All about the fitness and health lifestyle
All about the fitness and health lifestyle

How to Hire International Contractors

Last Updated:
August 9, 2022
Author:
Kimmy

How to Hire International Contractors

Running a successful business requires having the right employees. Unfortunately, finding local employees to fit the roles you need isn’t always possible. This is why many companies look to hire international contractors or digital nomads to fill positions. Below is everything you should know about hiring an international contractor for your business.

What is an international contractor?

An independent, international contractor will have a different work contract than regular employees. As a contractor, they will not count as an employee by the IRS. With this, the tax obligations are also different from standard employees. The contractor themselves must pay self-employment tax in their country. Thus, businesses hiring them do not need to withhold income taxes or pay social security, medicare, or unemployment tax for the contractor. An international contractor will invoice your business on an agreed schedule, rather than being on the standard payroll system. The business themselves must not have control over the contractor when it comes to how they do the tasks set. Furthermore, a business does not need to pay contractors severance pay.

What to be aware of country-to-country.

Defining the working relationship between a business and a contractor is crucial for legal reasons. In some countries, if a contractor working full-time exclusively for one business may be considered a de-facto employee. However, as long as the contractor supplies their own office and any supplies without reimbursement, this will likely be overruled as a contractor-business relationship.

Some countries will not allow a contractor to sign a non-compete agreement without being classed as an employee for tax and legal reasons. This is due to the agreement showing control over the contractor, which implies they are an employee instead. Each country has its own specific rules, so ensure that you research thoroughly before hiring a contractor.

How to avoid turning a contractor into an employee?

Uses the tips below to ensure you keep contractor status and avoid legal issues with employment tax.

  1. Avoid an exclusive business-contractor relationship.
  2. Do not set daily work hours for contractors
  3. Avoid supervising tasks or having required training for contractors
  4. Do not require task reporting
  5. Allow contractors to supply their own tools and supplies
  6. Do not offer additional employment benefits like a pension plan, insurance, or vacation pay

Where to find international contractors?

It can be overwhelming to hire an international contractor. Below are some details for popular countries and job seeker websites to make the process easier.

UK

An independent contractor in the UK must set their own prices, be able to promote their services and work for other businesses, and delegate work to other people if they wish. The best places to find contractors in the UK are Freelancer.co.uk and Fintalent.

Chile

When you hire international contractors from Chile the process is straightforward as they don’t have strict rules. However, you must ensure that contractor can select their own work hours and do not need to submit task reports. The best place to find contractors is on Indeed Chile, or Buscojobs.

France

Contractors in France must bill the business per project, not hours worked, and be able to work for multiple businesses. Additionally, they can not undergo any training paid for by the business, or be held to the business code of conduct. They must register as self-employed within France to avoid legal repercussions for both your business and themselves. The best place to find French contractors is on Freelancer.com

Colombia

Independent contractors in Colombia must have control over their working hours and be paid monthly through invoices. The best places to find Columbian contractors are on Indeed Colombia, or UpWork.

Germany

In Germany, an independent contractor can work whenever they like, with set deadlines in place, and must be paid per project, not by the hour. They must also have the ability to work for other businesses. To find great contractors, use Freelance.de or  Expertpowerhouse.

When you hire international contractors, ensure that you are following all legal requirements. This includes legal requirements for both your business country and the contractor's country. Ensure you have a contract for any contractor and that you organize the method of payment before the first invoice.

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