Home Office in Paradise: Why the Balearic and Canary Islands are ideal for Workations

Many people are currently planning their vacations. But what if you could stay at your holiday destination, even while working? This is easier than you might think, as many employers are now surprisingly open to workation models, where employees work remotely from abroad. By incorporating workdays or planning additional vacation days, you can extend your stay without using up all your annual leave. This way, you can still travel even if you've already used up your vacation time.

The Canary and Balearic Islands have become popular destinations for people who want to combine long-term work and leisure through the workation model. In many areas, the internet is well developed, making it easy to work online and attend video meetings. For those planning a workation, thorough research can often lead to finding holiday accommodations with reliable internet connections at affordable rates.

Currently, there is no legal right to a workation, so it usually needs to be initiated by employees themselves and must be approved by the employer. However, the chances of getting a workation approved are quite good. Companies increasingly recognize that this model enhances their employer reputation and positively impacts productivity and employees' work-life balance.

Employers also use workations as an opportunity to send teams to work together abroad, attract younger employees, or offer competitive alternatives to international job offers. Until recently, working abroad was mostly limited to expatriates, employees specifically sent to work abroad with a pre-determined location. In contrast, workations can be undertaken several times a year and worldwide. To avoid legal uncertainties, many companies have developed guidelines to ensure transparency and document essential steps and procedures.

The choice of location is crucial for employers when considering workations. Many companies limit workations to countries within the EU or the European Economic Area (EEA). The reason is that stays in so-called third countries often require a residence permit. Although many countries now offer workation and remote work visas, these often come with lengthy processing times and additional costs, which HR departments tend to avoid.

When applying for a workation, four legal areas must generally be considered: labor law, immigration law, social security law, and tax law.

Usually, the labor law of the country where the employment contract was issued applies to a workation. However, the mandatory protection laws of the foreign work location must also be observed. This means that regulations regarding working hours, breaks, holidays, and compensation in the respective country must be followed.

Health insurance is another important aspect of any workation. Until a few years ago, employees, especially from Germany, would not automatically retain their health insurance coverage if they chose to work abroad on a self-initiated basis.

The European Commission recognized this issue and decided that a workation would be treated like an expatriation. This allows employees, similar to an expatriate assignment, to remain insured in Germany if the necessary requirements are met. The HR department only needs to coordinate with the relevant health insurance provider to initiate the required application process. This ensures that employees remain socially insured even while working abroad.

For workations within the EU, EEA, and Switzerland, the so-called A1 certificate is required. This certificate ensures continued participation in German health, nursing, pension, and unemployment insurance and is valid for stays of up to 24 months. This exempts the employee from foreign social security obligations and avoids double contributions.

For workations in third countries outside the EU, it must be checked whether a social security agreement exists with the respective country. If not, there could be a risk of dual contribution obligations. Popular destinations like Bali or Thailand fall into this category, which is why most employers exclude these countries as potential workation locations.

A supplemental travel health insurance policy, which also covers work activities, is always recommended. Many holiday destinations primarily offer private clinics, the costs of which are not covered by German statutory health insurance. Similarly, potential medical transports back home are not included.

Taxes should also be considered for extended stays. If you work abroad for more than 183 days in a year—more than half of your regular working time—there could be an income tax obligation in the workation country. If you work abroad for fewer than 183 days, you remain tax liable in Germany. Exceeding the 183-day threshold requires clarification on where income tax should be paid. This rule, however, only applies to countries with which Germany has a double taxation agreement. For other states, individual requirements must be checked.

If you are planning a workation on the Canary or Balearic Islands, check out our current offers on our website www.canarias-travel24.com. Alternatively, you can send us your ideas and preferences via email at This email address is being protected from spambots. You need JavaScript enabled to view it.

We would be happy to arrange an appointment to advise you in a personal conversation.