Do UK independent professionals need to worry about IR35 when contracting abroad?
The short answer to this question is: yes, even when contracting in another country, the IR35 legislation may still affect you as an independent professional from the UK.
The fact remains that as long as you remain liable for the payment of tax in the UK, than you may be subject to an IR35 reassessment of whether you were a genuine contractor of a given foreign company, or instead one of its employees.
Only after a full year abroad will you finally cease to be tax-liable on earned income in the UK.
Be mindful of your tax obligations while overseas
Once you are no longer liable to pay tax in the UK, you won’t need to concern yourself with IR35. However, you will need to be well-versed in the rules that apply in the country you are now working in – not least because while some foreign countries have quite favorable tax regimes for contractors, you may be subject to harsh conditions in others.
Indeed, the same general principles need to be borne in mind when you are assessing your likely tax liability in a country outside the UK. Was a given contract project-based, for instance? Was there mutuality of obligation, meaning you had to turn up and do as you were asked to do by the end-client? Were you operating your own business? Did the end-client also give you work under all circumstances?
IR35 can follow you even into another country
If Her Majesty’s Revenue and Customs (HMRC) wishes to prove that you come under the terms of IR35, it will follow the same procedure as it would if you were based in the UK.
This means it will seek to obtain a copy of what is known as the ‘upper’ contract – the contract between the end-client and the agency you worked for – and compare it to the ‘lower’ contract, which is the contract you had with the agency.
If the upper contract closely resembles an employment contract, you can expect an IR35 investigation to begin in earnest.
Whether HMRC can easily obtain such contracts – given that it has no jurisdiction outside the UK – is a different matter, especially given that different countries’ tax authorities don’t tend to be greatly cooperative with each other.
However, you shouldn’t depend on HMRC encountering such difficulties as a form of ‘protection’ against IR35 investigation. If HMRC does secure the documents it seeks, you could have problems, so it’s best to ensure your contracts abroad address the IR35 issue as effectively as your UK contracts would.
You will no longer have to pay taxes on earned income in the UK once you have been working abroad for a full year. Nonetheless, from this point you will be subject to the tax laws in the country where you are now living and working.
Why not consult the Global Link Management team today for advice and guidance in relation to your efforts to ensure international tax compliance? We are all about helping to take the hassle out of contracting overseas, and can assist in reducing your confusion and tax liability while ensuring that you remain entirely tax compliant.
Holland is one of the most popular contract locations in Europe. The Dutch Contracting market has been virtually immune from the effects of the global economic downturn, and the market is always buoyant.
The Netherlands has a central role as the ‘Gateway to Europe’, with the port of Rotterdam, Europe’s largest port and fourth largest worldwide, and Amsterdam Schiphol Airport, a major European airfreight and passenger hub. It has a vibrant IT contract market, particularly in the banking and insurance sectors.
Our local knowledge and expertise can help you navigate through the system. The Dutch system of taxation and social security is complex and rather strict, and rates of tax and social security to be paid can be high.
The most important points to consider while contracting in the Netherlands:
- As an EU/EEA citizen you can, for the most part, contract in Holland without the need for a work permit
- Contracting in Holland must be an employed structure unless you have a Netherlands Ltd Company
- Taxation in the Netherlands is strict, and it’s essential to remember the 30% ruling. The 30% reimbursement ruling (better known as the 30% ruling) is a tax advantage for highly skilled migrants moving to the Netherlands for a specific employment role. When the necessary conditions are met, the employer can grant a tax free allowance equivalent to 30% of the gross salary subject to Dutch payroll tax. It could sound complicated but is very simple once you know it.
All citizens must register with their local town hall office upon entry into the Netherlands if they plan on staying in the country for more than, on average, 4 months (this period can change from city to city).
Citizens of the EU/EEA who wish to stay in the Netherlands for more than 3 months must also register with the Immigration and Naturalisation Department (IND). The department will stamp your passport as proof that you have registered and the stamp is then valid throughout your passport.
With these registrations done, there is a choice to be made based on your contract duration and intentions: between a SoFi number and a BSN number. These numbers fulfil the same function (in many ways they can be considered equivalent to a UK National Insurance number) but differ in the implications that they entail.
Self-Employment Registration in the Netherlands
If this is the right type of engagement for you (please note there are very strict rules in the Netherlands regarding self-employment). You must choose a unique name or trade name for your business and have it registered with the Dutch Chamber of Commerce (Kamer van Koophandel or KvK). To book an appointment, you must first complete a registration form.
