In today’s day, remote work can mean many things. But one’s certain: it’s a state of mind. Some companies are pushing back, demanding employees return to the office. Many resist, preferring the freedom to work remotely, and are already looking for opportunities that meet their wishes.

On one side, you have remote-first companies. And on the other, remote-friendly ones. Understanding the differences between these approaches and their obligations is crucial when looking for a new job.

Good to know: working remotely doesn’t mean you need to work from home. It means you can work from anywhere in the world. Remember: it’s a state of mind that lets you adapt work to life and not the other way around.

Choosing the right distributed company for you is a challenge we simplify in this post. Learn about the differences between these remote approaches, the obligations, and what to value when landing a new job.

Man working remotely on a computer and phone for a distributed company

Distributed Company: What’s the Difference Between Remote-First and Remote-Friendly Companies?

In a nutshell, the first allows you always to work remotely, when and where you decide. The second lets you do that as long as it’s from a known address, generally during a specific work schedule.

And let’s not forget about “hybrid” organizations, which allow remote work during some weekdays and in-office on the remaining – though we won’t delve into this approach in this post.

So, let’s dive into the main differences between remote-first and remote-friendly companies.

What is a Remote-First Company?

A remote-first company prioritizes remote work as its default operating model. It has everything to do with a distributed company’s culture – besides being something the board believes in, it’s also something practiced daily, from leaders to employees.

They all believe that the future of work is decentralized, not isolated.

Unlike traditional companies – that view remote work as an exception – remote-first organizations design their workflows, communication practices, and culture to answer to a distributed workforce. Companies like GitLab, Automattic, HashiCorp, and ActivTrak show how successful this approach can be for the workforce and the whole organization.

Another crucial point about these companies is asynchronous communication. This means you don’t have to be online all the time, hop on Zoom whenever someone calls you, or answer emails or messages right when you get them.

It means using remote collaboration tools. Answering when you can and ensuring you deliver your best work every day. Remote-first companies empower employees to work on their terms, regardless of where they are and in which time zone.

What is a Remote-Friendly Company?

On the other hand, a remote-friendly company offers flexible work options, including remote work.

In remote-friendly companies, management usually originates from a central location where traditional in-office work is the standard practice. This approach allows remote work but with limitations, and it’s typically set to a specific address.

This approach acknowledges the benefits of remote work without restructuring the entire organization around it. But (because there’s always a “but”) you must follow a specific work schedule – generally 40 hours a week, 8 hours a day.

Though these are flexible companies to work for, consider focusing on remote-first companies if your goal is total freedom – even if it’s not always a walk in the park.

Man working at home, for a distributed company, while on the phone

Choosing the Flexibility of a Remote-First Company: Challenges to Look Out For

Now that you understand distributed companies’ main differences and you’ve chosen the freedom for fully remote work, it’s time to face the challenges. As you know, it’s not all upside.

You need to weigh the pros and cons when looking for a new job or if you’re already in the middle of a recruiting process.

And here are the most important ones.

Navigating Timezones and Coordination

For remote-first companies with global teams, managing time zones can be challenging – which extends to you.

Coordinating meetings and collaborative efforts – when needed – across different time regions requires careful planning. This means that, sometimes, you may need to change your routine a bit: not working out when you planned to or having lunch a bit later than usual.

It all comes down to flexibility (from both sides). And also the ability to leverage technology.

Balancing Meetings and Autonomy

Distributed companies with a remote-first approach often must balance team collaboration through meetings while respecting employees' work.

So, when deciding which company to choose, remember that you need clear guidelines for when colleagues schedule meetings. Assure that the company adopts asynchronous communication for non-urgent matters so your productivity remains untouched.

Now, let’s dive into the less practical topics – yet some of the most decisive.

The Remote-First Mindset

The remote-first mindset is fundamental for both parties.

It emphasizes trust, accountability, and results-driven work culture. A remote-first company measures success based on the quality of work and outcomes achieved. It doesn’t rely on hours worked per day or week – much less in a physical office.

