International Employer of Record & Digital Nomad Services Made Simple

Digital Nomad Visa (DNV): This is a specific visa or permit issued by a country that grants an individual the legal right to reside there temporarily while working remotely for an employer outside that country. The individual remains employed by their foreign company. International Employer of Record (EoR): This is a service arrangement where a third-party company (the EoR), which has a legal entity in the host country, hires employees on behalf of another company (the client company, often foreign). The EoR becomes the legal employer in the host country, ensuring compliance with local labor laws and tax regulations, even though the employee takes day-to-day direction from the client company.

With an EOR, the individual must have the legal right to work in the host country under local employment law.

EoR: The EoR, as the legal local employer, ensures this requirement is met, often by managing or sponsoring the necessary work permits or visas if the individual doesn't already possess the right to work (e.g., through citizenship).

DNV: The Digital Nomad Visa itself serves as the specific legal authorization required for this type of temporary residence and remote work for a foreign entity. It generally replaces the need for a traditional work permit tied to a local employer.

DNV: The individual remains directly employed by their original company, which is typically located outside the host country (e.g., a U.S.-based employer). There is no local employment relationship established by the visa itself.

EoR: The EoR becomes the individual's official, legal employer in the host country. They handle payroll, tax withholding, benefits administration, and ensure compliance with local labor laws. However, the individual's daily tasks, performance management, and role functions are usually directed by the original client company.

DNV: This is highly variable and complex.
Some countries' DNV programs offer specific tax benefits, such as initial exemptions or flat tax rates, for a limited period.

However, in many cases, staying in a country beyond a certain threshold (often 183 days in a year) can trigger tax residency. This means the DNV holder may become liable for income tax in the host country on income earned while there, or potentially on their worldwide income, subject to the country's specific laws.

Tax Treaties between the host country and the individual's home country play a crucial role in preventing double taxation but usually don't eliminate the need to file taxes in one or both countries.

Crucially: Do not assume you only pay taxes in your home country. Always research the specific tax laws of the DNV country and relevant tax treaties.

U.S. citizens and green card holders must always file U.S. taxes on their worldwide income, regardless of where they live or whether they pay taxes abroad (though foreign tax credits or exclusions like the Foreign Earned Income Exclusion may reduce U.S. tax liability).

EoR: The employee is treated like any other local employee of the EoR. They are subject to the host country's income tax, social security contributions, and other mandatory payroll deductions, which are managed and paid by the EoR.

DNV: Best suited for individuals who want to live and work remotely in a foreign country for a temporary period (often 1-3 years, sometimes renewable), while remaining employed by their company back home or working for foreign clients.

EoR: Ideal for companies that want to hire employees compliantly in a foreign country where they do not have their own legal entity. It's used for both short-term and long-term assignments/employment, ensuring full adherence to local labor laws, tax regulations, and statutory benefit requirements.