How to be a legally compliant digital nomad with Sam Matthew

When it comes to digital nomadism, Sam Matthew has walked the walk. 

Today, he heads the legal team at OnDeck, a platform for entrepreneurs with a fully distributed workforce. Before that, he was general counsel for Remote Year, a company that facilitates travel for those working remotely. 

In this role, Sam witnessed many of the challenges of facilitating the employment of digital nomads firsthand: he himself worked across 20+ countries in a three year period, linking up with other Remote Year employees in Latin America, Europe, and Asia along the way.  

Here he shares with Job some of the key lessons he took from his travels, including the different approaches one can take toward tourist visas and work permits. He explains how countries across the world will have very different approaches to digital nomads, from some that are creating laws to encourage nomadism to others that legally oppose the practice.

The conversation also turns to the legal difficulties companies can run into when hiring abroad, from complying with health and safety regulations to discovering the difficulties of terminating a contract.

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Episode transcript

Job: Hi, I'm Job, and this is Off Mute, the podcast that explores managing distributed teams across the globe.

Here at Remote, we want to help you and your company get the most out of your teams no matter where they are or how many countries you offer. That's why we're speaking to senior leaders about remote working and the best practices that they've picked up along the way.

In episode two, we're talking to Sam Matthew. Sam is the head of legal at OnDeck, a digital community for entrepreneurs, and spent four years at Remote Year, a travel platform for those working across borders.

Sam spoke to us about his professional and personal journey in remote work, which includes a three-year spell working in over 20 countries. And he also spoke about his time at Remote Year and the challenges there and how it is managing a global workforce at OnDeck. So, sit back and enjoy the show.

Hello and welcome back to another episode of Off Mute from Remote. And for episode two, I'm welcoming another legal expert in the form of Sam Matthew.

Today, Sam is the Head of Legal at OnDeck, a digital community platform that helps entrepreneurs connect and accelerate their ideas.

Previously, he spent four years as general counsel for Remote Year who facilitate travel for those working remotely.

Sam has delivered talks on the legal implications of having a remote workforce and a question of tourist visas versus work permits.

Outside of law, he's been a ski instructor, a volunteer at the Peruvian Orphanage, and even played in the World Series of Poker.

How did you end up in digital nomad law?

Sam, thank you so much for joining us today.

Sam: It's my pleasure. Thanks for having me.

Job: I mean, I have to say that's very different things than law.

Sam:Yes, I have some varied interests and there have been some times where I wasn't sure if I wanted to keep practising law. So, I've had some ventures out and back in.

Job: Maybe to get started, why law in the first place? Why is that something that attracted you and why specifically in tech?

Sam: So, that's a great question and I have a pretty bad answer for why law. And so, if there's anyone thinking about going to law school out there listening, don't do what I did. Which is, I was finishing undergrad and all of my friends had jobs lined up and I had no idea what I wanted to do and I liked school. And so, I took the LSATs, which is the entrance exam for law school, and I did well enough where I said, “Okay, maybe I'll go to law school.”

And I have found that's not a great path to happiness as a lawyer. Most of the happy lawyers that I know went to law school already knowing exactly why they wanted to go to law school and what they were going to do rather than just they enjoyed school and they wanted to delay getting a job.

I ended up working at a big law firm in Chicago doing corporate litigation, so representing companies that were suing other companies or getting sued by other companies and I really didn't like it.

So, I did it for a couple years. It was a good experience in learning about the civil litigation system, but it was kind of soul training and I quit and that's when I went to Latin America. I volunteered; I backpacked for a while. I thought that I was maybe going to make another bad decision and go back to school and get another degree.

And I ended up back in Chicago after a couple months and I was working at an incubator for tech companies, in a non-legal position. I was just helping out because one of my friends was on the board.

And it was my first time working in and around startups and all of these founders would come up to me every day asking me legal questions. And I would say, “This is not my area of expertise. I'm just here to make sure the office is running for a couple months.”

