You work remotely for a US company and want to do it from another country. What matters is where you actually perform the work, not your employer's address. This article helps you ask the right questions: your employer's approval, the right to work on site, US taxes, social security contributions, and employee or contractor status. It does not replace the advice of your employer or of a tax or immigration professional.
Geographic Restrictions and the Role of Your Employer
Before you book a flight, ask your employer for written approval for the country and the length of stay you have in mind. This is not a formality. In the United States, for example, federal employees may not work remotely from abroad without approval from their agency and the State Department[1]. Private employers are not subject to this specific rule, but the example shows that your employer's green light is a prerequisite for any departure.
A common reason for restrictions: an employee who regularly works from a foreign country can create a taxable presence for the employer there, known as a permanent establishment. This triggers tax registration obligations for the US company in the host country[2]. A company may therefore limit the countries where its teams are allowed to work, and the decision is made case by case with them.
Right of Stay and Work Authorization in the Host Country
Remote work for an employer or clients based entirely abroad is generally neither explicitly authorized nor explicitly prohibited under short-stay rules (visa exemption, tourist visa). It is a gray area. In the three countries whose rules were reviewed (Cape Verde, Morocco, Madagascar), the logic is the same: any income-generating activity for a local entity or paid locally requires a separate work authorization[3][4][5].
This example is not a universal rule: each country sets its own conditions. Before you leave, check with the authorities of the host country (consulate or immigration department) what your entry status allows. If the country offers a digital nomad or remote work visa, that visa, with its own conditions, is what governs your situation.
US Taxes: The Exclusion for Income Earned Abroad
Employment income is sourced to the place where you perform the work. Where and how you are paid has no effect on the source of the income. The US tax authority (IRS) gives this example: income earned for work performed in France remains foreign-source income, even if it is deposited into a US bank account by an employer based in New York[6].
If you are a US citizen or a resident alien in the United States, you may be able to exclude part of this income from your US taxable income, depending on the test you meet (the bona fide residence test applies to US citizens). The ceiling is $130,000 for tax year 2025 and $132,900 for 2026[7].
To qualify, you must meet at least one of these tests: be a bona fide resident of a foreign country for an uninterrupted period covering an entire tax year, or have been physically present abroad for at least 330 full days in any consecutive 12-month period[8].
The exclusion is not automatic: it applies only if you meet all the conditions and report the income on your US return[7]. Another limit: it reduces ordinary income tax, but not self-employment tax[8].
Social Security Contributions (FICA) and Consequences for the Employer
A US employer generally must continue to withhold Social Security (6.2%) and Medicare (1.45%) contributions on the wages of a US citizen working abroad, unless a totalization agreement between the United States and the host country provides an exemption[2]. These agreements aim to avoid double coverage. An up-to-date list can be found on ssa.gov, the website of the US Social Security Administration.
State taxes from the US state where you were domiciled may also remain due as long as you have not broken that domicile[2]. Discuss this with your employer and with a tax advisor before you leave, because the answer depends on your personal situation.
Employee or Contractor: How Your Status Changes Things
An independent contractor can also benefit from the exclusion of income earned abroad, but still owes self-employment tax[8]. Freelancers and consultants may therefore owe Social Security and Medicare taxes, unless a totalization agreement changes the result[9].
Your status also affects protection against discrimination. A U.S. citizen employed outside the United States by a U.S. employer, or by a foreign company controlled by a U.S. employer, remains protected by U.S. anti-discrimination laws (Title VII, ADEA, ADA). Conversely, people who are not U.S. citizens are not covered by these laws when they are employed outside the United States or its territories[10].
Pitfalls and Things to Watch For
- Working without authorization on a short-stay status: remote work often falls into a gray area, and in the countries reviewed (for example Morocco), any paid activity performed locally requires a separate work authorization[4].
- Spending too little time abroad: a U.S. citizen who spends fewer than 330 full days within any 12-month period outside the United States cannot rely on the physical presence test for the exclusion; they must therefore meet the bona fide residence test to qualify[2].
- Believing the exclusion eliminates all obligations: the income must still be reported[7], FICA contributions may continue to be withheld[2], and state income tax may still be owed[2].
- Unknowingly creating a permanent establishment for your employer in the host country, which may explain why some employers refuse certain destinations[2].
- Being paid too late: amounts received after the end of the year following the year in which you performed the work do not count as foreign earned income and cannot be excluded[8].
Checklist Before You Leave
- Ask your employer for written approval for the planned country and duration.
- Check with the host country's authorities what your entry status allows and whether a digital nomad visa exists.
- Verify on ssa.gov whether the host country is covered by a totalization agreement with the United States.
