Working Remotely for a Foreign Company: How to Decode Employer of Record (EoR) Contracts

How to Avoid Tax and Contractual Traps in EoR Contracts

Working remotely for a US or UK company while remaining a resident in Italy is the dream of many tech professionals. To hire legally without opening a local branch, foreign companies use an Employer of Record (EoR) like Deel, Remote, or Oyster. This creates a complex triangular contract that needs to be decoded to avoid losing protections.

This type of employment is rapidly spreading in 2026, but it requires attention to avoid discrepancies between the jurisdiction of the foreign client and that of the worker's country of residence.

The bureaucratic complexity and the lack of uniform regulations often place the employee in a state of involuntary professional instability.

Without a clear allocation of protections and duties, you risk being left without union protections or adequate insurance coverage on Italian soil.

This exposes the employee to sudden layoffs carried out abroad without respecting the protections provided by Italian law.

How the Triangular Contractual Relationship Works

In an EoR agreement, you sign an employment contract with the Italian intermediary (the Employer of Record), which is your legal employer. However, your daily activities and directives depend on the foreign client company. This structure can create ambiguity about who is responsible for workplace safety, vacation time, and union rights.

The Risks of Facilitated Termination and Loss of the National Collective Bargaining Agreement (CCNL)

Some EoR contracts attempt to include clauses that allow the foreign client company to terminate the employment relationship with very short notice or without the protections provided by the relevant Italian CCNL. Operating in Italy, you are entitled to the full application of Italian labor laws, regardless of the nationality of the end client.

The Forum for Resolving Labor Disputes

An insidious clause concerns the competent court in case of disputes over termination or non-payment. EoR contracts drafted abroad sometimes attempt to impose international courts or arbitration procedures in London or New York, whereas by law you have the right to appeal to the labor judge of your place of residence.

Managing Taxation and Social Security Contributions

The EoR must handle the payment of taxes and INPS contributions in Italy, acting as a withholding agent. Always verify that the contract correctly specifies the classification level and that the agreed gross salary includes all charges required by Italian regulations. NakedPact helps you scan EoR contracts to highlight anomalies.

Comparison: EOR (Employer of Record) vs Freelance Contractor

A comparison of legal protections and operational constraints for cross-border remote workers:

Tax and legal security in transnational remote work

The EoR tax regime may contain clauses that shift liability to the worker in the event of contribution disputes. With NakedPact, you can analyze the agreement between the Italian Employer of Record and the client company to ensure there are no penalties imposed on you for bureaucratic issues.

The extension also analyzes unemployment protections and guaranteed sick leave periods, checking that there are no discriminatory differences compared to direct employees residing in the client's home country.

With the NakedPact analyzer, you can sign transnational remote work contracts knowing which laws apply and how to enforce your employee rights.

This allows you to avoid challenges from the Italian Revenue Agency regarding fictitious foreign establishments or contribution defaults attributable to the end client.

Using standardized contracts verified by NakedPact reduces administrative risks for employees based in Europe.

Your job stability begins with a clear and airtight contract.

Frequently Asked Questions (FAQ) on EoR Contracts