But all the questions were really interesting. And so, I started kind of doing some research, trying to figure out how could I make myself more helpful to these participants in this accelerator.

And then around that time I was on Facebook. So, it was like 2016, I still went on Facebook, and I read about Remote Year, which had been started by a guy Greg Caplan and another guy named Sam Pessin.

And I knew Greg, we used to go to the same summer camp. I was actually his camp counsellor. And I reached out to him because I thought that the Remote Year business model was so cool. I had just come back from travelling. I still had wanderlust.

I ended up meeting up with Greg the next time he was in Chicago, and he told me about Remote Year and what they were doing.

And he gave me this whole pitch about there's this unique problem where they're taking people who work remotely all over the world, but they're having a hard time signing up enterprise clients because every big company will say, “How are you going to make sure these people are immigration compliant? How are you going to make sure they're not creating a tax nexus where we don't have one? There's no way we can do it.”

So, then Greg said, “Do you want to help with that?” And I said, “That's another thing I have no idea how to do, but if you're willing to be patient with me in trying to figure it out, I would love to help.”

Moving around the world

Job: And so, for the listeners, what does Remote Year do? What is it?

Sam: So, Remote Year is a platform for people who work remotely and want to travel and it's not a job provider. So, if you already have a job that you can do remotely and you don't want to do it from home or you don't want to do it from your local Starbucks, mind you, this is before COVID.

So, there were people working remotely, there were not nearly as many. This was a bit more novel at the time. And so, if you want to maintain your job, have access to an office space, but also travel and not spend too much time dealing with logistics, you sign up with Remote Year, it'll put you with a group of other people who are in the same position.

It used to be around the world, it was basically 12 countries in 12 months and Remote Year would take care of all the housing, access to co-working space, plane tickets, activities in every country. And yeah, it's a really cool platform.

Job: It's amazing. Yeah. And so, I would love to hear and dig a little bit into your time there. Like these enterprises, they struggled to deal with this. I hear this still all the time. Enterprises coming to us saying, “Well, I don't know about hiring somebody in another country, let alone somebody that moves across countries.”

And so, what was your answer to at the time, Greg, and to the customers of Remote Year?

Sam: The first thing was trying to figure out really what is the problem that these companies were concerned about and how much of it is just kind of BS that they were saying, they have some other reason that they can't really explain. They think remote work is not going to be helpful. They don't want their people to travel, so they just blame it on legal.

Our thought was, alright, maybe what they're blaming it on is real, let's try and solve those problems and see if we can get them over the hurdle.

I didn't have any real public policy experience, so I went into it figuring I'm just going to throw a bunch of things against the wall and see what sticks.

And the first country I went to, I was in Croatia, and I did my own research on Google and the internet trying to figure out what are the rules around working versus being a tourist. When do you need a work permit and when can you just kind of work remotely for a foreign entity or you're not displacing a local job?

And there was this catch 22 saying that the definition of remote work wasn't really covered. If you're working, you need a work permit. In order to get a work permit, you need a local entity to sponsor you. You obviously can't have a local entity sponsoring you if you're working for a foreign entity.

So, I figured maybe I'll just start with the U.S. Embassy, we're a U.S. company, maybe they'll be able to help. And I called them, and I talked to some guy there and I explained the problem and I said, “We're bringing all these people here, we want to do it on a tourist visa.”

And he said, “You're an idiot. Don't ask any questions. You're just going to raise red flags. Just do it. There's so little enforcement.” And I said, “Yeah, that's helpful for someone who's a freelancer or a contractor, but that's not helpful for these enterprises. Do you have someone else I can speak to? Can you introduce me to someone in the Croatian Ministry of the Interior?”

And I ended up getting in touch with someone who used to work at the Croatian Ministry of Interior. They told me the same thing and then they gave me someone else to talk to and we just went down the line with a lot of patience, until we ended up working with one of the big four accounting firms.

Their local office had contacts with the Ministry of the Interior, and so they were able to kind of liaise on our behalf and really explain to them what our clients looked like and get a limited opinion, but a written opinion saying that for these specific purposes, as long as you don't do X, Y, and Z, a tourist visa is fine.

