The Client is a UK recruitment company specializing in contract placements within telecommunications.
The Client uses international contractors for technical assignments with their customers - multinational telecommunications providers. The customer had agreed to use an Indian technical consultant proposed by the Client and was pushing for an immediate start. The customer also wanted confirmation that any contractor supplied was fully compliant with local employment, taxation and immigration regulations.
The consultant, being a national of India, was from a non visa waiver country and required sponsorship to enter South Africa. Furthermore the consultant wanted to know their after-tax earnings before accepting their assignment. The recruiter needed a compliant payment and employment solution with visa sponsorship in order to win the deal.
The Client was not experienced with international taxation or migration and was not incorporated in South Africa. They were unable to provide sponsorship or local payroll. As the contractor was from a non visa waiver country they needed a visa sponsored by an approved South African employer to enter South Africa. The recruiter needed a contractor management company who could assist the contractor with entering South Africa and commencing work quickly.
The Client contacted Contractor Taxation Ltd and we engaged our local partner in South Africa. Using the contractor’s gross daily rate, their nationality and desired start date we gave the client a quote on net earnings and a detailed action plan for proceeding. This was supplied within 1 business day and included the steps to get the contractor sponsored in South Africa, the timing of each step, the cost of processing and the documentation required.
The local partner proposed bringing the contractor in on an 11-2 Business Visa to facilitate starting asap and then transferring onto a General Work Permit. Based on the list of documents supplied, the contractor and end customer started collating paperwork immediately to avoid any delays in processing.
Once the recruiter had given preliminary approval to the proposal our local partner had a detailed conversation with the contractor to ensure they understood the process and agreed to proceed. Through our expertise in dual tax agreements and non-domicile legislation, the contractor was assured of the highest possible retention rate on their earnings. Additionally they were fully compliant with all relevant tax, employment and immigration law.
The Client worked with Contractor Taxation Ltd to agree a specific contract template which ensures the contractors are bound by the necessary contractual terms. Within hours of the contractor accepting The Client’s offer we had him setup in our partners invoicing and payment system and sent through the signed contracts.
The business visa was obtained in a matter of days and the contractor was able to travel to South Africa and commence the assignment. Our local partner met them at the airport and assisted them with setting up a bank account and recommending accommodation.
When the business visa expired the contractor was moved onto a work permit sponsored by our local partner. Transferring onto the work permit required the contractor to travel back to India whilst the work permit application was lodged with the local South African embassy. The timing and process for this was agreed well in advance with the recruiter, end customer and contractor to minimize disruption.
Every month the contractor’s only administration was to send in timesheets and expense reports. The Client received a corresponding invoice. Payments were processed to the contractor on the same day they were received by the local partner. Both contractor and client had access to detailed reporting on invoices, payments and expense processing. This included scanned confirmation of payment for the individual tax and social security relating to the contractors employment, as requested by the end customer.
The local partner also provided the contractor with end of financial year and end of assignment statements to use with their tax reporting. Additionally we offered our network of specialist providers who can provide the contractor with assistance in travel & health insurance, processing of personal expenses, professional indemnity / public liability insurance and tax reporting within their home country.
The Client was able to make the sale and by meeting all expectations on the first order they were able to place several more contractors with the same end customer. By using this deal as a reference point they also won several other projects placing foreign contractors in South Africa.
The end customer was able to implement their upgrade within the allocated time and budget. Their HR compliance team was so pleased with the outcome they have added the recruitment agency to their preferred supplier list.
The contractor benefited from great retention on their rate and enjoyed their time in South Africa so much that after this project finished they took another contract in SA. With the blessing of the recruitment agency our local partner continued their sponsorship and management of the contractor for the new assignment.
Products and services our company used
- International tax advice
- Calculation of net earnings
- Business Visa Application and Sponsorship
- Work Permit Application and Sponsorship
- Payment through local payroll
- Calculation, filing and reporting of tax and social security for employer and employee
- Expense Processing
Services provided by other groups or companies
Contractor Taxation used the service of our preferred South African partner who acted as the contractor management company on this project. They sponsored the contractor on a business visa and then a work permit. They also handled the in-country payroll and taxation.