Virtual Working Programme



With the series of lockdown in early 2020, there was an evidently abrupt shift from traditional office setup to remote working. One had to adjust their working style to the fast-changing business priorities. By the end of 2020, there was a clear trend about drastic change in post-pandemic working style i.e., ‘Virtual Working’ is here to stay.


Earlier, in a pre-pandemic Global Mobility World, it was common to witness:

  • Secondments / Relocation: Temporary / Permanent transfer to another role or business area away from the primary job.
  • Virtual assignments: A virtual assignee used to do the same job remotely (from home location) as an assignee relocated to the host location. The focus was on working for a specific location.
  • Business Traveler: Supported business operations abroad on an ad-hoc basis.

Now, practically speaking, the new norm of “Virtual Working”, can also take different forms. The primary ones are as follows:

Work from Home wherein employer is allowing an employee to remain in the home country and continue with his current role. Example: An employer in Barcelona, Spain may allow his employee to work for his current role from employees’ home in Barcelona

Remote Working wherein the employer is allowing an employee to work in another country of choice that is neither the home country nor the location benefitting from the task performed. Example: An employer in Barcelona, Spain may allow his employee to work for his current role from Dubai, UAE.

Focus on Virtual Working Programme (‘VWP’)

A few months ago, countries have started opening their international borders.  In lines with the new norm of Remote Working, certain countries have announced VWP over the last few months.

The primary idea is to welcome foreign citizens to work remotely (host location) and legally for their employer or their own company registered abroad (home location). In general, such programs are designed for freelancers, full-time employees or business owners. Each country has its own regulations and eligibility criteria around such programs viz, minimum monthly income threshold, nationality, mandatory health insurance in host location, etc.

Important points to consider

Given the situation, two major stakeholders are the Employee & the Employee. Hence, it is always good to focus on relevant points from both perspectives:

Employer perspective:

  1. Permanent / Fixed Establishment: There could be a situation where Employer has no existing operations in the other country where the work is performed remotely by an Employee. In such a case, the Employer is exposed to risk of having a permanent establishment in the said location. To further elaborate, even in case of GCC countries with no income tax regime, such arrangements could be a possible trigger for fixed establishment for VAT purposes.
  2. Licensing regulations: Depending upon the functions performed by the Employee in the other country, it is pertinent to note whether such activities require any specific license by the Employer in respective country.


  3. Home country compliances: Considering the payroll compliances, it is very much possible that the Employer would need to intimate respective tax, social security, insurance authorities about the Employee’s change of location. This may trigger certain additional / different filings for the Employer in home country.


  4. Legal Angle: Revisiting the legal employment contract between Employer and Employee could be underestimated by the Employer.


  5. Data Protection: Personal data protection regulation preventing data transfer across borders could be an issue which needs focus from organization perspective


  6. Internal processes: A range of issues about technology support, reporting lines, HR local support, and payroll arrangements could hinder the smooth implementation of Remote Working. Without a process or framework organizations can expose themselves to potentially significant people, cost, and compliance risk.

Employee perspective:

  1. Legal permit from immigration: In case of countries, where such VWP are introduced, the Employee would need to obtain necessary permit from concerned authorities. However, in any other country, working for foreign Employer without valid permit (or even on tourist visa) could be illegal and bear consequences (including reputational risk for the Employer).
  2. Individual Income Tax: This is the most common red flag. Working for Employer in home country & physically present in another country adds complicated layers to the individual tax position of the Employee. Lack of tax planning, prior to the move, could result in huge tax cost for the Employee.


  3. Social Security: Given the nature of VWP, it may not come with social security benefits in the other country. Hence, an Employee needs to be mindful of continuance of coverage under social security programs of home country, as applicable.


  4. Health Insurance Coverage: The type and extent of coverage in existing medical insurance policies should be reviewed considering the regulations of the other country. In certain cases, it may be mandatory to take a separate health insurance plan for the other country.


  5. Banking regulations: It would be an open question as to how usual banking operations would work for such an Employee in the other country.

Undoubtedly, VWP could help bring synergy between employees’ aspirations and business needs, while securing business continuity. However, at the same time, organizations need to have an adaptive way of thinking and evaluate compliance constraints and issues.

You should always consult with a mobility expert before you take actions, get in touch with myself or your local Crowe expert for more information around this topic.


Markus Susilo

Partner - Tax

Crowe UAE

 Deepika Chandak_Crowe Dubai

Deepika Chandak

Manager - Global Mobility

Crowe UAE