Want to work in another country? What you need to consider

In 2013, Heidi Schmidt moved to London to spend nine months opening an office for her employer. Seven years later — with several visa extensions and six office openings in Paris, Madrid, Milan, Stockholm and Berlin — she returned to the Upper East Side, where she’s now vice president of client services at advertising-technology agency Hybrid Theory in Noho.

“I felt like I had an international MBA in experience in all those different countries, [being] exposed to how each market does business,” said Schmidt.

Flexibility was key when cultural or language barriers emerged. In Madrid, she leaned into high school Spanish. “My brain would hurt at the end of the day,” she said. “We’d meet halfway — Spanglish.”

Wanderlust New Yorkers now have many choices beyond traditional work to move across borders. Options include relocating with a company, working remotely, taking a gap year, a sabbatical, studying abroad, the Peace Corps and more, with a choice of countries across the globe. According to InterNations’ Expat Insider 2021 working abroad index, Taiwan ranked first for job security, followed by New Zealand for work-life balance and the Czech Republic for working hours.

After graduating from the School of American Ballet in 2021, Nolita’s Clara Cantor, 19, pursued a gap year planned through the Center for Interim Programs, a gap year counseling company helping people of all ages. Her itinerary included structured external programs of three months in Peru, Ecuador, the Galapagos Islands, as well as Cape Town and Johannesburg, South Africa, among others.

“The purpose was to throw myself into the wild. I was so goal-driven with grades and ballet . . . a self-imposed pressure cooker,” said Cantor, who’s heading to Brown University this fall. “I learned way more about myself and the world we live in from not having tasks to do.”

International adventures like these can be metamorphic, but they need proper planning.

Chad Ellsworth, a partner at global immigration services firm Fragomen, Del Rey, Bernsen & Loewy, with offices in Midtown, says work authorization is imperative. “They’re a contingency plan — a right-to-travel document that’s increasingly critical,” he said. “If you’re not compliant, it opens scrutiny for the company and everyone else at the company. Anything over 90 days would typically require a formal work permit.”
And if you’re looking to work remotely, take a breath before hopping on the next flight to Costa Rica.

“Speak to your manager, speak to HR. Do it in a compliant fashion so that you protect your employer, but most importantly yourself, from any tax, employment, labor issues that could arise,” said Ellsworth.

Work permits, including for internships, are usually issued on a temporary basis for six months up to three years; it can take three to four months to secure them from the host country.

For independent contractors, scoring work authorization is also country-specific. The Bahamas, Barbados, Bermuda, Croatia, Cyprus, Malta, Greece and Estonia top the popularity list using methods such as Portugal’s D7 residence visa and the Dutch American Friendship Treaty. Each allows entrepreneurs to live and work in the country, although investment money is required, with costs ranging from $3,000 to $5,000.

“They are supposed to be something you can apply for quickly — it hasn’t played out that way. It can take two to three months,” said Ellsworth.

“For anyone doing a nomadic visa, the best-practice recommendation is to have both an immigration and a tax consultation,” said Ellsworth.

That’s because wherever you go, Uncle Sam wants a cut. David Livitt, tax principal and US global mobility services tax leader at global audit, accounting and consulting group Mazars, said: “US citizens and green-card holders are taxed on worldwide income. If tax treaties exist between the US and the host country, then typically, the treaty has tax rules that prevent you from double taxation. Depending on the treaty and income source, one or the other will give you a tax credit.”

For instance, the top tax rate in the UK is 45% while here it’s 37%. Income is taxed in both locations; the top rate always applies. The individual gets credit for the 37 percent. The differential of 8% (grossed-up for tax purposes) may be absorbed by the company to meet the additional tax burden “to ensure that the individual is no better or worse off, as if they had remained working in the United States,” said Livitt.

When an agreement doesn’t exist, like Singapore, by establishing residence there, you become subject to both US and Singapore taxes.

There’s also a gray area with full-time remote workers.

“Some companies say, ‘You can work anywhere,’ ” Livitt said. “When you actually get into the detail, they backtrack.”

Livitt recommends employers follow a checklist for determining the risk/reward of employees working in another country: immigration, payroll, tax, social security, policy, expenses, health, insurance and data.

Freelancers should seek tax advice both here and abroad as there may be implications for both themselves and any organizations they work for, and similar to visas, getting caught for noncompliance is no joke, and may lead to deportation and being permanently barred from the country.

“Typically, it’s a fine-based process,” said Livitt. “You clear up the paperwork, pay your money.”

Net net: Usually there won’t be issues around jet-setting for a few weeks, but “if you’re looking to spend three months, six months, a year, then 100%, there’s going to be some [tax] issues,” said Livitt. “Every government wants to know what’s going on. They want their revenue.”