Most freelancers and sole traders opt for an unincorporated business structure and are typically referred to as ZZP’ers (zelfstandige zonder personeel or self-employed without staff).
Once your registration is approved, you will be given a company registration number, which you must use on all invoices and business correspondence. You can also get your VAT number (locally referred to as BTW) when completing the business registration; your tax registration with the Dutch Tax Authorities must also be completed at this point.
Health Insurance and Social Security Benefits
As a general rule, every person living and working in the Netherlands must contribute to the Dutch social security system. This will be done through the local payroll, and your Link contact will be able to provide you with more details.
Health insurance is also compulsory, but this is not covered under the social security system so you will need to also look into taking out Dutch public health insurance separately – this must be done within four months of arriving in the country. Health insurance covers most healthcare services from GPs and hospitals and health insurance companies (there are more than 150 private and public companies) have to offer the same basic policy to everyone. Have a chat with Link to discuss this matter and find out more about the health insurance company they work with.
Taxation in the Netherlands
The Dutch tax year is the calendar year, and tax returns must be filed by April 1st of the following year. Tax rates are banded between 33% and 52% dependant on income, but this is tempered by the 30% ruling. There is an expatriate scheme that allows foreign employees to be paid a tax-free allowance of up to 30% of the gross salary provided specific criteria are met.
Allowable expenses for self-employed people
Depending on the circumstances, investment allowance, tax-deferred retirement reserve, self-employed persons’ allowance and allowance for research and development work may apply before taxes. Costs such as telephone, internet, mobile phone, business software, transport (taxi, train, plane etc.) and hotel, insurance premiums and training courses, are generally fully deductible. Entertainment expenses are only partially deductible.
The experts at Link Global Management are always happy to help, providing detailed advice and guidance through the process. Contact us on our website.
One of the perks of being a freelancer or contractor is that you have more flexibility to work for whomever you want, wherever you want. You may choose to complete a design job for an American client from a café in Paris or sort out your accounts on an Argentinian hacienda.
Working from a foreign country isn’t all margaritas and sandals though; there are both legal and tax implications for either working abroad or working for a foreign company.
Europe is a popular choice for British freelancers and contractors looking for international work due to its proximity to the UK – both geographically and culturally.
Contractors guide to working in France
It seems Brexit is not taking the gloss off working in France. It’s either that or contractors want to take the most of working across the channel before the EU exit completes in 2019.
- As one of the champions of the EU, France is an extremely easy place for UK contractors to obtain work, and you will most likely not need any kind of permit
- Renowned for their love of leisure, most companies enforce a strict 35-hour working week. There’s even a ban on out of office emails and phone calls in most companies
- It should be noted, however, that working in France and putting the money through a UK limited company is not compliant with French tax laws and you will be required to pay tax in France as well as in the UK
As long as Britons go before exiting the EU, they have four options when it comes to contracting for French outfits in their country.
There is no ‘best’ method so as long as the route chosen is awful in France. It also needs to be compliant with the rules at home, otherwise you might face problems when you return. There are pros and cons in every choice but there are at Link will help you navigate and make the most informed and suitable decision for you.
Should you need a work permit to work in France as a non-EU national, then you must have a French employer to sponsor your work visa. In this case the only option open to you is to be employed by the employer as your permit will be tied to the sponsoring company.
If you are a French citizen and you wish to remain within the French social security system then, again, employment is what you will choose because in this way you will be entitled to the range of social security and health care benefits to which an employee in France is entitled. These include:
- Health care
If you are an EU citizen, you don’t need a permit to work. You can make private arrangements for when you may be out of work, including your health care and your income in retirement. So being self-employed may make sense for you. To be eligible, you need to be clearer that you are not in an employment or subordinate relationship with your client. If you are, then arguing with the tax authorities that you are not employed may be difficult. It means you and your client may face deemed employment, with the authorities looking for employer social security contributions.
Should you have a current employer and that employer wishes you to work in France for a period of up to 24 months then ‘posting’ is an option. When posting, you remain the employee of your employer throughout the period and you can use the Double Tax Agreement (DTA) and Social Security Treaties between your home country and France. In some instances, you may also be able to use security treaty between France and where your employer is based, if different.
