Umbrella Company in Venezuela
Independent contracting in Venezuela 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 Venezuela, you should be aware of what you’re getting into – and how you can make it simpler
Difficulties of Contracting in Venezuela
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Venezuela.
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 Venezuela, 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 Venezuela 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. 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 Venezuela. Even better, most are experts in Venezuela and expat tax law, meaning they’ll also help you optimise your earnings in Venezuela.
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.
Why Use an Umbrella Company in Venezuela
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 Venezuela (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 Venezuela. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Venezuela and match contractors with the right company for them. If you’ve already secured a contract in Venezuela, 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 Venezuela
One of the most consistently challenging aspects of contracting in Venezuela is complying with the country’s tax system. As well as paying tax in Venezuela, 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 Venezuela
If you’re working in Venezuela 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 Venezuela 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 Venezuela, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Venezuela through PAYE is left with the prospect of doing everything themselves.
Do you know much about Venezuelan Tax Law? Does Venezuela have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Venezuela can range from 6 to 34 percent, and you need to be sure you are placed in the correct tax brackets.
Tax Filing in Venezuela
|When Do You Need to Lodge Your Tax Return?||1 January|
|Tax Filing Deadline||31 March|
|Can you file it online?||Yes, http://contribuyente.seniat.gob.ve/iseniatlogin/contribuyente.do|
How to File Taxes in Venezuela
Married couples must file a joint return. The process of filing taxes in Venezuela involves the following steps:
Step 1: Register as a taxpayer via the National Integrated Customs and Tax Administration Service (SENIAT) to attain your RIF number.
Step 2: Register for a username and password to login to the SENIAT portal. To do to this, select RIF as your document type, enter your RIF number and click search. After completing a few security questions, you can create a username and password. Upon completing the registration form, you will receive an email containing your username.
Step 3: Login to the SENIAT portal using your username and password.
Step 4: From the main menu, select Procesos Tributarios (Tax Processes) à Declaración ISLR (Declaration ISLR) à Definitiva (Definitive). Complete a general questionnaire and click continue.
Step 5: Enter the total salaries and wages received during the fiscal year. This includes your ordinary salary/wage and any other remuneration, such as meal allowances, pensions and profit sharing. You are not taxed on any termination benefits.
Step 6: Enter any deductions you may have. Any receipts relating to deductions should be collected. Some key deductions include:
- Education costs
- Insurance payments
- Medical costs
- Work related expenses
Step 7: Select the portions in which you wish to pay your tax. You can pay the full amount of tax when the return is filed or in 3 equal instalments. In the latter case, the first is due when the return is filed, the second within 20 days after filing and the third within 40 days after filing.
A guide for filing taxes is available in Spanish, here.
Tax Figures in Venezuela
|Currency||Venezuelan bolivar (VEF)|
|Tax-free Threshold in Venezuela||None|
|Income Tax Rates|| |
As of 2017, 1 tax unit (TU) is VEF 300.
The above rates apply to residents.
Income for non-residents arising from non-business professional activities is subject to a tax rate of 34% on 90% of gross payments. Salary and income received by non-residents for services performed in Venezuela are subject to a flat rate of 34%.
Tax Residency in Venezuela
When do you become a tax resident in Venezuela
You become a tax resident of Venezuela if you are physically present in Venezuela for more than 183 days in the current or preceding calendar year.
Does the 183 day rule apply in Venezuela
Am I taxed on my global income in Venezuela
Yes, if you are a resident.
Non-residents are taxed on their Venezuelan-sourced income only.
Can you set up your own Limited Company in Venezuela
|How long does it take to set up||230 days|
|How much does it cost||Approximately VEF 220,000 + 1% of initial capital|
|Is it easy?||Starting a Business Rank: 190 (Source: World Bank)|
Tax Calculator in Venezuela
If you are a contractor and want a calculation on your tax and net retention in Venezuela, we can supply it to you free of charge.
Using an Umbrella Company for Income Tax in Venezuela
Contractors in Venezuela are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Venezuelan 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 Venezuelan 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 Venezuelan tax office or tax department directly including processing your tax refund if you are eligible.
How We Can Help You with Tax in Venezuela
We work with numerous umbrella companies in Venezuela, many of whom are experts in tax and immigration laws. If you have any questions about tax in Venezuela, 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 Venezuelan work permit.
Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Venezuela but without the overhead of directly dealing with the Venezuelan tax authorities. Get in touch with us today for some reliable advice on tax in Venezuela!
A Contractor's Guide to Work Permits in Venezuela
Immigration is one of the primary concerns for any contractor hoping to start working in Venezuela. Permanent employees will find it easy to get their Venezuelan work permit because they’ll receive “sponsorship” for their entire stay from their prospective employer.
The Venezuelan work permit, known more commonly as the TR-L (Working Transient Visa), is dependent on this sponsorship because it confirms that you’ll be earning money during your stay in the country. Contracting in Venezuela 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.
How Can Umbrella Companies Help You Get a Work Permit in Venezuela ?
As your permanent employer, umbrella companies are able to sponsor you for your TR-L provided they’re on the register of approved sponsors. Many different companies offer this service, because it makes contracting in Venezuela 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 Venezuelan immigration authorities. They can even deal with the Venezuelan 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 Venezuela. It depends on your specific visa requirements. Be aware you may have to register for a residence permit in Venezuela.