Victoria Hernández Senior Associate Costa Rica E-mail
Remote work has transformed how companies operate and manage relationships with their employees. Since its rise, driven by the need to adapt to the effects of the pandemic, several months have passed. In Costa Rica, operations under the free trade zone regime had to respond to this global emergency by allowing companies to authorize employees to take home the necessary equipment to continue performing their duties. Since then, the law and regulations governing the regime have been amended to allow companies to authorize remote work. However, it is essential to properly interpret this change and assess the practical effects it has had on the day-to-day operations of companies under the regime. For companies operating under the regime, remote work must maintain a reasonable proportionality between the number of employees working remotely and the total number of employees. Free Trade Zone legislation is based on the premise that companies must operate from their authorized site to ensure proper control of their assets and operations. Having virtually all employees working 100% remotely does not appear to be consistent with the spirit of the law. Therefore, companies must develop hybrid work models that allow them to: (i) adapt to the demand for remote work, and (ii) comply with the regulations designed to safeguard the conditions under which they receive tax benefits. It is essential for companies under the regime to conduct an internal analysis of this proportionality. Systems in which remote work predominates in operations should be avoided, as authorities may argue that the company is undermining the rules requiring operations from an authorized site and proper control of assets under the regime. These same considerations apply when employees request to work from a location other than their fixed residence or even wish to relocate to another country. While these practices may help attract and retain talent, they must be assessed in light of the rules and obligations accepted by companies upon entering the free trade zone regime. Additionally, it is important to note that the rules governing telework under the regime are reflected in minor amendments to the law and regulations, which do not establish clear procedures or requirements on how to implement this model within the framework of the general rule. Therefore, it would be beneficial for local authorities to issue official guidance clarifying the minimum parameters that companies under the regime should consider when developing their internal remote work policies. Accordingly, it is crucial for companies to review their processes, internal policies, and corporate practices to determine whether they are considering not only the benefits of remote work but also their obligations as entities operating under a special tax regime. Furthermore, companies under the regime may not necessarily apply practices established by their headquarters without first evaluating how these align with their regulatory obligations. In the absence of general parameters, companies should take as a guiding principle that remote work should not be the general rule. For more information, please contact us at [email protected].
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