diff --git a/apps/federatedfilesharing/lib/FederatedShareProvider.php b/apps/federatedfilesharing/lib/FederatedShareProvider.php
index 1d1c00772c5bf..59087efaca544 100644
--- a/apps/federatedfilesharing/lib/FederatedShareProvider.php
+++ b/apps/federatedfilesharing/lib/FederatedShareProvider.php
@@ -329,14 +329,29 @@ public function update(IShare $share): IShare {
 			->set('expiration', $qb->createNamedParameter($share->getExpirationDate(), IQueryBuilder::PARAM_DATETIME_MUTABLE))
 			->executeStatement();
 
-		// send the updated permission to the owner/initiator, if they are not the same
-		if ($share->getShareOwner() !== $share->getSharedBy()) {
+		/*
+		 * If the share owner and share initiator are on the same instance,
+		 * then we're done here as the share was just updated above.
+		 *
+		 * However, if the share owner/sharee is on a remote instance (and thus we're dealing with a federated share),
+		 * then we are supposed to let the share owner/ sharee on the remote instance know.
+		 */
+		if ($this->shouldNotifyRemote($share)) {
 			$this->sendPermissionUpdate($share);
 		}
 
 		return $share;
 	}
 
+	/**
+	 * Notify owner/sharee if they are not the same and ANY of them is a remote user.
+	 */
+	protected function shouldNotifyRemote(IShare $share): bool {
+		$ownerOrSharerIsRemoteUser = !$this->userManager->userExists($share->getShareOwner())
+			|| !$this->userManager->userExists($share->getSharedBy());
+		return $ownerOrSharerIsRemoteUser && $share->getShareOwner() !== $share->getSharedBy();
+	}
+
 	/**
 	 * Send the updated permission to the owner/initiator, if they are not the same.
 	 *
@@ -466,13 +481,8 @@ public function delete(IShare $share) {
 	 * @throws HintException
 	 */
 	protected function revokeShare($share, $isOwner) {
-		if ($this->userManager->userExists($share->getShareOwner()) && $this->userManager->userExists($share->getSharedBy())) {
-			// If both the owner and the initiator of the share are local users we don't have to notify anybody else
-			return;
-		}
-
 		// also send a unShare request to the initiator, if this is a different user than the owner
-		if ($share->getShareOwner() !== $share->getSharedBy()) {
+		if ($this->shouldNotifyRemote($share)) {
 			if ($isOwner) {
 				[, $remote] = $this->addressHandler->splitUserRemote($share->getSharedBy());
 			} else {
diff --git a/apps/federatedfilesharing/tests/FederatedShareProviderReshareRemoteTest.php b/apps/federatedfilesharing/tests/FederatedShareProviderReshareRemoteTest.php
new file mode 100644
index 0000000000000..65cecaf1580c1
--- /dev/null
+++ b/apps/federatedfilesharing/tests/FederatedShareProviderReshareRemoteTest.php
@@ -0,0 +1,417 @@
+<?php
+
+declare(strict_types=1);
+/**
+ * SPDX-FileCopyrightText: 2026 Nextcloud GmbH and Nextcloud contributors
+ * SPDX-License-Identifier: AGPL-3.0-or-later
+ */
+
+namespace OCA\FederatedFileSharing\Tests;
+
+use LogicException;
+use OC\Federation\CloudId;
+use OC\Share20\Share;
+use OCA\FederatedFileSharing\AddressHandler;
+use OCA\FederatedFileSharing\FederatedShareProvider;
+use OCA\FederatedFileSharing\Notifications;
+use OCA\FederatedFileSharing\TokenHandler;
+use OCP\Constants;
+use OCP\DB\IResult;
+use OCP\DB\QueryBuilder\IExpressionBuilder;
+use OCP\DB\QueryBuilder\IQueryBuilder;
+use OCP\Federation\ICloudFederationProviderManager;
+use OCP\Federation\ICloudIdManager;
+use OCP\Files\Folder;
+use OCP\Files\IRootFolder;
+use OCP\GlobalScale\IConfig as GlobalScaleConfig;
+use OCP\IConfig;
+use OCP\IDBConnection;
+use OCP\IL10N;
+use OCP\IUserManager;
