Growing a business is always challenging. You have a lot of things to juggle, including understanding your customers, staying on top of market changes, and delivering excellent customer service. Great employees make a huge difference in helping your business scale, but you also need to keep down the costs of a large workforce.
One popular way to help your business grow while cutting expenses is to outsource work to international contractors.
Whatever your reasoning, working with international contractors can be a great way to build your business and employ the best talent anywhere in the world.
But before you jump in, you need to be informed. Every country has its own laws around taxation, working conditions, and compensation for outsourced workers, and you need to comply with them.
Every country has laws that define whether your worker is an employee who’s entitled to certain benefits and working conditions, or a contractor who’s essentially self-employed.
It’s important to check what the definition is of a “contractor” in the country where you want to hire workers, and make sure that you respect it. If the country thinks your worker is an employee, then you might have to pay them back for unpaid compensation and other missed benefits.
If your worker is a contractor and not an employee, it makes a difference to:
Generally, this means the payer has a say in what work is done, but not in when, where, or how the work is completed. A contractor can work for more than one payer at the same time without consulting the payer, and they can accept or refuse work whenever and however they like.
If the work they do is controlled by the payer, the worker is usually considered as an employee. Someone who can’t work for more than one payer at the same time, or without permission from the payer, is also considered an employee.
If you’re unsure if your workers are contractors or employees, here are some more ways to tell the difference:
Here are some ways to make sure your workers are contractors and not employees:
Some countries require you to make a written contract with an independent contractor, while others do not. But when it comes to deciding if the worker is an employee or a contractor, authorities will look more at your actual relationship than at anything written in a contract.
Although this might seem overwhelming, it can actually be very easy to work with an independent contractor in a different country. Sometimes it’s even smoother than hiring an employee in the same town! There are many companies that help simplify the process of finding, hiring, and managing overseas contractors, or you can handle it all yourself once you’ve read up on the requirements.
Here is a deep dive of information about the top 20 countries for international contractors.
In Brazil, the best way to find contractors is through Brybe, XPat Jobs, Indeed Brazil, CareerJet, Craigslist, Upwork, or other freelancer sites.
In Brazil, a contractor is someone who:
Out of those 3 conditions, the most important one is the last one.
Brazil doesn’t have any specific requirements for your relationship with an independent contractor. You’re free to agree on any types of compensation or benefits.
You can terminate your agreement with an independent contractor whenever you like, but you have to give minimum notice of:
Brazil law also requires the contracting party (that means you) to:
You can learn more here about the regulatory framework around hiring an independent contractor in Brazil, or talk to a local legal expert.
In Chile, the best way to find contractors is through Indeed Chile, Laborum.cl, Chile Trabajos, and Buscojobs.
In Chile, independent contractors are called independent workers, as opposed to employees who are called dependent workers. Like elsewhere in Latin America, independent contractors are workers who don’t have fixed work hours or reporting obligations, and aren’t controlled by the payer.
In Chile, you don’t have any obligations to provide benefits to independent contractors. It’s up to you and your worker to agree on the compensation, and you can terminate your working relationship with them at any time.
Chilean independent contractors are responsible for all their tax and social security payments.
You can learn more here about the regulatory framework around hiring an independent contractor in Chile, or talk to a local legal expert.
In Colombia, the best way to find contractors is through Workana Colombia, Computrabajo, XPat Jobs, Indeed Colombia, Upwork, or other freelancer sites.
In Colombia, an independent contractor is someone who:
In Colombia, the contractor can work for you as long as you like, do any type of work, and you can pay their expenses — they’ll still be considered independent contractors.
In Colombia, you don’t have any obligations to provide benefits to independent contractors. It’s up to you and your worker to agree on the compensation, and you can terminate your working relationship with them at any time.
Colombian independent contractors have to pay their own local taxes and social security contributions.
You can learn more here about the regulatory framework around hiring an independent contractor in Colombia, or talk to a local legal expert.
In Peru, the best way to find contractors is through Empleos Peru, Xpat Jobs Peru, Frilea Peru, Indeed Peru, CompuTrabajo Perú, Laborum Peru, or international freelancer sites.
In Peru, an independent contractor is someone who:
You don’t have any obligations to provide benefits to independent contractors. It’s up to you and your worker to agree on the compensation, and you can terminate your working relationship with them at any time.
In Peru, independent contractors have to pay their own local taxes and social security contributions.
You can learn more here about the regulatory framework around hiring an independent contractor in Peru, or talk to a local legal expert.
In Serbia, the best way to find contractors is through Upwork, Guru, Freelance.hr, DesignCrowd, PeoplePerHour, and other freelancer sites.
