When an engineer asks to work from another country for a few weeks or months, say yes only after you have checked three things: whether their presence could create tax or payroll obligations for the company there, whether they will touch customer data from that country, and whether they can be reached when something breaks. For short trips, usually a few weeks, the risk is often small. For anything longer, or for someone who signs contracts or makes key decisions, ask an adviser before you agree. Write the answer down as a short policy, so the next request takes ten minutes instead of a week.
This is a common question at small remote companies, and founders usually answer it on instinct. A friendly yes can create a tax problem in another country. A reflex no can lose you a good engineer. Neither is necessary.
This is not tax or legal advice. The rules depend on the countries involved, any tax treaty between them, and the person's role. Use this as a checklist to bring to your accountant.
What actually creates risk
Tax presence for the company
The biggest concern is "permanent establishment." In simple terms, some countries treat a business as having a taxable presence there if it has a fixed place of business or someone who acts for it in that country. An employee's home office can count in some circumstances, especially if they stay long enough, work there regularly, or have authority to sign contracts on the company's behalf.
A senior engineer writing code from a rented apartment for a month is a very different case from a co-founder spending six months abroad negotiating customer deals. The role matters as much as the time.
Payroll and social security
Even without a company tax presence, the employee may owe income tax in the host country after a certain number of days, and some countries expect the employer to register for payroll or social contributions. Day-count thresholds and treaty rules vary by country, so check before you agree, not after.
Immigration
A tourist visa usually does not allow remote work for a foreign employer, although a growing number of countries offer digital nomad visas that do. The engineer is responsible for their own immigration status, but you should not knowingly support a stay that breaks local rules.
Data and security
If your engineer will access customer data from another country, check your customer contracts and privacy commitments. Some enterprise contracts restrict where data can be accessed from. Your privacy policy may also say something about it. Travel also raises the usual security issues: public Wi-Fi, lost laptops and shared devices.
Some countries also have export controls or sanctions issues. If the destination is on a sanctions list, the answer is usually no.
A simple policy for a small company
You do not need a long policy. One page is enough. Here is a version that works for teams of five to thirty people.
Short stays
Allow work from abroad for up to a set number of working days per year, for example 20 to 30, in countries that are not sanctioned. The engineer tells you the dates and location in advance. This covers most holiday-plus-work requests and is the range many companies consider low risk, but confirm the number with your accountant.
Longer stays
Anything longer than the short-stay limit needs approval in writing and a check with your accountant or an employer of record. If the person wants to move permanently, treat it as a relocation, not a long trip. Our post on employers of record for your first international engineer covers the options when someone actually moves.
Roles that need extra care
Founders, executives and anyone who negotiates or signs contracts get a stricter check, because their activity is more likely to create a company tax presence. Engineers who write code and do not sign deals are usually lower risk, but the time limit still applies.
Security rules
A company-managed laptop with disk encryption, a VPN or zero-trust access for production, multi-factor authentication on every system, and no customer data on personal devices. These should already be your rules at home; the trip is just a reminder to check them.
Availability
Agree core overlap hours with the team and on-call cover. A nine-hour time difference during a launch week is a real cost. If the engineer is on call, decide whether they stay in the rotation or swap out.
How to handle the conversation
Most engineers asking this are not trying to move abroad by stealth. They want a few weeks near family, or to stretch a holiday. Start from yes, then go through the checklist together. Explaining the reason for limits makes them easier to accept.
If you are worried about losing the engineer to a move, ask directly. A planned move can often be arranged through an employer of record. A secret move discovered later is far harder to fix, especially if it shows up in diligence as an unregistered employee in another country. Remote work policy is also part of the wider question of whether your first engineer should be remote or onsite.
Frequently asked questions
Is two weeks abroad a problem?
For a typical engineer who does not sign contracts, a short trip is usually low risk. Check the specific countries if you are unsure, and avoid sanctioned destinations.
Who pays if there is a tax bill?
That depends on who owes it. Company obligations are the company's; personal income tax is generally the employee's. Clarify this in your policy before anyone travels.
Can we just not ask where people work?
You can, but you are still responsible for what happens. A clear policy protects both sides.
Does this matter for contractors?
The issues are different but not zero. Contractors abroad raise classification and IP questions; see contractor or employee for your first engineer.
Can a fractional CTO help?
A fractional CTO can write the security and on-call side of the policy and work with your accountant on the rest. If you want help, see pricing or book a call.