If you value well-delivered work over the number of hours worked, you should aim for this mindset when looking for a new job.

By now, you know that only some distributed companies have a remote-first approach. So choose wisely, and don’t forget your legal and tax obligations.

Two men working at a cafe for a distributed company

Legal Obligations and Considerations When Working Remotely

This will always be a complex matter, often forgotten when looking for a new job. And it’s easy to understand why: you may think your legal and tax obligations remain the same when working for a company abroad.

You do indeed have to follow them, but most certainly not the same way. There are a bunch of new ramifications to consider.

Tax and Legal Implications

Remote work across international borders can introduce tax implications for employers and employees.

So, let’s focus on what matters to you.

Suppose you decide to work remotely, mainly from your country of residence. In that case, you need to ensure you have the proper legal and tax setup:

If you and your employer decide on a contractor agreement, it means you’ll have to invoice your employer for your work and take care of your taxes wherever you’re based;
On the other hand, if you’d rather have a compliant work contract, you can suggest your company to hire you via a local Employer of Record. If you’re based in Portugal and want to know more about this, please get in touch with our team.

But, if you plan to travel while working, there are other things to consider. If you want to become a Digital Nomad, ensure you're legally allowed to travel to your chosen destination.

Here's some essential information, but remember, each situation varies. Conduct your research and consider professional advice for passport validity, Visas, health insurance, taxes, and other legal prerequisites.

Passports: it’s essential for international travel. Check its expiration date well before departure and renew if needed (you need at least 6 months of validity; otherwise, you can’t travel);
Visas: A specific visa might be required depending on your destination and stay duration. Options range from tourist visas to digital nomad or work visas;
Health insurance: Certain countries mandate health insurance coverage for visitors. Arrange adequate coverage to prevent issues upon arrival;
Taxes: Tax systems often aren't designed for remote workers. For instance, in the EU, you'll likely need to establish a "Tax Residency" and clarify your employment status. Fulfill your obligations and provide necessary information to your employer.

Remember, personal circumstances can impact these requirements, so do your research.

Contractual Agreements

Clear and comprehensive contractual agreements are essential in any distributed company.

Contracts should address remote work expectations, including working hours, holiday periods, communication protocols, compensation, and performance evaluation methods.

Try to sink that in before jumping into one of the most critical parts of this process: the cultural fit.

Woman in an online interview for a distributed company

Evaluating a Distributed Company During Recruitment (And Why the Cultural Fit is Critical)

Once you’re all good with the numbers and work process, ensure you’re aligned with the company’s culture:

Do you share the same values?
Is the mission aligned with your goals?
Is there anything you disagree with?
Do you feel something’s off?

Don’t ignore these questions when deciding which distributed company you’ll choose.

Cultural Fit

Seek a company whose values align with yours. Assess the organization's mission, vision, and work culture to ensure a comfortable fit.

Use professional tools to know as much as you can about a company. For example, Glassdoor showcases other employees’ (and former employees’) opinions and reviews and compares salary ranges for the job you’re applying to.

Hop on LinkedIn, too, to know the company deeper. Check variables like the company’s median tenure – if it’s too low, consider whether it makes sense to go further on the recruiting process.

Communication Practices

Transparent and effective communication is vital in remote work settings. Evaluate how the company communicates with remote teams and ensure everyone remains informed and engaged.

Ask questions about it in the interviews to ensure you have the whole picture.

Work-life Balance

Look for a distributed company that values flexibility and autonomy and respects your productivity patterns. Believe us: this will weigh the most over time.

Professional Development and Support

Consider a job that allows a career.

An opportunity that assures skill development, growth, and mentorship. A company invested in the progression of its remote employees shows a clear commitment to everyone’s long-term success.

Before deciding, consider all the pros and cons of remote-first and remote-friendly companies. Understand the benefits, legal and tax obligations, cultural alignment, communication practices, flexibility, and professional development opportunities. Making an informed decision will ensure you find a distributed company that aligns with your values and work preferences, setting you up for success wherever you land.

The Guide for Job Seekers: What to Look For in a Distributed Company