+use OCP\Share\IShare;
+use PHPUnit\Framework\MockObject\MockObject;
+use Psr\Log\LoggerInterface;
+use Psr\Log\NullLogger;
+
+class FederatedShareProviderReshareRemoteTest extends \Test\TestCase {
+	private IDBConnection&MockObject $connection;
+	private AddressHandler&MockObject $addressHandler;
+	private Notifications&MockObject $notifications;
+	private TokenHandler&MockObject $tokenHandler;
+	private IL10N&MockObject $l10n;
+	private IRootFolder&MockObject $rootFolder;
+	private IConfig&MockObject $config;
+
+	private IUserManager&MockObject $userManager;
+	private ICloudIdManager&MockObject $cloudIdManager;
+	private GlobalScaleConfig&MockObject $gsConfig;
+	private ICloudFederationProviderManager&MockObject $cloudFederationProviderManager;
+	private LoggerInterface $logger;
+	private FederatedShareProvider $shareProvider;
+
+
+	protected function setUp(): void {
+		$this->connection = $this->createMock(IDBConnection::class);
+		$this->addressHandler = $this->createMock(AddressHandler::class);
+		$this->notifications = $this->createMock(Notifications::class);
+		$this->tokenHandler = $this->createMock(TokenHandler::class);
+		$this->l10n = $this->createMock(IL10N::class);
+		$this->rootFolder = $this->createMock(IRootFolder::class);
+		$this->config = $this->createMock(IConfig::class);
+		$this->userManager = $this->createMock(IUserManager::class);
+		$this->cloudIdManager = $this->createMock(ICloudIdManager::class);
+		$this->gsConfig = $this->createMock(GlobalScaleConfig::class);
+		$this->cloudFederationProviderManager = $this->createMock(ICloudFederationProviderManager::class);
+		$this->logger = new NullLogger();
+
+		$this->shareProvider = new FederatedShareProvider(
+			$this->connection,
+			$this->addressHandler,
+			$this->notifications,
+			$this->tokenHandler,
+			$this->l10n,
+			$this->rootFolder,
+			$this->config,
+			$this->userManager,
+			$this->cloudIdManager,
+			$this->gsConfig,
+			$this->cloudFederationProviderManager,
+			$this->logger,
+		);
+	}
+
+	/**
+	 * This test case validates that requestReShare is called when creating a federated share.
+	 *
+	 * We have three actors:
+	 *
+	 * jane@https://origin.test
+	 * alice@https://local.test
+	 * bob@https://destination.test
+	 *
+	 * Jane shared the folder with Alice which re-shares the folder with Bob.
+	 *
+	 * The expected outcome is, that Alice sends a request to Jane to share the folder with Bob.
+	 */
+	public function testCreateRemoteOwner(): void {
+		$permissions = Constants::PERMISSION_READ | Constants::PERMISSION_CREATE | Constants::PERMISSION_UPDATE | Constants::PERMISSION_DELETE;
+
+		$node = $this->createMock(Folder::class);
+		$node->method('getId')->willReturn(1000);
+		$node->method('getName')->willReturn('Share 1');
+
+		/*
+		 * Mocks getSharedWith ($alreadyShared and $alreadySharedGroup).
+		 * The share we are going to create does not already exist.
+		 */
+		$expr1 = $this->createMock(IExpressionBuilder::class);
+		$expr1->method('in')->willReturn('');
+		$expr1->method('eq')->willReturn('');
+
+		$result1 = $this->createMock(IResult::class);
+		$result1->method('fetchAssociative')->willReturn(false);
+
+		$qb1 = $this->createMock(IQueryBuilder::class);
+		$qb1->method('select')->willReturnSelf();
+		$qb1->method('from')->willReturnSelf();
+		$qb1->method('where')->willReturnSelf();
+		$qb1->method('expr')->willReturn($expr1);
+		$qb1->method('createNamedParameter')->willReturn('');
+		$qb1->method('executeQuery')->willReturn($result1);
+
+		/*
+		 * Mocks for getShareFromExternalShareTable.
