5 Things to consider when placing contractors internationally:

1: Obtaining specialist advice on the country that you are wishing to place the worker:

Every country has its own laws on residency and tax, so it’s recommended that you seek the advice of a specialist in the relevant country. There are many Umbrella companies that offer such specialist advice and tailored payroll services for individual countries.

2: Debt recovery can be hugely expensive:

If possible, get YOUR clients to sign your contract, rather than you sign theirs. That way you’re creating a UK-based contract, with UK terms and conditions. To enforce any contract overseas will be challenging so this is a serious consideration when deciding to expand internationally.

In addition, due to the heightened risk mentioned above ensure that you know your client and that they above all have a decent credit score. Never work without debt insurance and ultimately reduce risk by working with reputable larger organisations when working overseas.

3: Check that your insurance covers the jurisdiction that you are operating:

Your standard Professional Indemnity policy often has exemptions for the USA and Canada. This is due to the high level of claims that are made in these countries, it is possible to obtain PI but at a much higher premium. Our insurance partner Sutton Winson will be able to advise on this.

4: Currency fluctuations:

Can work in favor or against you,  Sterling can and has this year moved 5% within a two month period, so this can easily have a significant impact upon your margin. One way to help is to set up a bank account in the currency that you are most likely to work in and use this as working capital.

5: VAT:

If you’re placing a UK contractor internationally and they’re trading through their own Limited Company, the first thing you need to find out is whether their Limited Company is VAT registered. When invoicing an international client, it’s highly likely they won’t recognise VAT and therefore the contractor will be due VAT, however the client won’t be paying it. This leaves you, the agency, at a 20% deficit until you submit your quarterly VAT return to HMRC and receive a refund.