And so, we just kind of tried to replicate that in as many countries as possible. I can talk about this stuff for days, so you can tell me how deep you want me to go.

Job: That's why you're here. No, I find it incredibly interesting.

Sam: Yeah. Well, I mean, so it's interesting because in nearly every country when the immigration laws were written, there wasn't Wi-Fi and not everybody had a smartphone and a laptop.

And so, they had these buckets of if you can get a student visa, if you're studying. You can get a work permit, if you're going somewhere and you're going to be hired locally, you're displacing a job, you're playing a role in the local labour economy.

You can get a business visa, which gets confusing because people think they can work on a business visa. But the business visas are really for, you're attending a conference or you're going to a meeting, you're not doing-

Job: You’re not painting the house.

Sam: Right. You have to keep in mind that work is a dirty word when you're at the border. And then, you can have a tourist visa. But now everybody who goes on vacation and has a white-collar professional job, they bring their laptop and they end up doing a little bit of work while they're on vacation.

I don't know anyone who doesn't…actually that's not true. I know some doctors when they travel, they don't work.

But everyone else, they travel, and they work. And in most countries, they're in this weird grey area of immigration law. And obviously it doesn't make sense that they would be immigration non-compliant for responding to a couple emails while they are in a foreign country. But in some countries, the letter of the law says that they are.

Where to start if you are a digital nomad

Job: If I am a nomad, what do I do? Where do I even start? I am domiciled in a certain country, like the Netherlands for me, I'm going to travel as a tourist. Is that the answer? Is that the answer that I'm going to give to my employer, to the enterprise employers that I have, to the local immigration people? I'm just a tourist for a month?

Sam: The U.S. is pretty strict about this and they may acknowledge that it's a strict and kind of out there interpretation, but the law's pretty clear that if you come here on a tourist visa and you do work and you somehow get caught, which does happen, you could have your visa pulled, you might not be able to come back for a couple years.

There are other countries where it's pretty clear that all they care about is who's paying you. So, you can work remotely just as long as you're not getting paid by a local entity.

You don't have to have work authorization, don't overstate your tourist visa, meet all the other tourists' visa requirements, meaning have a ticket out, have health insurance, have travel insurance, and there's no questions asked, no harm, no foul.

Job: To me, it's absolutely fascinating. At Remote, we see this all the time, as you can imagine. I think we see a lot of immigration and work permits for people that are moving permanently to location.

But we certainly see a small section of people that are actual nomads. When we speak with local attorneys for example, or governments, they tend to be very conservative and they essentially say, “Yeah, the letter of the law says, well work that's done here, you need a work permit for that.”

But exactly you said, it didn't exist before. Before the internet, the law was written, and remote work was not a thing.

Sam: Right. And it's a shame that as an individual you generally don't have the time and the resources to actually get in touch with someone in the Ministry of Interior or the Department of Immigration or whatever the relevant authority is in the country that you're travelling to, to confirm what the issue is.

There's obviously a lot of countries that have been creating or talking about creating digital nomad visas. Estonia is one of them. I think it's great.

I also think that for many cases it's overkill. It makes sense for a long-term stay. If you want to go and be a digital nomad, you're spending six months in each place. That's longer than the typical tourist visa, so it makes sense to have a different type of visa.

But I really think that countries could do a lot of benefit for the digital nomad community and probably for their own tourism, bring in more tourist dollars by just clarifying and saying, “We understand what remote work is, and you can do it on a tourist visa as long as you hit all the other requirements of the tourist visa.”

Job: I think that’s a really sensible thing to say. And it matches the reality that already exists today. I do actually think that that is how most people act and operate nowadays.

I vividly remember when I was with GitLab and we went through Y Combinator, exactly as you said. I was told specifically to not mention the word work when I was going through immigration, and I was on a business visa. And so, I explained our stay of three months in Y Combinator as a conference.

