Umbrella Company in Afghanistan

Independent contracting in Afghanistan 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 Afghanistan, you should be aware of what you’re getting into – and how you can make it simpler.

Difficulties of Contracting in Afghanistan

Generally, you need to have an employer sponsor to secure the appropriate work permit and work visa for Afghanistan.

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 Afghanistan, 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 Afghanistan 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 Afghanistan. Even better, most are experts in Afghanistan and ex-pat tax law, meaning they’ll also help you optimise your earnings in Afghanistan.

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, and 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 Afghanistan

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 Afghanistan (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 Afghanistan. How do you find the right one for your circumstances?

We work closely with Umbrella Companies throughout Afghanistan and match contractors with the right company for them. If you’ve already secured a contract in Afghanistan, 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 Afghanistan

One of the most consistently challenging aspects of contracting in Afghanistan is complying with the country’s tax system. As well as paying tax in Afghanistan, 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 Afghanistan?

If you’re working in Afghanistan 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 AFN 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 Afghanistan, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Afghanistan through PAYE is left with the prospect of doing everything themselves.

Do you know much about Afghan Tax Law? Does Afghanistan have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Afghanistan can range from 0 to 20% per cent, and you need to be sure you are placed in the correct tax brackets.


Tax Filing in Afghanistan

When Do You Need to Lodge Your Tax Return? Before 20 March of the following calendar year
Tax Filing Deadline Any income tax payable must be paid when the return is filed. The deadline for taxpayers subject to fixed tax is the 15th day of the month following the end of each quarter.
Can you file it online? No

Tax Figures in Afghanistan

Currency Afghan afghani (AFN)
Tax-free Threshold in Afghanistan AFN60,000
Income Tax Rates
Grossed Income Tax Rate (%)
0-60,000 0%
>60,000-150,000 2%
>150,000-1,200,000 10% + AFN1800
>1,200,000 20% + AFN106,800

Tax Calculator in Afghanistan

If you are a contractor and want a calculation on your tax and net retention in Afghanistan, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax in Afghanistan

Contractors in Afghanistan are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. An Afghan umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Afghan taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Afghan tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax in Afghanistan

We work with numerous umbrella companies in Afghanistan, many of whom are experts in tax and immigration laws. If you have any questions about tax in Afghanistan, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Afghani work permits.

Our advice is 100 per cent free and comes with no obligations. You will be paying taxes in AFN but without the overhead of directly dealing with the Afghani tax authorities. Get in touch with us today for some reliable advice on tax in Afghanistan!

A Contractor’s Guide to Work Permits in Afghanistan

Immigration is one of the primary concerns for anybody hoping to start working in Afghanistan. Permanent employees will find it easy to get their Afghanistan work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer. The Afghan work permit is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Afghanistan is more difficult because the work permit is tied to one employer, so you have to change it to suit each new contract. Thankfully, umbrella companies provide a convenient and effective solution to this issue.

What is an Afghan Umbrella Company?

Umbrella companies in Afghanistan “employ” contractors, but don’t make any decisions about your workload, clients or anything to do with your day to day operation. They simply process your payments by billing and collecting money from your clients, calculating your taxes and sending you a net wage. This is equivalent to the PAYE (pay as you earn) system employed by many companies, and it makes handling your tax in Afghanistan a lot simpler. The fact that they technically become your employer helps you get your working visa in Afghanistan with minimal fuss.

How Can Umbrella Companies Help You Get an Afghanistan Work Permit?

As your permanent employer, umbrella companies can sponsor you for your Afghanistan work permit provided they’re on the register of approved sponsors. Many different companies offer this service because it makes contracting in Afghanistan infinitely simpler and saves you the hassle of continuous paperwork. Instead of changing your work permit every time you get a new contract, you can just work how you ordinarily would under the same permit. They protect you from the bureaucratic “rain” of legal compliance with the Afghan immigration authorities. They can even deal with the Afghan Embassy directly.

Through their service, you may be able to use a business visa to get started quickly and then transition to a work visa in Afghanistan. It depends on your specific Afghanistan visa requirements. Be aware you may have to register for a residence permit in Afghanistan.

Can Umbrella Companies Also Assist You with Afghanistan Taxation?

Some umbrella companies are specialists in the Afghan tax system. They constantly stay up to date with the legislation and ensure that you get to keep the biggest proportion of your earnings possible. The PAYE system is ideal for most workers because you don’t have to complete any paperwork (aside from submitting your timesheets to the umbrella company) or worry about your taxes in any way (you’ll receive documentation for your records, though). You have a team of experts ensuring that you’re paid promptly and the various requirements for tax in Afghanistan are met.

How We Help You with Contracting in Afghanistan

We work closely with numerous umbrella companies in Afghanistan and we have a thorough knowledge of the different services they provide – especially regarding immigration to Afghanistan. If you’re a business analyst, IT project manager, software developer, tester, telecommunications contractor or an oil and gas worker, we can help you get sponsorship for your work permit and keep more of your earnings by setting you up with an umbrella company. We’ll also answer any questions you have about Afghan visas or the country’s tax law, and we’ll contact the experts directly to guarantee 100 per cent accurate advice. This all comes at no charge whatsoever to you and you’re not obligated to take on the services of any company. We’re just here to make your move as stress-free as possible.

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