To make sure that your workers in Serbia are independent contractors, you should sign a contract with them that makes it clear that the payments you make are not a salary, that you aren’t providing them with any benefits like vacation time, and that there are no fixed working hours.
Your workers are more likely to be considered independent contractors if they:
If you’re not sure if your workers in Serbia would be considered independent contractors, it’s a good idea to consult a local legal expert.
In Serbia, independent contractors have basic employment rights, but no minimum benefits rights like paid vacation time or pension contributions. Serbian contractors are entitled to paid maternity and childcare leave, although it’s a lower amount than for employees.
A service agreement can be terminated at any time and without any cause, but it’s standard to agree on a 1 month notice period. In Serbia, you’re also allowed to require independent contractors to sign a non-compete agreement for after they stop working for you.
According to Serbian law, you have to withhold salary tax of 10% and social security contributions of 37.8% from your payments to an independent contractor, and pay them to the government. You don’t have to pay any other taxes.
You can learn more here about the regulatory framework around hiring an independent contractor in Serbia, or talk to a local legal expert.
In Poland, the best way to find contractors is through Upwork, Guru, Freelancer.pl, Designer.pl, and other freelancer sites.
In Poland, an independent contractor is someone who is free to set their own working hours, choose where and how they work, and usually does not have a long period of continuous employment. You can ask an independent contractor to carry out any kind of work-related tasks, including core business activities.
Polish law doesn’t set any specific rights for independent contractors, so they are not entitled to minimum wage, paid vacation time, or time off at weekends or for public holidays. You can also terminate the agreement whenever you like and without having to give a cause.
Your independent contractors have to pay their own social security contributions, but you have to withhold income tax on their compensation and pay it to the government.
You can learn more here about the regulatory framework around hiring an independent contractor in Poland, or talk to a local legal expert.
In Romania, the best way to find contractors is through Caut Expert, Freelancerit.ro, LiberProfi, Freelancer.co.ro, Upwork, and other freelancer sites.
In Romania, an independent contractor meets at least 4 of these conditions:
Independent contractors in Romania aren’t entitled to any employment benefits, such as minimum wage, not working at weekends or on public holidays, overtime payments, etc. However, they are entitled to paid parental leave.
They also have to pay their own social security contributions, pension contributions, and tax obligations.
You can learn more here about the regulatory framework around hiring an independent contractor in Romania, or talk to a local legal expert.
In the UK, the best way to find contractors is through Freelance Heroes, Hoxby, Fintalent, Freelancer.co.uk, Itarmi, Kolabtree, Worksome.co.uk, and other freelancer sites.
In the UK, the differences between a contractor and an employee aren’t always very clear. To be a contractor, your worker should:
Sometimes, UK law considers someone an employee in terms of their tax obligations, but an independent contractor in terms of employment benefits like paid vacation time. It’s a good idea to talk with a local legal expert before hiring an independent contractor in the UK.
As long as your worker is considered an independent contractor, you don’t have to pay contributions to their social security or pension, you don’t have to withhold pay to cover taxes, and you don’t have to provide any employment benefits like minimum wage, paid vacation or sick leave, or statutory rest breaks.
You can also terminate their employment at any time, as long as it’s not for reasons that might be considered discriminatory.
You can learn more here about the regulatory framework around hiring an independent contractor in the UK, or talk to a local legal expert.
Spain
In Spain, the best way to find contractors is through Malt.es, SoyFreelancer, Twago.es, Freelancer.es, LanceTalent, and other freelancer sites.
In Spain, a contractor is:
Spain also has a special category of “economically dependent contractor”, called TRADE, who has certain benefits even though they are not employees. A TRADE contractor is someone who dedicates more than 75% of their work time to one client.
Independent contractors in Spain have to pay their own taxes, social security, and pension contributions. They don’t have termination rights, so you can end the work relationship at any time.
But for TRADE contractors, you have to demonstrate that there’s a reason why you are terminating their contract. They also get 18 days of paid vacation leave per year, severance pay, and some other benefits.
You can learn more here about the regulatory framework around hiring an independent contractor in Spain, or talk to a local legal expert.
In France, the best way to find contractors is through Freelance.com, Malt.fr, Beager, MySherpa, JeSuisNumerique, and other freelancer sites.
France is very protective towards workers’ rights, so it defines an independent contractor quite narrowly. You need to meet all these conditions:
You also need to make sure that they register as self-employed independent contractors. You could be held liable if they aren’t registered.
If you want to hire people in France to work as an independent contractor, you’ll have to be very careful that they work independently and you don’t have any kind of control over their work. It’s a good idea to check with a local expert to make sure you’ve understood the local rules.
