If you have decided to seek work in the Americas, you may wonder which is the best country to find clients and live abroad. One factor may be language as English dominates in North America, and Spanish or Portuguese are spoken in South America. If you are a native to the Americas you won’t be far from home in any country, with no significant time zone differences. Others from Asia or Europe may have to deal with 8-12 hour time differences to stay in touch.
Aside from these broader practical concerns, you may be drawn to one or country for its culture, climate, cuisine or natural beauty. These are valid personal reasons to consider when evaluating a client offer. You will also think about the quality of work-life, retained earnings, immigration compliance and tax rates, to arrive at a decision.
How do you decide on the best countries to work in the Americas?
Ultimately, it may be a blend of factors that lead you to choose one country over another, or simply where you find a willing client. There are economic disparities as in many global regions, and although a country may have low average wages, the cost of living should also be low.
You will want to have some method of evaluating a country based on multiple factors, and here are some suggested criteria:
Industries/ Demand for contractors
Specific industries related to your skills, and overall accepted use of contractors.
Hiring contractors is on the increase, but so is government oversight to prevent disguised employment.
Ease of obtaining work permits, criteria and duration.
Most countries require a sponsor for work permits, such as your client or umbrella company. A few do have self-employment visas available.
The overall health of the economy and demand for skilled workers.
You want to work in a country where the economy is fairly stable, including currency rates and worker demand.
Rates of pay
Estimated range of pay rates for your profession and industry.
Some client rates will be ‘localized’ while others may pay you the same as in your home country, either higher or lower.
Income tax and earnings retention
Tax rates and social contributions will affect earnings retention.
Self-employment tax rates are usually the same as for employees. But you might have higher social contributions such as in the US where you pay both employee/employer share.
Quality of life
The cultural, political and community environment for ex-pats.
The experience of working as an ex-pat does depend on country factors and risks beyond your control, so it bears researching.
Cost of living
Cost of rent, food, transportation, healthcare and entertainment.
The living cost will have a direct effect on retained earnings and should be reflected in your pay rates.
Familiarity or appeal of the culture, and any language barriers in daily life.
Culture shock can be a real issue for ex-pats, so consider your ability to adapt to a country that is quite different from your own.
Ease of contracting/self-employment and clarity of regulations.
Some countries will be fairly strict with compliance for contractors, so you should be prepared to show that you are an independent business.
Examples of specific countries
This is a subjective list but does take into account the size and scope of the economy, tax breaks, breadth of industries and quality of life. Here are some of the best countries to work in the Americas as a contractor.
Canada has a developed economy with opportunities across many industries, and it is a good destination for English speakers. Pay rates are relatively high, but you have to be careful about misclassification. The Canada Revenue Agency has defined criteria for independent contractors and is aware that companies avoid payment of social contributions by hiring contractors. The work permit process is easier than in the US, so that may be a factor when looking for clients in North America.
Brazil is on the other end of the spectrum from Canada in terms of climate, culture and language. But self-employment is common, and there are three different structures for contractors to use: self-employed, sole proprietor and micro-entrepreneur. Each has its registration and legal requirements. Misclassification is also taken seriously in Brazil, with hefty fines for employers.
Chile is well-known for being a good place for doing business, and you may find clients that need your skills. Contractors must register as a business (Empresario Individual), and you will need to pay VAT in addition to income tax. It is possible to obtain a work permit as a self-employed if you can show a work contract. New immigration rules have made it possible to switch clients while you are on the same Temporary Resident Visa.
Self-employment is growing in Mexico, and the government has initiatives to support independent work for its citizens. This trend may favour international contractors as well, but you still have to obtain a work permit. This can be through your client or an umbrella company. Keep in mind that recently Mexico has begun limiting the duration of tourist visas to discourage foreigners from working illegally in the country.
Colombia is one of the fastest-growing economies in South America, with a focus on the tech sector. Spanish is a must as English is not widely spoken, and you will have to register either as a self-employed or business entity. Like many developing economies, your client will have to show that the position cant is filled by a local. But if you have unique skills or experience you may be able to qualify for a work permit.
The US may be one of the more popular destinations for international workers, and there is demand, especially in the tech sector. However, the rigid visa laws will make it more difficult, even if you are willing to work as an employee. The H1B visa program has an annual quota and lottery and obtaining a visa as a company will have even tougher standards. H1-B visa employees are often treated like contractors and it’s not uncommon to be ‘benched’ without pay at times. Still, rates of pay are high, and workers often manage the cost of living by sharing rentals.
How can Contractor Taxation help you with international contracting?
Contractor Taxation has a network of umbrella companies across the Americas that are ready to help you with client payments, tax withholding and compliance. Because each country is different, the local umbrella company will know exactly how to assist you with your contracts and availing of various tax and self-employment programs.
Other benefits of umbrella companies include:
- Manages all client payments, tax withholding and any social contributions
- Issues you a payslip each month, to a local or foreign account
- Sponsors work permits
- Helps set up the contract with the client
- Moderates any disputes with your client
- Advises on access to totalization and double taxation treaties
If you have questions about how an umbrella company can help you as an international contractor, please contact us at Contractor Taxation.