Workation: Work from Anywhere in the World — A Privilege or a Hidden Risk for Businesses?

The Workation — remote work from anywhere in the world — is becoming an increasingly favored practice, especially among professionals whose work is already digital or location-independent.

According to a study by international tourism agency TUI,

  • Over 70% of employees would like to take advantage of workation opportunities if supported by their employer

  • 80% of employers acknowledge that flexible work improves employee loyalty and satisfaction

Although this setup can foster creativity, prevent burnout, and boost employee engagement, businesses must proceed with caution.

Long-term remote work abroad may cause:

  • Risks of double taxation

  • Obligations to register with local authorities

  • Breaches in data protection and IT security

Therefore, before launching workation programmes, companies should research thoroughly and establish clear implementation and oversight strategies to avoid unnecessary complications when granting remote work privileges.
 

Global Trends Enabling Workation

The World Economic Forum highlights two major forces transforming the modern workplace:

  • The impact of generative artificial intelligence on productivity

  • The rise of digital workplaces

These trends support the growing feasibility of remote work — and with it, workation opportunities.

Many countries and cities are tapping into this potential. For example:

  • Norway has integrated workation into its tourism strategy. On the tourism site Visit Norway, the country is promoted as ideal for remote work, with the campaign slogan:

    “Remote work is a global trend”

  • Portugal, Spain, and Thailand now offer special visas for digital nomads, actively supporting mobile work.

 

Latvia and the Rise of Local Workation Initiatives

Latvia has seen a rapid increase in interest in workation — from both foreign professionals and domestic companies.

  • Since 2022, the Riga Investment and Tourism Agency has run the “Workation Riga” programme, inviting foreign companies to explore collaboration and investment in Riga.

  • Latvia Travel promotes the country’s remote work strengths, such as:

    • Fast internet

    • Well-equipped coworking spaces

    • Accessible infrastructure

    • Cultural richness

Meanwhile, more local businesses are evaluating whether to allow employees to work from abroad, either individually or in teams, to promote flexibility and employee wellbeing.
 

Why Workation Needs Structure and Strategy

To ensure the benefits of workation don’t become liabilities, companies need a clear and structured approach.

“For the implemented workation programme to be safe and meaningful, it needs to be structured and carefully planned in a professional manner — like any other business process,”
says Artūrs Radziviļčuks, Head of BDO Latvia’s Tax Advisory Department.

This means:

  • Defining a clear policy for implementation

  • Specifying authorized countries and work procedures

  • Ensuring compliance with tax, labor, and data protection laws

  • Enforcing IT security standards, including:

    • Use of VPNs

    • Multi-factor authentication

    • Restricted system access

Employees also need practical support before and during workation, such as:

  • Travel and health insurance

  • Help with documentation and legal formalities

Without this, companies may face serious issues such as:

  • Establishing permanent representation abroad, triggering corporate tax liabilities

  • Complicated income tax obligations for both employer and employee

  • Fines, penalties, or double taxation risks if local tax laws are breached

 

Legal and Tax Considerations for Employers

BDO Latvia experts recommend that companies include remote work abroad in their internal policy documents, clearly stating:

  • Who can participate and under what conditions

  • Which countries are allowed

  • How work will be managed (time zones, infrastructure)

  • What responsibilities lie with each party

Special attention is needed when:

  • Employees work in countries outside the EU or EEA

  • No double taxation agreements exist between that country and Latvia

  • Employees spend more than 183 days abroad per year, potentially gaining tax residency status in another country

This scenario complicates employer obligations, as they must determine:

  • Where income taxes must be paid

  • What documents must be submitted to tax authorities

 

Workation: A Competitive Advantage — If Done Right

Remote cross-border work can be a powerful tool to promote employee well-being and increase competitiveness — but only if implemented responsibly and systematically.

BDO Latvia urges businesses to:

  • Embrace the benefits of flexible work

  • Simultaneously create a legal and operational framework that supports safe, compliant, and valuable remote work — for both employees and employers

You can read the full article here