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Umbrella Company in Macau
Independent contracting in Macau isn’t always straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in Macau, you should be aware of what you’re getting into – and how you can make it simpler.
Difficulties of Contracting in Macau
Generally, you need to have an employer sponsor to secure the appropriate work permit and work visa for Macau.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Macau, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Macau and your home country can seem like full-time work in itself.
How Umbrella Companies Work
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. Some companies specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
An Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Macau. Even better, most are experts in Macanese and expat tax law, meaning they’ll also help you optimise your earnings in Macau.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Why Use an Umbrella Company in Macau
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Macau (which means avoiding fees, fines, or even worse penalties).
How We Can Help You
There’s a huge variety of Umbrella Companies with different specialities and advantages in Macau. How do you find the right one for your circumstances?
We work closely with Umbrella Companies throughout Macau and match contractors with the right company for them. If you’ve already secured a contract in Macau, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
A Contractor’s Guide to Taxes in Macau
One of the most consistently challenging aspects of contracting in Macau is complying with the country’s tax system. As well as paying tax in Macau, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Macau?
If you’re working in Macau under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Macau for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Macau, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Macau through PAYE is left with the prospect of doing everything themselves.
Do you know much about Macanese Tax Law? Does Macau have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Macau can range from 7 to 12 per cent, and you need to be sure you are placed in the correct tax brackets.
How to File Taxes in Macau
Your employer is required to file taxes on your behalf in Macau.