Sam: Right, yeah. It creates this perverse situation where obviously you don't want to lie to the immigration officials. The person who is coaching you on what to say when you're entering the country doesn't want to tell you to lie.

And so, you have to kind of find this way to massage the truth and explain to people the difference between business and work for immigration purposes, which is so nuanced and so different from common language use that is just frustrating.

When digital nomadism goes wrong

Job: In your time at Remote Year, do you have any anecdotes about how these things went? Did it ever go wrong?

Sam: I mean, I'll give you a personal anecdote, which was I was entering Ireland and I was very much there for tourist purposes. I was visiting some friends, but also kind of remote working while I was there.

And it was the first time that I had been stopped in a while and really kind of grilled by the immigration agent. And he kept asking me, “What are you going to do while you're here?” And I said, “I'm going to visit my friend in Cork.” And he said, “What else are you going to do?” And I said, “I think we might go to the Guinness Beer Museum.” And he said, “What else are you going to do?”

And eventually I said, “I don't know, I guess drink a lot of beer and whiskey.” And he laughed and said, “Stamp,” and let me go.

But the reason I give that anecdote is to acknowledge the place of privilege that people with strong passports have in these issues. If you have a U.S. passport, Canadian passport, most if not all, EU passports, the questions that you get asked when entering many countries as a tourist are pretty minimal and pretty light.

And I did see more people having issues when they had an Indian passport or a Chinese passport or various other passports and the term that people use as a weaker passport. It sounds kind of derogatory, but in these circles, these are strong passports and weak passports.

Job: Yeah. It's interesting, I think one of the things that I learned over these years is that whenever I organise an offsite where you bring together a number of people from the companies or coming from many different countries into a single place, it's very easy (I have an EU passport), to think, “Oh, you just fly in.” And that's all there is to it.

But there's a number of people that will have to sit in an office, get appropriate fees, and then still hope to get into the country. And some might fail, especially if they're coming from particular places on the planet, for no other reason, that they happen to have a password from that particular place.

They might be really well paid, they might be really long-term employed by you, but if they just happen to have the wrong passport they might not show up to a particular location.

Sam: Yeah. And it makes it more likely that you have the wrong passport, they're more likely to ask more questions, they're more likely to search your bags.

And then some people travel with a Bluetooth keyboard and mouse and monitor, and when you have that stuff and they see it, it's hard to say that you're not working because they'll want to know are you that serious of an online gamer that you take this step with you on your vacation? I doubt it.

Working in 20 countries in three years

Job: Sam, you yourself, you have been — I mean, I read this from your bio. You've worked in 20 plus countries over the last three years. Can you tell me more about that?

Sam: So, that I need to update my bio, because that was prior to COVID. But yeah, when I was working at Remote Year, I really was travelling all around Latin America, Europe, and Asia to a lesser extent.

My take was that a lot of the work I was doing at the time could be done remotely, but we were working for a travel company, and I had the opportunity to take advantage of that and anytime I could get a in-person meeting rather than a call, a Zoom or an email, I figured it was worth it.

So, I would try and go to countries that Remote Year operated in, because we always had staff in the country. The staff at Remote Year, the local staff was incredibly knowledgeable about their cities and their country. And so, I knew that I would be able to have unique and authentic cultural experiences while I was there too and make it more like a traveller and less like a tourist, if that makes sense.

Job: Your experience, I suppose it was good. I mean, you didn't stop doing it.

Sam: Oh yeah. I loved it. I mean, look, after doing total full-time nomading for three years, I got kind of road weary. I missed having a bicycle, I missed having my stereo.

If you've ever done backpacking or hostelling, there's a similar pattern, I think to digital nomading and travelling around a bunch where you will meet wonderful people, make really deep connections, and then due to the nature of scheduling, people go their different ways.

And then you think, “Maybe I should just go home. I'm never going to meet anyone this cool that I connect with again.”

And then, a week or a couple days later you meet other people, but it's an exhausting cycle.

Job: Yeah. And now you're done? Are you back on the road?