+		 * The share we are going to create is an external share.
+		 */
+		$expr2 = $this->createMock(IExpressionBuilder::class);
+		$expr2->method('eq')->willReturn('');
+
+		$result2 = $this->createMock(IResult::class);
+		$result2->method('fetchAllAssociative')->willReturn([
+			[
+				'id' => 100000,
+				'parent' => -1,
+				'share_type' => 0,
+				'remote' => 'https://origin.test/',
+				'remote_id' => '10',
+				'share_token' => 'share_token1',
+				'password' => '',
+				'name' => '/Share1',
+				'owner' => 'jane', // owner in share_external is the user on the remote instance
+				'user' => 'alice', // user in share_external is the receiver on the current instance
+				'mountpoint' => '/Share1',
+				'mountpoint_hash' => '94ee935396a30e27953838d0f65d1e17', // md5(mountpoint)
+				'accepted' => 1,
+			],
+		]);
+
+		$qb2 = $this->createMock(IQueryBuilder::class);
+		$qb2->method('select')->willReturnSelf();
+		$qb2->method('from')->willReturnSelf();
+		$qb2->method('where')->willReturnSelf();
+		$qb2->method('expr')->willReturn($expr2);
+		$qb2->method('createNamedParameter')->willReturn('');
+		$qb2->method('executeQuery')->willReturn($result2);
+
+		/*
+		 * Mocks for addShareToDB.
+		 * The record on the local instance for the outgoing share.
+		 */
+		$expr3 = $this->createMock(IExpressionBuilder::class);
+		$expr3->method('eq')->willReturn('');
+
+		$result3 = $this->createMock(IResult::class);
+		$result3->method('fetchAllAssociative')->willReturn([
+			[
+				'id' => 100000,
+				'parent' => -1,
+				'share_type' => 0,
+				'remote' => 'https://origin.test/',
+				'remote_id' => '10',
+				'share_token' => 'share_token2',
+				'password' => '',
+				'name' => '/Share1',
+				'owner' => 'jane', // owner in share_external is the user on the remote instance
+				'user' => 'alice', // user in share_external is the receiver on the current instance
+				'mountpoint' => '/Share1',
+				'mountpoint_hash' => '94ee935396a30e27953838d0f65d1e17', // md5(mountpoint)
+				'accepted' => 1,
+			],
+		]);
+
+		$qb3 = $this->createMock(IQueryBuilder::class);
+		$qb3->method('insert')->willReturnSelf();
+		$qb3->method('setValue')->willReturnSelf();
+		$qb3->method('getLastInsertId')->willReturn(2000);
+
+		/*
+		 * Mocks for updateSuccessfulReShare
+		 */
+		$expr4 = $this->createMock(IExpressionBuilder::class);
+		$expr4->method('eq')->willReturn('');
+
+		$qb4 = $this->createMock(IQueryBuilder::class);
+		$qb4->method('update')->willReturnSelf();
+		$qb4->method('where')->willReturnSelf();
+		$qb4->method('expr')->willReturn($expr4);
+		$qb4->method('set')->willReturnSelf();
+		$qb4->method('createNamedParameter')->willReturn('');
+
+		/*
+		 * Mocks for storeRemoteId.
+		 */
+		$qb5 = $this->createMock(IQueryBuilder::class);
+		$qb5->method('insert')->willReturnSelf();
+		$qb5->method('values')->willReturnSelf();
+
+		/*
+		 * Mocks for getRawShare.
