Brexit | 'Doing business' abroad and breaking the law

'Doing business' abroad and breaking the law

By Mike Fitzsimmons, Senior HR Consultant, Moorepay

You’re relaxing in a faraway bar on a sun-kissed beach, smart phone in one hand, pina colada in the other. Your beeping laptop means the battery is low, but you must finish this report.

You know you shouldn’t be working; you should be relaxing. But have you even considered that you may be breaking that country’s employment laws?

Britain left the EU at the end of the transition period on 31 December 2020. Freedom of movement – the cornerstone right to move, reside and work anywhere in Europe – ended the same day. But just what does this mean? Have you considered the differences between ‘visiting’, ‘doing business’ and ‘working’?

Visas and work permits

Previously, you didn’t really need to think twice about sending someone to a job in France or your Amsterdam office for a few weeks. No problem emailing clients from that Greek beach. Now things are different. You may need a work permit or visa where previously there was freedom of movement. Yes, even business emails are classed as working in certain countries.

Post Brexit, most people who travel to Europe still do not need a visa. This is providing they’re classed as a tourist. They can stay for up to 90 days in any 180-day period in total not per country. Normally, time spent in all European countries visited counts towards those 90 days.

Business travel

Travel on business is not necessarily covered by tourism visa exemptions. It now depends on each individual country. This can affect business services you intend to provide. Travel for meetings and conferences may be permitted, installing or maintaining machinery may not. You must check the entry requirements and rules of each country. There’s helpful guidance on all of this here.

Employee transfers to Europe

Perhaps you’re thinking of transferring someone to one of your branches in Europe? Just as in the UK, they potentially need the right to work there. Short term, they may only need a permit, longer term a visa. The one notable exception is the Republic of Ireland which has had reciprocal provisions (including residency, work, study, and health care) with the UK for many years. Again, guidance is available on gov.uk.

What about business visitors coming to the UK?

You can welcome genuine visitors who attend meetings, exhibitions and trade fairs, sign contracts, undertake inspections etc. But they mustn’t take up employment, undertake work or work placements, sell or provide goods or services. And while someone from your Brussels or Frankfurt office may be able to advise, trouble-shoot or train in the UK, they can’t normally be paid by a UK organisation (other than things like legitimate travel expenses).

Of course, there are still routes for people to come to the UK to work. These include ‘hard to fill’ positions such as health workers, intra-company secondments and transfers and even seasonal farm workers. Work visas normally require a prospective employer to ‘sponsor’ the candidate. Government guidance changes reasonably frequently. Current guidance is here.

Implications employing offshore talent

Technology means it’s now feasible for some roles to be undertaken anywhere in the world. Brexit and the impact of Covid-19 have led organisations to consider creative ways to get work done. If you can work on holiday, why not use someone in another country to work for you all year round? Technically, it’s entirely possible.

But what about legally? Well, it’s a minefield. Tax, social security and employment law are high up a long list of considerations. Also prominent are issues like insurance, security and data protection. This has seen the growth of ‘employers of record’. For a fee, an employer of record will act on your behalf to ensure someone you want to undertake work in a particular country is legally employed, paid, taxed and socially insured there. The service does not come cheap but may be offset by lower remuneration costs.

Before agreeing to employ (or continuing to employ) anyone who moves back to their own country because of Brexit, Covid etc. be aware of the impact of local laws. If your organisation currently has no presence in that country, allowing someone to work there remotely can create one. This may mean you inadvertently create a ‘permanent establishment’ and become liable for business registration and taxes. Similarly, a UK citizen working for you remotely in another country may infringe immigration and other statutory provisions.

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