Sam: I'm done for now. We'll see, I split my time right now between Chicago and San Francisco for work and family. I miss travelling, but I think I'm good. I think I want to keep a home base for the time being.

Also, I've gotten spoiled now where I have a monitor, I have a microphone, I have a camera, and I don't like taking this set up on the road as I mentioned. Once you get used to having three different windows open next to each other all on the same screen, it's hard to give it up.

Job: No, I can very much relate to that. I love being in different places, but I love nothing more than coming back home, in part because I have my bicycles and my set up here.

Sam: Yeah, you're Dutch. I'm talking to the right audience when I said that I missed my bicycle.

Job: You're talking to the right … yeah, very much. Yeah. It's no joke. I have a whole bunch of bicycles. On Friday, I'm getting a new one. So, it's an addiction.

Sam: My first time in the Netherlands I had the most classic tourist situation where I got out of the taxi from the airport, stood directly in the middle of the bike lane and got yelled at by multiple people.

And literally, my friend who I was with still makes fun of me because I, in a state of shock from being yelled at by three people, I was like, “I'm sorry, I'm new here.” Which is a weird response.

Job: Yeah. It's scary when you first come into Amsterdam. Yeah, that is what I hear all my colleagues say, whenever you come over.

How can you hire digital nomads compliantly?

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Challenges of remote work at OnDeck

Job: You are now Head of Legal at OnDeck which is, I think it's a pretty big startup and with I believe a sizable remote workforce. You also have given a talk in the past about like the practical implications of having a remote workforce.

I'm curious to hear your take on like the challenges and what is it that you're facing? I can imagine it's a very different thing than having a group of nomads travelling around to have a team that is spread across the world.

Sam: Yes. It's a very different challenge. Easier to address in some ways and harder to address in others. There are the legal hurdles and then the practical hurdles and the practical ones are dealing with time zones, dealing with figuring out how to work remotely, asynchronously, and still create a company culture. All things I'm sure that you're very used to and the struggle's real, but it's surmountable.

And then the legal stuff of figuring out how to set up payroll in a foreign country. How to hire someone legally if you actually are hiring them as an employee rather than a contractor. Contractor hiring is this easy end around, you create misclassification risk.

An interesting thing that comes up on the legal side is it used to be really hard to do this appropriately from a legal perspective. You either had to create an entity locally, which is hard, and create a local bank account, which sometimes is even harder.

And then figure out payroll and local compliance. And in most cases, it doesn't make sense for companies if they're not going to be hiring 10 or more people.

There were a handful of companies that do what remote and the other global PEOs do, but they were very expensive. Cost prohibitive, unless you are hiring a C-suite level person at a really big company, they would want 15 to 20% of that person's salary on top.

And so, this is why most companies would either just not hire internationally or wait until they had an absolute screaming hot need and then create an entity there, or they would do it wrong.

Now with the remotes of the world, that initial hurdle of hiring, getting payrolls set up, figuring out local compliance is much easier because you just offload it, and you offload it at a very reasonable price.

The things that still come up I have found are around continuously managing an international workforce for American companies. They're very used to American labour laws, and they're used to being able to terminate someone at will. They're used to being able to not pay someone's severance. They're used to being able to do this unlimited PTO thing, which in my opinion, it's more like a marketing thing that's good for companies and bad for employees.

But prospective employees often hear it and like it, and you can't do that in many other countries.

I think also just understanding that there are some countries where it's very hard to terminate someone, period. And you may love this potential hire and you think they're so perfect for this role but are you aware that to the country that they're in, yes, it's very easy to hire them and remote and other global PEOs can facilitate that.

But if things go south, maybe the relationship stays fine, but there's a reduction in force and we have to unfortunately lay people off. This is going to be much harder, more expensive, and more time consuming than all the other employees.

Job: Yeah. I think this is a really big challenge. I think many of our customers are American employees and exactly that they're used to somewhat easily lay off people. And it's a very different reality, especially in different European countries and in between European countries. It's also very different on how this is handled and what can you do and what are the circumstances and what does the process look like.