+		 */
+		$expr6 = $this->createMock(IExpressionBuilder::class);
+		$expr6->method('eq')->willReturn('');
+
+		$result6 = $this->createMock(IResult::class);
+		$result6->method('fetchAssociative')->willReturn([
+			'id' => 20000,
+			'share_type' => IShare::TYPE_REMOTE,
+			'share_with' => 'bob@https://destination.test',
+			'password' => null,
+			'uid_owner' => 'jane@origin.test',
+			'uid_initiator' => 'alice',
+			'parent' => null,
+			'item_type' => 'folder',
+			'item_source' => (string)$node->getId(),
+			'item_target' => null,
+			'file_source' => $node->getId(),
+			'file_target' => '',
+			'permissions' => $permissions,
+			'stime' => 0,
+			'accepted' => 0,
+			'expiration' => null,
+			'token' => 'share_token3',
+			'mail_send' => 0,
+			'share_name' => null,
+			'password_by_talk' => 0,
+			'note' => null,
+			'hide_download' => 0,
+			'label' => null,
+			'attributes' => null,
+			'password_expiration_time' => null,
+			'reminder_sent' => 0,
+		]);
+
+		$qb6 = $this->createMock(IQueryBuilder::class);
+		$qb6->method('select')->willReturnSelf();
+		$qb6->method('from')->willReturnSelf();
+		$qb6->method('where')->willReturnSelf();
+		$qb6->method('expr')->willReturn($expr6);
+		$qb6->method('createNamedParameter')->willReturn('');
+		$qb6->method('executeQuery')->willReturn($result6);
+
+
+		$queryBuilderMatcher = $this->exactly(8);
+		$this->connection
+			->expects($queryBuilderMatcher)
+			->method('getQueryBuilder')
+			->willReturnCallback(function () use ($queryBuilderMatcher, $qb1, $qb2, $qb3, $qb4, $qb5, $qb6) {
+				return match ($queryBuilderMatcher->numberOfInvocations()) {
+					1, 2 => $qb1,
+					3, 5 => $qb2,
+					4 => $qb3,
+					6 => $qb4,
+					7 => $qb5,
+					8 => $qb6,
+					default => throw new LogicException('Unexpected number of invocations for getQueryBuilder')
+				};
+			});
+
+		// the cloud id for the recipient
+		$this->cloudIdManager->method('resolveCloudId')
+			->with('bob@https://destination.test')
+			->willReturn(new CloudId(
+				'bob@https://destination.test',
+				'bob',
+				'https://destination.test',
+				'Bob', // is usually null in prod, setting it here to avoid additional mocking
+			));
+
+		$this->addressHandler->method('generateRemoteURL')
+			->willReturn('https://local.test');
+		$this->addressHandler->method('compareAddresses')
+			->willReturn(false);
+
+		// the cloud id of the actual owner
+		$this->cloudIdManager->method('getCloudId')
+			->willReturn(new CloudId(
+				'jane@https://origin.test',
+				'jane',
+				'https://origin.test',
+				'Jane', // is usually null in prod, setting it here to avoid additional mocking
+			));
+
+		$this->notifications->expects($this->once())
+			->method('requestReShare')
+			->with(
+				$this->equalTo('share_token1'),
+				$this->equalTo('10'),
+				$this->equalTo('2000'),
+				$this->equalTo('https://origin.test/'),
+				$this->equalTo('bob@https://destination.test'),
+				$this->equalTo($permissions),
+				$this->equalTo('Share 1'),
+				$this->equalTo(IShare::TYPE_REMOTE),
+			)
+			->willReturn(['share_token2', '20']);
+
+		$share = new Share($this->rootFolder, $this->userManager);
+		$share
+			->setSharedWith('bob@https://destination.test')
+			->setShareOwner('alice')
+			->setSharedBy('alice')
+			->setPermissions($permissions)
+			->setShareType(IShare::TYPE_REMOTE)
+			->setNode($node)
+			->setTarget('/Share1');
+
+		$this->shareProvider->create($share);
+	}
+
+	/**
+	 * This test case validates that sendPermission is called when updating a federated share.
+	 *
+	 * We have three actors:
+	 *
+	 * jane@https://origin.test
+	 * alice@https://local.test
+	 * bob@https://destination.test
+	 *
+	 * Jane shared the folder with Alice which re-shared the folder with Bob.
+	 * Alice is now changing the permissions for the share.
+	 *
+	 * The expected outcome is, that Alice sends a request to Jane to change the share.
