Independent contracting in Africa isn’t 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 Africa, you should be aware of what you’re getting into – and how you can make it simpler.
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Africa.
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 deeply familiar with the intricacies of the tax system in Africa, 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 Africa and your home country can seem like full-time work in itself.
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies who specialise in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, 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 . Even better, most are experts in and expat tax law, meaning they’ll also help you optimise your earnings in .
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.
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 (which means avoiding fees, fines, or even worse penalties).
There’s a huge variety of Umbrella Companies out there; they all have different specialties and advantages. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Africa and match contractors with the right company for them. If you’ve already secured a contract in Africa, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).