- Count your days of presence abroad if you are aiming for the 330-day exclusion.
- Have a professional calculate your situation (federal income tax, state income tax, contributions) before signing a lease or buying a ticket.
Sources
- 1.^opm.gov — Overseas Telework - OPM.gov: “Federal employees may not telework from another location overseas without official approval from their agency and the Department of State.” https://www.opm.gov/telework/tmo-and-coordinators/overseas-telework/ (accessed October 21, 2026)
- 2.^ abcdefgtaxesforexpats.com — Working abroad for a US company: Tax guide 2025–2026: “An employee of a U.S. company who regularly works from a foreign country may create a permanent establishment in that country, a taxable presence of the company that triggers tax registration obligations for the U.S. employer in the host jurisdiction.”; “A U.S. employer must continue to withhold FICA contributions abroad (Social Security 6.2% and Medicare 1.45%) on a U.S. citizen employee working overseas, unless a totalization agreement between the United States and the host country provides an exemption.”; “State income tax also remains due if you have not severed your domicile.” https://www.taxesforexpats.com/articles/expat-tax-rules/working-abroad-for-us-company.html (accessed October 21, 2026)
- 3.^Mira Knowledge — Remote work for an employer or clients based exclusively abroad is neither explicitly authorized nor prohibited by short-stay statuses in Cape Verde: it is a gray area, but any paid activity for a Cape Verdean entity or local remuneration requires an appropriate work or residence authorization, with a risk of refusal. Verified on 06/08/2026: official source portalconsular.mnec.gov.cv. https://portalconsular.mnec.gov.cv/fr/vistos (accessed June 8, 2026)
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- 4.^ abMira Knowledge — In Morocco, remote work for an employer or clients based exclusively abroad is not explicitly authorized by short-stay statuses and constitutes a gray area; any paid activity for a Moroccan entity or local remuneration requires a separate work authorization. Verified on 06/08/2026: official source diplomatie.ma. (accessed June 8, 2026)
- 5.^Mira Knowledge — In Madagascar, remote work for an employer or clients based exclusively abroad is neither explicitly authorized nor prohibited by short-stay status rules; any income-generating activity for a Malagasy entity or any local pay requires an appropriate work permit and residence permit. Verified on 06/09/2026 — official source: diplomatie.gov.mg. (accessed June 9, 2026)
- 6.^irs.gov — Foreign earned income exclusion - what is foreign earned income | Internal Revenue Service: “Where you are paid, or how you are paid, has no effect on the source of income.”; “For example, income earned for work performed in France is foreign-source income, even if it is deposited directly into your U.S. bank account and your employer is in New York.” https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-what-is-foreign-earned-income (accessed October 21, 2026)
- 7.^ abcirs.gov — Figuring the foreign earned income exclusion | Internal Revenue Service: “For tax year 2025, the maximum foreign earned income exclusion is the lesser of your foreign earned income or $130,000 per qualifying individual. For tax year 2026, the maximum exclusion is $132,900 per individual.”; “In practice, the exclusion applies only if you are a qualifying individual with foreign earned income, you meet all the requirements to claim it, and you file a return that reports this income.” https://www.irs.gov/individuals/international-taxpayers/figuring-the-foreign-earned-income-exclusion (accessed October 21, 2026)
- 8.^ abcdirs.gov — Foreign earned income exclusion | Internal Revenue Service: “A U.S. citizen or resident alien of the United States who is physically present in one or more foreign countries for at least 330 full days during any 12-month period.”; “A U.S. citizen who is a bona fide resident of one or more foreign countries for an uninterrupted period that includes an entire tax year.”; “The excluded amount will reduce your ordinary income tax, but not your self-employment tax.” https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion (accessed October 21, 2026)
- 9.^brighttax.com — How the Foreign Earned Income Exclusion Can Lower Your 2026 Taxes: “This means freelancers and consultants may still owe Social Security and Medicare contributions, unless a totalization agreement changes the outcome.” https://brighttax.com/blog/irs-foreign-earned-income-exclusion-us-expats-guide/ (accessed October 21, 2026)
- 10.^eeoc.gov — Employee Rights When Working for Multinational Employers | U.S. Equal Employment Opportunity Commission: “U.S. citizens employed outside the United States by an American employer, or by a foreign company controlled by an American employer, are protected by Title VII, the ADEA, and the ADA.”; “Persons who are not U.S. citizens are not protected by U.S. equal employment opportunity laws when they are employed outside the United States or its territories.” https://www.eeoc.gov/laws/guidance/employee-rights-when-working-multinational-employers (accessed October 21, 2026)
