The opportunities to enter the global talent market continue to grow, as companies realize that they can look for workers in other countries. But instead of going the traditional route and hiring an employee, they might opt for an independent contractor to fill a role.
If you are thinking about marketing your skills to clients abroad, then you will want to thoroughly prepare for your independent contracting journey. It is easy to dream about international contracting, but due to the fact you will be working in a foreign country, it does require some planning and effort. This article will describe the steps to take as a first-time independent contractor, and how to find the best resources to assist you.
What is international contracting?
International contracting is how highly skilled professionals offer their services to clients in other countries. Contracts may be as short as a few months or could last for years. A contractor works like any other, but the relationship with the client can vary.
You can be self-employed, work through your limited company, or even be a formal employee of your client. The key point is that you will be entering the country for the sole purpose of filling a position with skills that might be in demand. In time, you could end up working in multiple countries as new positions arise, and find yourself gaining an international list of clients and references.
Why should you try out international contracting?
Many independent contractors develop their skills as employees in their home country, but then realize there can be advantages to offering services to foreign clients. Some of those might be high pay rates and low cost of living like in India, the opportunity to live abroad, or higher demand for their skills than in their own country. It can be an exciting decision to try independent contracting in a foreign country, and you might plan for many months before leaping.
Steps to prepare for international contracting
Beginning as an international contractor takes some preparation unless you are one of those rare individuals who can just show up in a country and find a client. For most, you will want to do your homework and have everything set up before you step on a plane. Here are the 5 essential steps to prepare:
Research your desired location/industry
Your skills may be in higher demand in some locations, where certain industries are emphasized. Examples include engineers in South Africa, oil and gas workers in Norway or IT specialists in Singapore. You will also want to know the costs and standard of living before you commit, and you may even select a country due to its appeal, climate or culture.
Once you have narrowed it down to a country or region, you will start your job search. You can do that independently via job search websites or through a recruitment agency. Recruiters can be helpful but will charge you a percentage of your client fees. It is also possible to target a single company if you believe you have the right skill set or have a contact to refer you.
Secure a work permit
Many countries like Saudi Arabia, Mexico and the UAE require you to obtain your work permit from outside the country. So, you can’t just show up on a tourist visa and process the permit in-country. You will usually need a sponsor for the permit unless the country has a self-employment visa like Spain. Your sponsor will be your client or an umbrella company that is helping you, and they will process your application and get approval before you arrive.
It’s a good idea to arrange as much of the moving and logistics ahead of time so that you can focus on work when you arrive. You will want to think about accommodation, schools for children, transport and mail forwarding. Some contractors may maintain a residence in their home country while they try out contracting. One idea is to rent a place in the country for one month through a company like Airbnb, and then look for a longer-term rental at your leisure.
Decide how you will get paid
You will want to work out with your client how you will get paid once you begin. This should all be spelt out in a contract, with rates of pay, position, term and expectations. If you are a freelancer, you will invoice them and set up a payment method, or work through your own limited company. You can also work through an umbrella company that will facilitate your payments. Because of work visa rules and the difficulty of obtaining self-employment status, many contractors end up as employees of their clients on their payroll.
How Contractor Taxation can help you as you prepare for international contracting
Once you have decided on a single country for your job search, or have client interest, you can contact an umbrella company to assist. For first-time contractors, an umbrella company can be a real asset when dealing with a new client in a foreign country.
The umbrella company can answer all your questions about work permits, taxes and client billing, as they are well-familiar with the local regulations and business practices. This can begin before you leave home so that you arrive with an ally to turn to at every stage. Contractor Taxation has a global network of umbrella companies that are ready to make your foreign contracting experience a success,
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.