Cross-Border Catch-Up: Remote Work Updates from New Zealand and the United Arab Emirates

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Goli Rahimi: Welcome to the Cross-Border Catch-Up, the podcast for global employers who want to stay in the know about cutting-edge employment issues worldwide. My name is Goli Rahimi, and I am here with my colleague Kate Thompson. We are cross-border attorneys here at Ogletree Deakins. Today, we’re going to discuss a topic that’s been getting a lot of attention again this year, remote work. So, Kate, tell us a little bit about how the remote work landscape is looking these days.

Kate Thompson: Thanks, Goli. So, there have been several key updates this year. Let’s start with a quick update in the United States. As we all know, President Trump recently issued an executive order, which is going to end remote work for all federal employees. This means that all federal employees are expected to be back at work five days a week unless they have an exemption.

Goli Rahimi: I see. So, as a result of this recent executive order, do you think that there will be any changes to remote work in the private sector and not just for federal employees?

Kate Thompson: Definitely. In fact, I can almost guarantee it in the United States. There was a recent article from Forbes that indicated that about 70% of employers are actually cracking down on remote work. So, we’ve seen a ton of return-to-work mandates in the financial sector, and I’m sure more are going to follow.

Goli Rahimi: I think it’s interesting because remote work was such a key part of our lives during the pandemic, but it seems like the COVID era of remote work is slowly disappearing in the U.S. But what about the rest of the world?

Kate Thompson: So, interestingly enough, there have actually been several new laws enacted this year that encourage remote work outside of the United States. So, for example, countries like New Zealand are actually relaxing their visa requirements so that digital nomads can work directly from the country.

Goli Rahimi: Why do you think that New Zealand has relaxed its requirements? What does this mean?

Kate Thompson: Great question. I think that the change to the visa requirements is really to enable people visiting the country, so think tourists or folks visiting their family or friends for extended periods of time, to have the ability to work remotely for their overseas employer or client without worrying about breaching any visa requirements.
So, the New Zealand Immigration Office actually put out some definitions for what constitutes remote work. So, remote work could be anything from answering emails or jumping on a phone call, coding work, writing a report, attending a meeting, or giving a presentation to colleagues that are outside of New Zealand, or even being a social media influencer. It’s important to note that the old visa requirements were much more strict. So, for example, if you were to fly to New Zealand in the early 2000s, and let’s say you respond to a work email or maybe you pick up a work call from a colleague, you actually would’ve been in violation of the old Immigration Act. Now, the new visa requirements are much more relaxed, and they allow for foreigners to remain in the country, so in New Zealand for up to nine months, and work for their overseas employer or client during this time. These changes went into effect on January 27th for all visitors. So, I say we get on a plane right now, and see what it’s all about.

Goli Rahimi: Oh, I like that idea. I think that’s a fantastic, fantastic thought. But you’re right, that’s actually quite a big change from the prior requirements. Is there anything else that you think we should know about the New Zealand visa?

Kate Thompson: Yeah, there are a few other things that I’ll point out. So, according to the New Zealand Immigration Office, if a visitor is looking to hold a digital nomad visa, there are a couple things that they absolutely must not do. So that includes work for a New Zealand employer, they cannot provide goods or services to people or businesses in New Zealand, and they cannot do work that requires them to be physically present at a workplace in New Zealand. All that to say that if you want to work for or with a New Zealand-based employer, then you have to apply for a visa that allows you to work in New Zealand.

Goli Rahimi: Now, I don’t want to take away from the fun discussion, but I’m thinking of something a little bit more complicated and maybe a little drier. But what about taxes? So, how do taxes work for digital nomads who work from New Zealand?

Kate Thompson: Unfortunately, not a fun topic, but definitely one that we have to cover. So, it’s really going to depend on the individual circumstances, and each company’s tax advisor will really be best placed to dig into the specific tax consequences of remote work. But for our purposes today, I’m going to point out three different buckets.
So, the first is if the individual’s income is taxed elsewhere. So, New Zealand will exempt it from tax if the person does not spend more than 92 days in New Zealand in a twelve-month period, and note that these days don’t need to be consecutive. The second bucket is if the person is a tax resident in one of the forty-plus countries with which New Zealand actually has a tax treaty. So, those would be places like Australia, most of Europe, the United Kingdom, the United States, and also parts of Asia, and this can be extended up to 183 days. The third bucket is if the person is present in New Zealand for longer than the relevant limit for exemption. So, this basically means that New Zealand is going to tax their income from providing services and it’s going to apply from the first day of their New Zealand presence, and then it’s going to be imposed at the same rates that actually apply to other New Zealand residents.

Goli Rahimi: That’s really helpful update, Kate. Thank you. So, we’re bopping around New Zealand. I’d like to maybe think about where our next trip will be. Any other countries that have new and noteworthy laws about remote work that we should cover today?

Kate Thompson: Yes, definitely, and I’m always up for another trip to another location. So, our next update comes from the United Arab Emirates. So, recently the Abu Dhabi Global Market, also known as ADGM, they issued new employment regulations, which are set to go into effect on April 1st. And these regulations, they cover a lot of different things. Honestly, we can do a whole podcast on them, but in part, they address remote work.

Goli Rahimi: So, what are some high-level points that employers should be aware of when it comes to remote work in ADGM?

Kate Thompson: Sure. So, first things first, the new law added a new category of worker to the employment regulations. So, now remote workers, they’re defined as those working outside of ADGM premises, either within or outside of the United Arab Emirates. So, this means that remote employees outside of the UAE, they don’t require a UAE residence visa or ADGM work permits. So, essentially, remote workers are going to be able to work for ADGM-registered companies from anywhere in the world. Additionally, the new regulation says that employers are going to be required to supply the necessary tools or tech so that their remote workers can perform their jobs effectively. So, let’s think laptops, monitors, you name it, whatever equipment the employee will need. The next part of the regulation says that employers are required to do is pay for the costs associated with their remote employees securing work permits or residency visas and ID cards.
And then last, employers are also required to implement cyber security measures just so they can ensure that their sensitive information is protected, especially with remote employees and the fact that they could be handling sensitive information. The new regulation just wants to make sure that the information will absolutely be protected. And then, last but not least, the new employment law also includes provisions to ensure that remote workers are treated fairly and they also have access to the same rights and protections as on-site employees. And the regulation also includes new information about working hours, compensation, and other employment benefits. That would be too lengthy to get into today, but just other things to flag that are going on in ADGM.

Goli Rahimi: Besides the fact that you can work in the UAE, what do you think the benefits are for this new visa in the ADGM?

Kate Thompson: Yeah, great question. So, there are a few that quickly come to mind. So, the new addition of remote work, it has benefits like improving work-life balance or retaining talent. I also think that it helps to reduce turnover costs or just expenses that are related to in-person work, like office spaces and rent or even commuting costs. So, with all of these recent changes, employers in ADGM, they may want to consider updating their policies and documents just to make sure that they’re in line with the new rules. But again, those don’t go into effect until April 1st, so there’s plenty of time to review and update those policies before that deadline.

Goli Rahimi: That’s wonderful, Kate. Thank you so much for walking us through these updates in New Zealand and UAE. This is by far not an exhaustive list of all the countries that have remote work regulations and these new additional nomad visas that are popping up everywhere, but I think it’s really great that we were able to dive into this. That’s all the time we have for today, Kate and I would love to thank you for joining us for this episode of the Cross-Border Catch-Up. Please do follow us to stay in the know about cutting-edge employment issues worldwide.

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