How to avoid common legal mistakes when working remotely from LATAM

Working remotely from Latin America sounds like a dream—and it can be. But overlooking the legal details can turn that dream into an expensive headache.

In this guide, we’ll walk you through the most common legal pitfalls remote workers face and show you how to avoid them. From choosing the right visa to staying compliant with tax laws, we've got your back.

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Visas and Immigration

Common Mistake: Working on a tourist visa.

What You Need to Know:

• Most countries require a specific visa if you plan to work remotely, even if you’re earning money from abroad.
• Some countries now offer "Digital Nomad Visas" (e.g., Costa Rica, Colombia, Brazil).

Tip: Always check the latest immigration policies and opt for a visa that aligns with your activity.

Bonus: Shepherd helps remote workers find the correct visa based on their country of origin and destination.

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Taxes

Common Mistake: Assuming you don’t owe taxes because your employer is abroad.

What You Need to Know:

• Many LATAM countries consider tax residency based on presence (usually 183+ days).
• You might be subject to local income tax even if you're paid from the U.S.
• The U.S. taxes citizens worldwide, but you may qualify for the Foreign Earned Income Exclusion (FEIE).

Tip: Work with a cross-border tax advisor to avoid double taxation and stay compliant.

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‍Contracts & Labor Laws

Common Mistake: No formal contract or using a generic template.

What You Need to Know:

• Local laws might interpret your working relationship differently (e.g., independent contractor vs. employee).
• A poorly written contract can result in unexpected liabilities or penalties.

Tip: Draft contracts that clearly outline your role, compensation, and dispute resolution, adapted to both local and U.S. laws.

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Health Insurance, Banking & Data Privacy

Other Overlooked Areas:

• Healthcare: You may not be covered outside of your country of residence. Look into global health insurance plans.
• Banking: Some LATAM countries restrict foreign account openings.
• Data Privacy: Laws like Brazil’s LGPD may impact how you handle client data remotely.

Tip: Review these aspects with local experts before your move.

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Final Checklist & Shepherd's Support

Checklist Before You Go:

Need help? Shepherd offers:

• Tailored visa & relocation advice
• Legal contract support
• Tax and compliance consultations

Get in touch for a free consultation today.

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