As long as your worker is recognized as an independent contractor and not any type of employee, you don’t have to make any employer contributions for social security, insurance, pension, or taxes. Independent contractors don’t receive severance pay, although they are entitled to a notice period before termination, according to what you agreed in your contract.
You can learn more here about the regulatory framework around hiring an independent contractor in France, or talk to a local legal expert.
In Germany, the best way to find contractors is through Freelance.de, Malt.de, Platri IT, Dasauge, Twago.de, Expertpowerhouse, and other freelancer sites.
In Germany, your workers are more likely to be considered independent contractors if they:
One thing to note about Germany is that you’re allowed to use independent contractors for any kind of work, including work that’s part of your core business activities.
In Germany, independent contractors don’t have any employment benefits like paid holiday leave or sick leave, they don’t receive any statutory benefits, and you don’t have to withhold pay for tax purposes or contribute to their social security or pension payments.
You can terminate your contract with German independent contractors whenever you like and for any reason, but generally there’ll be a notice period agreed in the contract.
You can learn more here about the regulatory framework around hiring an independent contractor in Germany, or talk to a local legal expert.
In Sweden, the best way to find contractors is through Gigstr, Creators.se, Okelii, Freelancer.se, or other freelancer sites.
There isn’t a single definition of “independent contractor” in Sweden. Instead, the authorities will decide based on the way that you work together. Signs that your worker is an independent contractor include:
In Sweden, you can use independent contractors for any kind of work, including core business activities.
Independent contractors in Sweden don’t get any employment benefits like paid sick leave or vacation time, and they don’t have any protections from termination.
However, you may have to make social security contributions and withhold tax from their pay, even if they are not considered employees. Only people who have F tax status, which means they are registered as a consultant and have their own company, are responsible for all their own tax payments and social security contributions.
You can learn more here about the regulatory framework around hiring an independent contractor in Sweden, or talk to a local legal expert.
In India, the best way to find contractors is through Toptal, Freelance India, Upwork, Flexc Work, Indeed, ClickIndia, and WorkIndia.
India refers to employees as having a “contract of service” and independent contractors as having a “contract for service.” The main definitions of an independent contractor are:
You should make sure that you don’t treat independent contractors the same as employees, like by requiring them to follow the same code of conduct or giving them the same benefits.
You don’t have to give independent contractors in India any benefits, including minimum wage, paid vacation or sick leave, etc. You can terminate the contract without any notice and without cause.
When you work with independent contractors in India, you will have to calculate and withhold all the relevant taxes from their remuneration before you pay them.
You can learn more here about the regulatory framework around hiring an independent contractor in India, or talk to a local legal expert.
In Bangladesh, the best way to find contractors is through Belancer, Shadhin kaj, Upwork, PeoplePerHour, Toptal, and other freelancer sites.
Bangladesh has 8 different types of workers, but all of them are considered employees in some form or other. It doesn’t have a category of independent contractor.
If you hire workers in Bangladesh, they are entitled to a certain number of paid vacation and sick leave days each year, time off for public holidays, workplace health and safety standards, termination protection, and other employee benefits.
You can learn more here about the regulatory framework around hiring an independent contractor in Bangladesh, or talk to a local legal expert.
In Malaysia, the best way to find contractors is through Favser, MauKerja, Freelancer Malaysia, Troopers Malaysia, Cari Kerja Malaysia, TribeHired, Upwork, and other freelancer sites.
In Malaysia, an employee has a contract of service, while an independent contractor has a contract for service. If it’s not clear whether someone is an employee or an independent contractor, the court in Malaysia will check if your worker:
If all those things apply, they will probably be considered an independent contractor.
If someone:
In Malaysia, you don’t have any obligations to provide benefits to independent contractors. It’s up to you and your worker to agree on the compensation, and you can terminate your working relationship with them at any time.
You can learn more here about the regulatory framework around hiring an independent contractor in Malaysia, or talk to a local legal expert.
Once you’ve found local independent contractors to hire, you’ll want a convenient and affordable way to pay them. With Payoneer, you can pay independent contractors in 190+ countries around the world in their local currency, which makes it far easier and more convenient for the contractor to access their funds.
Payoneer’s fast, secure, and low-cost online payments solution allows you to send payments using your credit card or ACH bank debit transfers, which means you can skip the hassle of pre-funding your account. You can even save time and use batch payments to pay dozens of contractors simultaneously, or automate recurring payments so you’ll never be late with payday.
Payoneer has a competitive foreign currency exchange rate and attractive fees, like just 1% for ACH bank debit transfers and 3% for credit card payments. What’s more, if you already have funds in your Payoneer account, such as a payment from your own clients, you can use that balance to pay your contractors free of charge.
[1] According to eligibility and current Payoneer offering