Ask IH: How do you hire remote workers abroad, like developers or writers?
Hello everyone, how do you hire remote workers abroad? Meaning that they work from their countries permanently and never come to your country.
So this is not a work visa or anything, I'm talking about full time remote work.
For example, imagine you have a small self-bootstrapped company company in Belgium (my case), and you want to have a few full-time workers in India (developers and content creators for example).
How does that work? Can they just issue you invoices as freelancers in euros and that's it?
Or do they need to have their own company?
What happens if they don't have a company?
Would using an intermediate platform like Upwork help in any way?
I understand no one here is probably a lawyer, and I will take the advice with a grain of salt and confirm with a professional.
But I would love to know about the feedback and personal experience of other entrepreneurs in a similar situation.
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First things first: you really want to have a lawyer & tax person & additionally read up on how labour laws and remote work works in your country. This is not legal advice.
Lots can be written about this topic, but to get you started I see 2 options:
Hire them directly (this is what I do): interview, recruit, hire people as freelancers. During the interview process I make sure to ask if they are registered as freelancers/sole proprietors in their country. If the freelancer is in the EU and already did some remote work he/she will have a VAT ID as a freelancer and will hopefully know how to send a legally correct invoice to you. You get an invoice, you pay it.
Hire via an intermediary (e.g. remote staffing agency, marketplace, etc.).
This is very useful if you are new to this and want to de-risk your first adventures. UpWork comes to mind for a full-service SaaS, https://www.letsdeel.com/ is a good idea if you only want to take care of payroll and legal stuff.
If you are brand new also to freelancers:
Source: German here, with German limited liability company as legal entity & few years of experience working as and with freelancers, all fully remote.
Hello, thank you for sharing. I'm moving from Upwork to hiring directly, but I'm a software developer and struggle with the legal and human resources side.
Regarding " I make sure to ask if they are registered as freelancers/sole proprietors in their country.", does this mean they must have a company on their side?
Do they always invoice you as companies, not private individuals?
Is there some sort of written work contract between you?
Do they work full time for you, can you set their holidays for example?
And regarding the lawyer you contacted, what type of lawyer is it, any lawyer will do?
Thank you for any insight on this, Kind Regards.
Hard to be brief about this, but I'll try.
In most countries I am aware of you need some sort of business license (often a registration with the tax authorities) to be able to commercially and repeatedly charge money for services. Freelancers are technically one-man-companies with very few legal requirements (e.g. only simplified accounting requirements).
VAT is a big topic in this, since it most often must be charged and must be transferred to the tax authorities. If you do not handle VAT correctly you are in effect committing tax fraud, and you really don't want to do that. (I am massively oversimplifying here, please google yourself).
Yes, always as "companies".
Yes. If it is a very short and simple project we agree on something via Zoom, then I send the notes from the call via email ("...as discussed, this is what we agreed one...") which is a very simple contract.
If it is a longer engagement I require a freelance employment contract, including NDA and full IP transfer agreement. Obviously I prefer that my set of lawyer-approved contract templates is used. :)
I only hire freelancers and freelancers set their holidays themselves, but obviously we are planning things like absences and availability together. (Please read up on the different types of employment.)
My main lawyer & go-to guy is a corporate law guy with a focus on tech companies, who also helps with most of my labour law questions. Took me a while to find him :)
From your questions I understand that you are very new to this, therefore please, please talk to a few more people before you take the next steps and don't rely on some anonymous voice on the internet.
I'd suggest e.g. HR at your current or previous company (if not a corporate), startup founders, your local chamber of commerce (very underappreciated ressource), startup accelerators or even freelancers or agencies that work with freelancers.
Again, I am not a lawyer and this is not legal advice, only personal experience.
Hello, thank you that makes sense, I understand it's just personal experience and not legal advice. I need to find a lawyer to confirm all this, and get some proper contract templates.
Regarding VAT between two companies in different countries, it's normally the responsibility of the issuer of the invoice to retain the VAT and pay it, right? Not the payer of the invoice.
Unless the invoice says reverse charged VAT, meaning that it's the payer that takes care of VAT.
If a freelancer with a company issues an invoice from an Indian company to a Belgium company for example, normally it's the freelance responsibility to handle VAT, if the invoice is not reverse charged, right?
Or maybe I'm totally wrong, but this was my understanding of VAT so far. Any insight you have would be very helpful, again thank you for sharing your experience, it helps a lot.
FYI: to jump start your learning journey check https://www.letsdeel.com/global-hiring-guide and https://ec.europa.eu/taxation_customs/vat-invoicing-rules_en
Otherwise, obviously Google is your friend.
$49 per month per contractor? I think I'm going to try out deel then, thank you for the tip. Cheers.