What is interesting is that the DTAs set out where you are to be taxed. If your stay in France is to be for a period of less than 183 days in a tax or calendar year, then the income tax that you will be liable to pay will be that in your home country where you are normally tax resident. On the other hand, if your stay exceeds this duration then you will contribute to French taxes from the start of the assignment.
Of equal or perhaps greater interest is that you may opt to pay your social charges back at home. To do this your employer can apply for a Social Security Certificate A1 which then exempts you from social security contributions in France. Generally, an A1 is issued for 12 months and may be extended for a period not exceeding 24 months.
Personal Services Company (PSC)
EU law does not permit discrimination against a company from another Member State. This fundamental right means that you may, if you wish, use your own limited company that is not French (although it may be French), to work through while you contract in France.
This right comes with obligations to respect the laws in France relating to social security, employment law, income tax, VAT, and corporation tax, as well as the company and personal registrations that are required in France when one lives or works there.
However, should you not comply with the law, the authorities will consider your PSC usage as very aggressive tax avoidance.
Despite its popularity, France is still sufficiently different from the UK that contractors winning work in the country should seek professional advice to both set up and run their French contracting business.
Link Global Management are perfectly placed to handle your France contractor accounting. Get in touch with us to assist you structure your work arrangements with confidence using our internationally renowned accounting solutions.
Wilkommen! You’ve secured a contract in Germany – congratulations! Now you need to know about some of the customs and traditions of this fine country, as well as the ‘nitty-gritty’ such as income tax and visa requirements.
You are obliged to declare all income earned in Germany to the German tax authorities. There may be a double taxation agreement designed to prevent you paying tax twice, both in your home country and in Germany. Freelance (Freiberfuler) contractors pay income tax quarterly. You should receive a tax ID approximately 4-6 weeks after registering with our German accountant.
Visa Requirements for contracting in Germany
If you reside within the EU, you do not need a Visa to contract in Germany. All that you have to bring is your passport or national identity card. Easy! As an EU national, there are no limits to access to employment and self-employment, and your spouse and children can also live in Germany without restrictions.
Some useful points worth knowing when you are leaving for Germany…
Don’t be late!
Germans like everything to run like clockwork, so the last thing you want is to show up late for a business meeting – that won’t leave a good impression. A phone call will suffice if you are going to be five minutes late. Common sense when you think about it, and good manners as well!
While we’re on the subject of good manners…
Know your German etiquette
The French might greet each other by giving a peck on each cheek, but the Germans value their personal space. A simple handshake is the acceptable form of greeting. If you’re invited to your colleague’s house for a drink after work, it is generally customary to remove your shoes at the door, and a bunch of flowers always does wonders with your guest. Also, if you speak German, don’t forget to use ‘Sie’ when talking to your companion, as ‘du’ is considered to be too casual when you barely know them. And we think English is a complicated language…!
If you’re used to nipping to your grocery store at all hours of the day and night, the fact that Germany essentially shuts down on Sunday will come as a bit of a shock. So, stock up on supplies beforehand! Also remember: cash is king – not all places will have credit card facilities.
Don’t mention the Wars
Beware that there is a difference between engaging in interesting conversation about world politics and mentioning the wars. Extreme references to either World War are not only disrespectful but could land you in jail. Many Germans prefer to dissociate Hitler from their cultural identity – unsurprisingly!
Germany is world famous for its Curry ‘Wurst’ (sausage) & ‘bier’ (beer) – I recommend that you try both!
But don’t be fooled, Germany is not all curry wurst, beer, time keeping and manic speeding – Germany is rich in culture and business opportunities.
It isn’t a secret that the world of work is changing. We have heard, read and seen many people opting for flexible conditions and choosing to work on their terms and convenience. Saves the hassle, they say, and gives more personal time away from the artificial light at the office. As I researched topics that could be helpful and interesting to our clients, I contacted a few contractors internationally. Not once did I speak to a Female contractor! This called my attention, so I did some research on the industry of women contractors. Turns out, there are more than you might have thought there were, and they love what they do!
According to a Kingston report, contracting is becoming an increasingly viable and attractive option for women and mothers, as more women than men are making the move into contracting. In 2014, the numbers of female contractors increased to 746,430 – 39.6% of the total.
A few weeks ago I had the pleasure to talk with one of our customers. We discussed the pros and cons of being a female international contractor. Her name is Gabriela Ječná, and we talked about what her favourite parts of contracting are and what challenges she faces.
