Working Under a Contract with Foreign Freelancers
Today businesses are increasingly turning to freelance services from all over the world, and that has some solid reasons behind it. The partnership has several advantages such as unlimited choice of contractors, savings on office space, etc. When working with international contractors, signing a freelance contract is a necessary measure to avoid legal issues. It is a service agreement contract that makes work easier for both freelancers and customers by making work compliant with local labor laws.
This article discusses why contracts with freelancers are absolutely necessary and what subtleties need your attention.
This article discusses why contracts with freelancers are absolutely necessary and what subtleties need your attention.
General Requirements
From the contractor’s viewpoint, they can become self-employed and pay necessary tax on their own. To work openly and legally, a freelancer needs to deep-dive into laws regulating their work and acquire necessary permits and statuses.
A freelance agreement serves as protection for both the contractor and the client and as a guarantee that they will receive money and completed projects respectively. The appropriate format is a service agreement. When drafting the document, you need to check if it agrees with your freelancer’s local labor regulations.
When working with a freelancer under a service agreement, the customer is not subject to traditional payroll costs, i.e. additional payments that employers normally make for their employees such as social insurance and medicare. The freelancer will do it themselves in their home country. To declare income earned through working with you, a contractor needs to:
In some countries the law requires the foreign worker to reside in the same country as their client or employer. If it is not the case and the authorities get to know about it, then there appears a serious threat of fines or even suspension of operations. If the foreign worker is in the same place as their company, then the employer needs to notify the migration agency.
A freelance agreement serves as protection for both the contractor and the client and as a guarantee that they will receive money and completed projects respectively. The appropriate format is a service agreement. When drafting the document, you need to check if it agrees with your freelancer’s local labor regulations.
When working with a freelancer under a service agreement, the customer is not subject to traditional payroll costs, i.e. additional payments that employers normally make for their employees such as social insurance and medicare. The freelancer will do it themselves in their home country. To declare income earned through working with you, a contractor needs to:
- request a handover certificate signed after the project has been complete
- receive payment
- send a receipt to the customer
In some countries the law requires the foreign worker to reside in the same country as their client or employer. If it is not the case and the authorities get to know about it, then there appears a serious threat of fines or even suspension of operations. If the foreign worker is in the same place as their company, then the employer needs to notify the migration agency.
Documentation and payment
An important aspect of partnering up with a foreign freelancer is sending payment and exchanging documents with them. Performing money transfers and document exchange may be problematic and painstakingly slow. Sending money in paper is expensive, while electronic document flow is difficult and not widely used. As for payment, contractors may experience problems with withdrawing money. So, you need to find a secure and reliable payment tool prior to starting work with a contractor.
Conclusion
Signing a contract with a foreign freelancer is effective budget-wise for business. The apparent red tape is not a reason to give up on the idea. You can work with remote professionals from all over the world, and the freelance marketplace EasyBusy can help you find the right contractor, pay and send documents to them.
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