+	 */
+	public function testUpdateRemoteOwner(): void {
+		$permissions = Constants::PERMISSION_READ;
+
+		$node = $this->createMock(Folder::class);
+		$node->method('getId')->willReturn(1000);
+		$node->method('getName')->willReturn('Share 1');
+
+		/*
+		 * Mocks update share.
+		 */
+		$expr1 = $this->createMock(IExpressionBuilder::class);
+		$expr1->method('eq')->willReturn('');
+
+		$qb1 = $this->createMock(IQueryBuilder::class);
+		$qb1->method('update')->willReturnSelf();
+		$qb1->method('where')->willReturnSelf();
+		$qb1->method('expr')->willReturn($expr1);
+		$qb1->method('createNamedParameter')->willReturn('');
+		$qb1->method('set')->willReturnSelf();
+
+		/*
+		 * Mocks getRemoteId.
+		 */
+		$expr2 = $this->createMock(IExpressionBuilder::class);
+		$expr2->method('eq')->willReturn('');
+
+		$result2 = $this->createMock(IResult::class);
+		$result2->method('fetchAssociative')->willReturn([
+			'share_id' => 3000,
+			'remote_id' => '10',
+		]);
+
+		$qb2 = $this->createMock(IQueryBuilder::class);
+		$qb2->method('select')->willReturnSelf();
+		$qb2->method('from')->willReturnSelf();
+		$qb2->method('where')->willReturnSelf();
+		$qb2->method('expr')->willReturn($expr2);
+		$qb2->method('createNamedParameter')->willReturn('');
+		$qb2->method('executeQuery')->willReturn($result2);
+
+		$queryBuilderMatcher = $this->exactly(2);
+		$this->connection
+			->expects($queryBuilderMatcher)
+			->method('getQueryBuilder')
+			->willReturnCallback(function () use ($queryBuilderMatcher, $qb1, $qb2) {
+				return match ($queryBuilderMatcher->numberOfInvocations()) {
+					1 => $qb1,
+					2 => $qb2,
+					default => throw new LogicException('Unexpected number of invocations for getQueryBuilder')
+				};
+			});
+
+		$this->userManager->method('userExists')
+			->willReturnMap([
+				['jane@https://origin.test', false],
+				['alice', true],
+			]);
+
+		$this->addressHandler->method('splitUserRemote')
+			->willReturn(['jane', 'https://origin.test']);
+
+		$this->notifications->expects($this->once())
+			->method('sendPermissionChange')
+			->with(
+				$this->equalTo('https://origin.test'),
+				$this->equalTo('10'),
+				$this->equalTo('share_token3'),
+				$this->equalTo($permissions),
+			);
+
+		$share = new Share($this->rootFolder, $this->userManager);
+		$share
+			->setId('3000')
+			->setToken('share_token3')
+			->setSharedWith('bob@https://destination.test')
+			->setShareOwner('jane@https://origin.test')
+			->setSharedBy('alice')
+			->setPermissions($permissions)
+			->setShareType(IShare::TYPE_REMOTE)
+			->setNode($node)
+			->setTarget('/Share1');
+
+		$this->shareProvider->update($share);
+	}
+}
diff --git a/apps/federatedfilesharing/tests/FederatedShareProviderTest.php b/apps/federatedfilesharing/tests/FederatedShareProviderTest.php
index 0852a4b548904..b5cb8a85a5351 100644
--- a/apps/federatedfilesharing/tests/FederatedShareProviderTest.php
+++ b/apps/federatedfilesharing/tests/FederatedShareProviderTest.php
@@ -450,11 +450,7 @@ public function testUpdate(string $owner, string $sharedBy, ?\DateTime $expirati
 				$sharedBy . '@http://localhost'
 			)->willReturn(true);
 
-		if ($owner === $sharedBy) {
-			$this->provider->expects($this->never())->method('sendPermissionUpdate');
-		} else {
-			$this->provider->expects($this->once())->method('sendPermissionUpdate');
-		}
+		$this->provider->expects($this->never())->method('sendPermissionUpdate');
 
 		$this->rootFolder->expects($this->never())->method($this->anything());