What is the best way to freelance legally in different countries?
Hi guys, I'm a freelance web developer who travels a lot and generally just works through Upwork as it's been set up in my home country. However, I'm not a big fan of the cut they take and was wondering if there are other legitimate ways to pick up new clients and get paid? Firstly, is it illegal to invoice clients in other countries (ie) call yourself a contractor? Is that considered as working illegally?
Obviously, starting a company or something might be an option, but is there an easier way?
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Hi Jack,
I think that the subtle difference when freelancing 'overseas' is where your employer is located, as being employed by an employer from the same country you are visiting may put you into the 'local worker' category, which would then require visas. While working for an employer overseas over the internet while you travel would probably be fine.
The easiest way to bypass the local employer issue would be to register a company (anywhere except the country you are currently in, unless you have legal working rights there). Say your company is in Australia, it invoices your clients around the world, and you then have a simple employment contract with your company.
There may also be tax implications. Currently, if you are not spending more than six months at any one place it may mean you are not a resident for tax purposes anywhere, so you would then nominate the country in which you pay tax. Definitely seek legal and accounting advice on this one, but it could be very good for reducing your tax liabilities. This would not be an option if you register a company and become an employee of that company locally (even if you do the work while travelling), both you and the company would pay taxes locally.
Hope this helps! Enjoy your travels :)
AVB
Thanks @lynnfredricks I recently stumbled upon https://www.hellobonsai.com/ which seems like a really great product for taking care of contracts, invoicing and the like.
The main thing I am concerned with is when I travel to new countries, and pick up clients there, do I need a working visa / freelance visa, or can I just work freely, and invoice from my home country, where I am a sole trader?
Is it more complex than that, and is starting a company the best approach here? Is there a startup / company out there that would allow you to be on their books and essentially you funnel money through it into your home bank account?
Being a traveling worker is a bit more problematic. In general, you can travel to the US on an open tourist visa and conduct the sort of business that isn't actually 'work'. For example, it is very common for business people to visit the USA (or other countries) to go to trade shows and participating in meetings. It is generally understood that this isn't 'work', but is the 'business of work.'
On the other hand, if you travel to the US and participate in your trade at all, then you are considered to be working.
For example, I had a client in Seattle that wanted two developers to fly to Seattle for a meeting and also a bit of coding. He told me about it while the devs were already in the air. I warned him that if they mentioned they were going to do any actual coding when passing through customs, that they'd be in trouble. Sure enough, they were busted and were sent back to the UK on the next flight.
There was also another case recently in which Hasbro invited some European artists to the US for a meeting, and failed to coach the artists on dealing with customs. They were asked "during these meetings, will you be doing any sketches or artwork?" And of course, they said yes. They were on the next flight back.
I suspect that you could run into this sort of trouble if you were going there with the prospect of staying on a tourist visa and drumming up business in general and remaining in the country while working for clients there, then you'd have a problem. Most likely you'd be considered 'working' under the laws of the country, because you are physically present.
Oh wow, crazy stories, thanks for sharing. That's such a shame! No, well while I travel I tend to use Upwork as that's all set up in Australia with my tax details and so when I get paid, I'm essentially getting paid by Upwork. I can meet people and invite them onto Upwork and we can do business from there. But the main issue is that Upwork and Freelancer.com take such large cuts for small jobs under $500-$1000.
It would be great if there was a simpler way to get paid legally without a third party taking such a big cut.
What amounts to being a contractor will primarily depend on how it is defined under the laws of your country. Working with clients in other countries can be a challenge without really knowing anything about them.
You might want to have a basic contract for work that you are happy with, that spells out terms, jurisdiction and transfer of IP. That way, if you get stiffed, you at least can still own your own code.
I have had loads of international clients through my company Proactive International, but the sort of agreements I sign with them are more likely to be long term rather than a short one off on a project. So you should weigh the amount of work there is in 'working with you' against the sort of work you anticipate doing for them.
You should by all means assume that the responsibility is yours for reporting purposes.