As vaccines continue to be rolled out, and restrictions on travel begin to ease in some countries, overseas contractor careers are becoming a popular option again.
Alongside being able to travel, with the increase in remote working following the pandemic, a new opportunity is presented for consultants to contract for businesses outside of the UK, without always needing to be present on site.
However, when deciding whether to carry out contractor work overseas, there are several things to consider. To begin with, looking at tax and visa requirements will help determine which countries can offer you a reduced start-up cost. These checks are important to do prior to considering contracts, as some countries may not allow applicants to apply for work without having a visa first.
Both outside and within the EU, visas required to work and contract abroad can differ considerably from country to country. Therefore, when deciding which country to work in, it’s recommended to consider taking advice to help you navigate the legal environment.
What are some of the best countries for overseas contracting?
Determining which country is the best one to work in as a contractor can differ depending on your industry. However, resources like the World Economic Forum’s Global Competitiveness Report provide a helpful criterion when looking at suitable countries. This report looks at over 140 countries and ranks them against twelve pillars and several sub criteria in which make up the final score. This then enables individuals to compare each country based on its score in important factors like government legislation, innovation, health and education.
Contracting post Brexit
The end to freedom of movement is one of the most significant impacts of Brexit. As before Brexit, UK contractors/freelancers can’t work freely between the 28 EU member states. There is no uniform approach to the country rules for work-related travel between the U.K. and EU. Therefore, each country will have its own rules and regulations regarding business and travel which will need navigating.
There is also a chance certain professional qualifications may no longer be recognised in the EU. For example, prior to Brexit the UK had an agreement whereby professional qualifications obtained in any EEA country or Switzerland were part of a system which enabled national of these countries to have qualifications recognised throughout these countries. Brexit has meant changes have been made to these regulations. It’s therefore important to check your qualifications are registered in a different country and notifying HRMR of any changes.
Taxes
Working in another country for over six months, will require substantial changes in order to comply with foreign tax and employment rules. Some countries will not enable you to contract as a company legally. In comparison, some require you to register as a contractor in that specific country, meaning you will be obligated to comply with their tax regime.
Deciding to be an overseas contractor is a big decision. It can feel like a total minefield when deciding which country is the best place for you to work, whether that be on a temporary or permanent basis. Our sister company, Procorre Global helps ensure you meet all the legal requirements for overseas contracting and remain compliant 24/7. They can act as an employer of record, and if necessary, ensure the negotiation of relevant arbitration clauses for partners and their international clients, ensuring total protection.
Here is a list of some of the most popular countries for those in the UK wanting to contract abroad.
Germany
Germany is the largest economy in the European Union and the fourth largest in the world after the USA, China, and Japan. The economy is highly innovative and focuses on exports, with a number of well-known international brands including Volkswagen, Mercedes, BMW, Adidas, Siemens, and Deutsche Bank. Germany’s position in the European Union also opens a diverse broad European market for Germany businesses.
For contractors in Germany, there are two types of contracting models. These include:
- Local self-employed “contract model”. This is split into sole trader (Freiberufler)or a limited company GmbH.
- Local in country payroll – in Germany this is the AUG model (Arbeitnehmerüberlassungsgesetz).
Sweden
Alongside it’s rolling hills and extensive coastlines, Sweden is renown as a prime place to do business and work as a contractor. It's the home of IKEA, Volvo and Sportify, to name just a few global businesses who originated from there. Sweden is the sixth most competitive economy in Europe and often ranks as one of the highest-performing economies worldwide. A key benefit for contractors working in Sweden is their labour market, which is held in high regard. It priorities workers’ rights both for permanent and contractual. There are also several unions dedicated to the the rights of workers.
Italy
Alongside its reputation for unrivalled food, art and a fascinating history, Italy is an attractive place to do business. Italy is one of the largest manufacturing countries in Europe, and hosts a highly educated, innovative and talented workforce.
With an established R&D infrastructure and pro-investment culture, the country is perfect for growing businesses. The country spends 25 billion euros per year on research and development. This makes it the fourth highest country to invest in R&D in Europe.
Working as an overseas contractor in Italy is a relatively straightforward process. If you want to work as self-employed or a freelance you need a self-employment visa (work permit). The self-employment visa can take 2 to 4 months to get. It’s valid for up to 2 years and you can extend it. It can lead to permanent residence if you meet the criteria.
USA
America has an incredibly diverse culture and stable economy. With a highly developed and mixed economy, the Conference Board forecasts that US Real GDP growth will rise to 7.0 percent (annualized rate) in Q3 2021.
Despite this, contracting in the country can provide challenges for non-citizens, with several regulations on visa and taxing. To work in the country, contractors will have to be sponsored by the company wanting to use their services. Plus, should you want to visit the country prior to this, it can be done on a 90-day tourist visa. This however doesn’t include the ability to attend interviews or work in any capacity.
The tax system also differs between each state and rates depend on earnings. Therefore, it’s important this is taken into consideration before a decision is made on whether to undertake contracting.
If you would like any advice regarding overseas contracting, request a call back from a member of our team today.
