Central America


Central America is growing in popularity with international contractors and recruiters due to some major projects in Telecommunications, Oil & Gas and IT. We organise business visas, work permits, local payroll and tax compliance for freelancers, recruitment agents and international companies providing services in Central America. Additionally Central America has a fascinating culture, relaxed lifestyle, great food and a wide range of regional travelling options. If you are thinking of doing an expat assignment in Central America – you’ve come to the right place!

Foreign contractors will need support to work in Central America as the Work Permit and Taxation Systems for contracting are quite complex. It is important to use experienced local providers for Immigration, Payroll and Taxation to be sure of compliance and reliability. We have partners that will be able to assist you with: Contractors Tax and Work Visas for Freelancers to ensure that you comply with local regulations and maximize your net income.

Our assessed and qualified suppliers will ensure tax and work permit compliance but also that you’re retaining the highest possible net % return on your gross billing as is legally possible. Our services in Central America include:

  • Tax, Payroll and Employment Solutions for Contractors
  • Sponsored Work Permits and Business Visas for Contract / Freelance Workers
  • Salary Packaging
  • Self-Employed / Personal Companies
  • Immigration Lawyers
  • Expatriate Tax specialists
  • Insurance (Private Health / Travel / Professional Indemnity)
  • Bank Account Opening
  • Insurance (Private Health / Travel / Professional Indemnity)

Recruiter Case Study:

A London based recruitment consultant had located the perfect candidate for his client, the Central America office of a German investment bank. However the candidate was a foreign national who needed a Work Permit. They needed a local entity to sponsor the work permit, run the local payroll and make sure the contractor was fully compliant. A colleague referred the agency to www.contractortaxation.com and our local partner was able to step into the breach to arrange a Central America Business Visa before the end of the week and then process the Central America Work Permit with the consultant already onsite for training. This meant the assignment was able to start on time and recruiter went on to place 3 more consultants into the project.


One of the most consistently challenging aspects of contracting in Central America is complying with the country’s tax system. Whether you’re a contractor or a permanent employee, you have to pay tax on all of your earnings whilst you’re in the country. As well as paying tax in Central America, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge. Do you get double taxation in Central America? It will depend on your nationality and the nature of your assignment in Central America. Getting to grips with the basics of income tax in Central America and understanding your options helps you work out the best way to organise your affairs.

Paying Income Tax in Central America through Your Employer

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

Working Out Income Tax in Central America Yourself

Anybody who can’t pay their tax in Central America through PAYE is left with the prospect of filing a tax return and doing everything themselves. Do you know much about Central American Tax Law? Does Central America have a tax treaty with your home country? You will need to find out or find someone who can help! Not only does this eat into your free time, it’s also exceptionally difficult to get the most out of the system. The rules change frequently, so if you’re new to it you may be working on out-dated research and end up paying too much. Income tax in Central America can range from attractive to amongst the highest in the world so you need to be sure you are placed in the correct tax brackets.

Using an Umbrella Company for Income Tax in Central America

Contractors in Central America are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Central American 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 Central America 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 Central American tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax in Central America

We work with numerous umbrella companies in Central America, many of whom are experts in tax and immigration laws. If you have any questions about tax in Central America, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We also have a comprehensive knowledge of the different services they provide, and we 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 Central America work permit. Our advice is 100 percent free, and it comes with no obligations. You will be paying taxes in Central America but without the overhead of directly dealing with the Central American tax authorities. Get in touch with us today for some reliable advice on tax in Central America!

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Immigration is one of the primary concerns for anybody hoping to start working in Central America. Permanent employees will find it easy to get their Central America work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer. The Central American work permit is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Central America 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 a Central American Umbrella Company?

Umbrella companies in Central America “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 Central America a lot simpler. The fact that they technically become your employer helps you get your working visa in Central America with minimal fuss.

How Can Umbrella Companies Help You Get a Central America Work Permit?

As your permanent employer, umbrella companies are able to sponsor you for your Central America work permit provided they’re on the register of approved sponsors. Many different companies offer this service, because it makes contracting in Central America 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 Central American immigration authorities. They can even deal with the Central American 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 Central America. It depends on your specific Central America visa requirements. Be aware you may have to register for a residence permit in Central America.

Can Umbrella Companies Also Assist You with Central America Taxation?

Some umbrella companies are specialists in the Central American 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 Central America are met.

How We Help You with Contracting in Central America

We work closely with numerous umbrella companies in Central America and we have a thorough knowledge of the different services they provide – especially regarding immigration to Central America. 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 Central American visas or the country’s tax law, and we’ll contact the experts directly to guarantee 100 percent 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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