Some banks have made arrangements for remote working from abroad, but the rules for «digital nomads» are not the same everywhere.

Technological progress and the COVID 19 pandemic brought on a rapid change in the world of work. Airbnb, where one in five guests say they are working while on the road, reflects this.

The rise of the so-called «digital nomads» is even prompting some governments to include remote working in their immigration processes and to issue visas for digital nomads.

Visa Programs

Since Estonia introduced the world's first program for remote working in 2019, at least 25 other countries and territories launched their own visa programs for digital nomads, according to a 2022 study by the Migration Policy Institute.

These programs mostly allow visa holders to stay in the country for a limited period of time and to benefit from tax advantages. According to the study, countries with good living conditions for long-term travelers include Costa Rica, Croatia, Montenegro and Colombia.

Recently, expat hotspot Dubai, also introduced a virtual working program, which requires workers to prove they are employed and earn a minimum salary of $3,500 per month for a one-year stay.

Switzerland’s Inconsistencies

The desire to work across borders has also arrived in the human resources departments of local banks and insurance companies which are now having to figure out how much and how far employees can set up their remote offices. 

This affects decisions around allowing people to work abroad during short-term stays as well as permanently from their foreign holiday homes. When working remotely from another country, banks have to be aware of various pitfalls, Balz Stueckelberger from the Association of Employers of Banks told finews.com. The problems arise mainly in the areas of data protection, social insurance and immigration law, where a work permit may even be required, he said. 

Depending on the country, the activity and the duration of stay, the rules for working abroad also vary greatly which is why Swiss banks have not yet developed a universal practice.

German Attempts

In this regard, German institutions seem to be further ahead. At Bayerische Landesbank, remote work has been possible in selected states of the European Union since August 2022. Up to 20 days are available per year, with a maximum of 10 days to be taken at a time; its subsidiary DKB allows up to 30 days per year.

At DZ Bank, employees can work up to 18 days per year from outside the EU in exceptional cases, provided the manager agrees. The restriction at DZ Bank to 18 days is justified by tax regulations.

EU Advantage

Banks and other companies from the EU have the advantage that workers don’t require a separate residence permit or work permit when in the EU area.

Swiss banks that want to offer their employees a working stay abroad, already find themselves challenged by allowing cross-border commuters working in Switzerland, to reside in the EU neighboring countries. Here the rules differ again.

An employee who works less than 25 percent in his home office abroad is not subject to the social security system and tax regime of his country of residence. Due to the lockdowns in the Corona pandemic, this restriction was temporarily increased. In the meantime, it has been permanently raised to a new limit of 40 percent between Switzerland and France.

If the workload at the French home office remains below this new upper limit, employees will be taxed in the country in which the employer has its business from 2023. Because France, a high-tax country, is worse off with this new regulation, Switzerland will have to make a compensation payment that has yet to be determined.

Skepticism

It is true that flexible working models increasingly determine everyday working life. But personnel consultants are still very skeptical about the extent to which working from abroad will become an option.