I think for us, the challenge has always been like, how do we make that easy and how do we solve it? But yeah, in some countries there's just very little you can do. The letter of the law is really harsh and the protections for the employees are really great.

And there is much more of a culture of indefinite employment, not just in the sense of my contract doesn't have an expired date, but also, I'm expected to work at a given company forever for the rest of my life.

Sam: Right.

Job: And that is very ingrained in the culture.

Sam: Yeah. I think that expectation setting is really important and it's to the nature of trying to grow the business. A global PEO is incentivized to help you hire people and get them on board.

And I wish that they took more time to stop and say, “FYI, this is the first time you're hiring a person in this country. Let's go through the implications of that before — yes, we can do it for sure, but let's make sure we're both entering this with open eyes before you click hire.”

Job: Yeah, absolutely. I think that is really fair. And one of the things that we try to do is provide as much information and we do more and more over time upfront about how it is to hire in a particular location.

I think even for us, we don't want an employment to end. We don't want you to like end an employment in a particularly difficult country because I think for us, we essentially lose all our money on the cost related to managing such a process. But it certainly is really complex.

Predicting the future of digital nomadism

Job: Working with other legal professionals, do you think in that market in of itself, in the group of lawyers, that you find yourself, is remote working becoming more of a standard thing? Do you see it more often? Is there still a hesitancy or like a reliance on old-fashioned way of doing things?

Sam: I see it more often. I think the type of lawyers that I work with tend to like it because it means more work for them because it's still complex and just little things like the Department of Labour in the U.S. requires you to have a work and safety poster in your office, if you have over a certain number of employees.

And so, what do you do if you don't have an office? How do you make sure you're compliant or at least attempting to be compliant? Can you put it on your internal team webpage? Can you have it pinned on Slack?

And I mean, that's just like the low hanging fruit example. So, I think that lawyers, especially labour and employment lawyers, they like it because it's a lot of complex, unique, novel questions that they get to explore, and they get to make money off.

It could only happen remotely

Job: Sam, I have a last question for you.

Sam: Sure.

Job: That we ask all our guests, can you think of a time when you had to deal with a challenge that made you think, well this can only happen with distributed, with remote work?

Sam: So, this is a small one, but it's a persistent thing that really eats away at me, which is I normally work from home, but I also like to take a lot of walking calls, which you can't really do if you're in an office.

So, I consider that part of remote work. If I have a call that doesn't need to be on video, I'm just going to go for a walk. And the noise cancelling technology for headphones is great, but it's one way.

And so, I don't understand why there's not a better solve for background noise cancellation because it sounds fine to me, but the person who I'm speaking to can hear every bit of road noise, every person that walks by me, the guy across the street who just sneezed, et cetera.

And yeah, that's my pet peeve, is that that hasn't been figured out technologically yet.

Job: Your peers with whom you're talking to, they can hear you ordering the bagels.

Sam: Yeah, exactly.

Job: While you’re at the counter.

Sam: I mean, these are real first world problems, that's what keeps me up at night.

Job: That's great. Technology exists. Crisp is one of the companies that works-

Sam: So, does it work with phone calls, or does it have to be a VOIP call?

Job: I think it has to be some sort of internet call. I think voice calls, they probably bypass all of that. They don't want …

But who knows. Hey, next iPhone, next set of AirPods.

Sam: Yes. My biggest audience for this is my mother. So, normally that's a landline that I'm calling. I guess it's technically not a work call, but it doesn't feel like work, mom, if you're listening.

Job: Same, thank you so much for spending the time with us today.

Sam: Thank you, Job. It's great to meet you.

Job: Thanks to Sam for joining us today. I love to hear his pragmatic approach on dealing with work visas and digital nomads.

And so, that's it for another episode of Off Mute. We'll be back with our next guest in a couple of weeks. In the meantime, please subscribe to the podcast and give us five stars if you like what you've heard.

Otherwise, thanks for listening to Off Mute and see you next time.