There are many employers who allow workations within the European Union (EU) as they often entail less risks than flying to a third state. However, there are territories for which it’s unclear whether the same rules than in continental Europe apply. We’ll dive deeper into the distinction of workations and business travel-related compliance risks in outermost and overseas territories such as Azores (PT), Aruba (NL) or French Polynesia (FR).
There are over twenty territories located around the globe in the Atlantic, Antarctic, Arctic, Caribbean, Indian, and Pacific regions whose status is often a matter of concern for the employer allowing their employees to work from “anywhere in Europe”. Due to historical and geographic reasons, assessing if a territory is part of the EU or not and which rules apply in such territory may be more complex than expected.
Luckily, the European Commission sheds some light by making the following categorization within the territories located outside of its continental borders:
Territories that are integral parts of the EU and its single market. These nine outermost regions, even though located far from continental Europe, are considered an extension of their respective member states and benefit from the rights and obligations that come with EU membership. Hence, EU law applies fully and uniformly, just like in any other region within the EU. The archipelagos of the Azores (PT) and Canary Islands(ES) are examples of this. More info can be found here.
Overseas countries and territories (OCTs)
Territories that have a special relationship with an EU member state (namely Denmark, France, and the Netherlands) but are not part of the EU as such. Unlike the outermost regions, OCTs do not have full EU membership, and EU law does not automatically apply to them. However, OCTs maintain a relationship with the EU through various agreements and arrangements established between the EU and the respective member states. They are all islands such as Greenland (DK), Aruba (NL), or French Polynesia (FR). You can find more information on the EU overseas territories here.
This categorization means that territories can be covered (or not) by double tax agreements and social security treaties. For instance, Aruba (NL) as an overseas territory would not be covered by most of the treaties signed by the Netherlands, while Azores (PT) would actually be considered as Portugal for any legal matter and all the potential risks that a workation or business trip could trigger would be the same in continental Portugal than in the islands.
In a nutshell, not all the territories outside of continental Europe are the same concerning tax, social security, labour law, social security, and VISA matters. As a general rule, outermost regions do not generally entail the same challenges as overseas territories. However, a case-by-case assessment is always required, and it’s important that the potential risks are managed. This is why WorkFlex performs an individual risk assessment of each workation request and generates relevant documentation such as employer statements, PWD registrations, and employee instructions among others. This way, both the employee and the employer can comfortably enjoy a workation slightly further from continental Europe.