central management and control could be seen as outside the UK, potentially resulting in dual residence, additional filing obligations and tax leakage.
Separately, an overseas permanent establishment (PE) may arise if the employee’s activities create a taxable presence—particularly where they work from an employer-provided office, perform key strategic or revenue-generating functions, or have authority to conclude contracts. The more senior the employee, the greater this risk. If a PE is established, profits attributable to it may be taxed overseas (subject to any applicable double tax treaty). Employers should therefore assess roles, activities and working arrangements carefully and implement appropriate governance to mitigate these risks, as issues can be difficult and costly to unwind once they arise.
Payroll and social security obligations must also be considered. An employee working overseas may trigger local payroll withholding requirements and/or employer social security liabilities in the host jurisdiction, depending on factors such as the duration of the arrangement and the applicable domestic law. Where a bilateral social security agreement applies, it may be possible to maintain UK National Insurance contributions for a limited period; otherwise, dual contributions or host-country obligations may arise. Employers should therefore review reporting obligations and ensure appropriate payroll arrangements are in place before overseas working begins.
Operational and regulatory considerations
Alongside employment, immigration and tax risks, employers should also be mindful of several operational and regulatory considerations that can arise when employees work from overseas.
UK employers retain the same health and safety duties for employees working remotely including overseas as they do for those on‑site. The HSE confirms that employers must assess risks associated with home or remote work, including workstation setup, equipment safety, and stress or wellbeing concerns, and take appropriate steps to protect employees’ health wherever they work. Acas guidance reinforces that employers remain responsible for supporting the mental and physical wellbeing of remote workers and should maintain regular communication, ensure suitable arrangements are in place, and address any concerns regarding the home‑working environment or the employee’s circumstances.
Practicalities like time‑zone differences and communication rhythms also matter since they affect both the employee’s performance and their wellbeing.
UK employers should also consider data protection issues when employees work from overseas. The ICO’s updated guidance sets out a straightforward three‑step test to help organisations understand when sending or accessing personal data from another country counts as a “restricted transfer” under the UK GDPR. In practice, this can be triggered where data is sent to or accessed by a separate legal entity outside the UK. The guidance also makes clear that employers must still think about data security, access controls and how information is stored or transferred when staff work abroad.
These issues may not always be the primary drivers of risk, but they form part of a broader governance picture. Employers should factor them into their overseas‑working assessments to ensure remote arrangements remain lawful, safe and operationally viable.
Role and location factors
Certain roles, such as directors and regulated financial services roles, might also trigger the need for additional regulatory permissions, supervision and location‑based requirements.
In addition, the location the employee is planning to work from can also give rise to further considerations that will need to be assessed. For example, is there political instability or conflict there? Do local laws materially conflict with your organisation’s values (for example, LGBTQ+ protections)? These can potentially be legitimate grounds to refuse or apply tighter controls to an overseas working request.
Where this leaves HR leaders
Global mobility enables growth and done well, can be a competitive advantage. But it is not a “flexible benefit” that can be waved through on trust every time. Every cross‑border working request is a mini governance exercise that spans employment, immigration, tax, data and regulatory questions and the hardest issues appear late if they’re not addressed early.
Some practical tips for employers to consider:
- there is no days‑based “safe harbour”. Duration is relevant, but not determinative. The risk picture depends on role, authority, activities, and location
- implement mandatory pre‑approval for any overseas working. Employees should always seek permission from their employer before working abroad. The employer can then coordinate legal, tax and compliance input as needed
- consistency matters. Handle like‑for‑like requests consistently to reduce discrimination risk and maintain a clear audit trail of decisions and rationales
- if, following assessment, overseas working is permitted, the decision should be recorded in writing detailing scope, location, responsibilities, time‑zone expectations, authority limits, data/security controls, IP ownership, review periods and end points. Employers need to remember that governing law and jurisdiction clauses won’t always disapply mandatory local rules and they should plan on taking host‑country legal advice in additional to UK advice
- plan for drift. Employers should decide in advance how they will handle extensions, what happens if the arrangement becomes long‑term, or if the employee refuses to return
What to do next
Employers should audit what’s already happening in their organisations and consider requiring pre‑approval for anything new.
Employers should also build a case‑by‑case decision process that is clear and consistent and seek targeted advice early on when considering any requests to work abroad so that risks are managed before they crystalise. The goal isn’t to shut down flexibility via global mobility, it’s to protect the business while enabling it.