Since the onset of COVID-19, we have all encountered the topic of remote work sooner or later. Nevertheless, there are still often uncertainties about how this is legally structured. From employment contracts to other legal considerations, navigating the legal aspects of remote work can be daunting. It's essential for both employers and employees to understand their rights, responsibilities, and any potential risks involved in remote work arrangements.
Disclaimer: This article only covers the basics, which may vary depending on the company or country. Therefore, we attempt to differentiate between the various types where we believe it makes sense; however, please seek advice from an expert (tax advisor or lawyer) before proceeding to avoid any mishaps.
A lot of people mistakenly believe that it is not a problem to secure a standard employment contract while residing in a country different from where the company is located. This is why we want to discuss the different options you have if you consider remote work.
First and foremost: Hiring employees via standard employment contracts across borders, whether within or outside Europe, is not permitted. So, for example, if you live in Sweden and want to work for a German company, they cannot simply offer you a standard employment contract if you do not plan to relocate. So what are your options?
As mentioned, you are willing to move to the country where the company is located. As long as you reside in the same country and the company offers remote work, this is a possible solution.
This is probably the easiest and most straightforward option for you if you're working remotely and don't want to deal with self-employment issues. Here's how it works: Your prospective employer reaches out to an Employer of Record (EOR) with a location in your country.Through them, you'll get a regular job contract. This means you'll be covered by the laws of the country you live in, like getting vacation time, sick pay, etc.
Whether you're a contractor or freelancer, in both cases, you're considered self-employed. The best way to find out about the options available in your country is through a tax advisor. They can also explain how to properly issue invoices both domestically and internationally.
So what exactly is the difference between these two? The distinction lies less in the legal framework than in the way of working. A contractor is probably most similar to a remote position, as you are working for a single employer for an extended project period.
A freelancer works more on a project basis and usually has multiple clients simultaneously. As a result, a freelancer enjoys greater flexibility in managing their time, but they lack a steady income due to the uncertainty of when the next project will arise.
If you're aiming to work for larger game companies, it's likely that you'll only be able to do so as a contractor. Typically, contracts include clauses preventing you from working for competitors or on other gaming projects during this period. On the upside, you'll enjoy a stable income for an extended duration.
When working with indie developers, you're likely to find greater flexibility in your work hours and more influence over the final outcome due to the smaller team size. This is something that many game developers consider very important.
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