Gabriela is originally from the Czech Republic. She chose to become a contractor and has been contracting for three months now, and her position is MES HYDRA Specialist.
Hi, Gabriela, could you tell me more about your position as a female contractor and the project?
I am currently a Technical Assistant and MES Project Manager at Murr Elektronik.
MES HYDRA by MPDV USA is a fully integrated Manufacturing Execution System (MES) that helps organisations collect and analyse critical data related to production, HR, and quality management. With HYDRA, manufacturers can gather real-time data from their shop floor, personnel, machines, and other processes.
What does your role involve?
I am responsible for finding a solution that can be applied across the world. I am also developing solutions specific to one location. What is more, passing the knowledge about MES System is also essential. A vital part of my job is to equip well the employees who will proceed working on the project. That way they will be able to continue working, once I step off.
What is your current contractor assignment and where is it based? Does it mean you are away from home a lot?
I do not have a base at this stage of the project. The current task is to complete the MES template and prepare for migration. I travel a lot between the headquarters and the production plants across Europe.
What does your current contractor assignment entail?
I’m helping with setting of the system solution. How we will use HW and terminals. I am also conducting data analysis and data mapping for the migration. What is more, I have process knowledge, so I am able to help with functionalities and testing.
Please talk us through your typical day.
Usually, I get up, have breakfast in the hotel, and go to the office around eight. There, I go through the emails to make sure I know when I have meetings and then start working on individual tasks. Meanwhile, I have meetings or teleconferences, and sometimes I need to discuss solutions with my colleagues. I end the day at six o’clock, I go to the hotel to change, and around seven, I go with my colleagues for dinner. Then we go for a walk and go back to the hotel. That‘s my day when I’m not home.
What do you most like about your current role and what, if anything, would you change?
I like to see that our work is taken seriously and we have an impact on the future of business. I love independence, and it is also interesting to discover new places. The only thing missing out on my way is family and friends. But they are very understanding and support me through my absence and projects.
How do our services help you as a contractor?
I can concentrate more on my work, and I do not have to spend a lot of time on bureaucracy. Thanks to your service, I spent more time with my family and relax more.
Thank you, Gabriela! That was very interesting.
I would love to find out more about the day-to-day life of other female contractors! Please, if someone has more exciting stories, share them with us! It is a whole new world to be discovered!
Get in touch with LINK Global Management via our website.
Test form for DC, see Email to follow 22.05.18
At Link Global Management, we’ve been helping international contractors for more than 20 years. They work in a range of sectors, especially oil & gas, energy, IT and telecommunications, construction and engineering. They’re on placements the world over, in Europe, Africa, Scandinavia, China and the Far East.
Are you set to start a new position as an independent overseas contractor? But you’re not sure what to expect or how to survive your first few days?
Here are our top 10 practical tips from our most well-travelled contractors.
Follow them and you’ll hit the ground running!
- Get collected from the airport
It’s never easy arriving at a foreign destination, even if it’s not in the middle of the night. Ask your client to send someone to collect you. It can be difficult to find a taxi at some airports and you’ll be disorientated anyway. You need to get to your accommodation as soon as possible – you may be working the next day.
- Carry local denomination with you
Having some local currency in small notes and coins will do you no end of favours for all the incidentals you might need on arrival, local cashpoints and banks may not be accessible at your time of arrival and you may find local vendors reluctant to offer change for high value or non- local currency.
- Case the neighbourhood
Book into a hotel for the first few days where you’ll feel safe and looked after. Use it as an exploration base if you’re going to need to find your own accommodation. Remember, it’s safer to drive than walk around an unknown city. Ask work colleagues for recommendations. Look for somewhere on the border of student and middleclass land where it’s decent and where there are likely to be short-term lets.
- Barter for accommodation
If your stay is shorter, say weeks rather than months, a serviced apartment often makes more financial sense. Many places are prepared to discount if you block-book for a couple of months. So it’s always worth negotiating on the first price you’re offered.
- Use a local SIM card
Beware of roaming charges. Buy a local SIM card. It’ll work out cheaper. But remember to unlock your phone in advance or take a separate unlocked handset. Make use of wifi and use Skype or another VOIP to stay in touch with friends and family at home for free.
- Allow three days for red tape
Even if you’re contracting within the EU, there are often umpteen forms to fill in and places to register with. The red tape varies by country. In uber-efficient Germany, for example, things are centralised at the Bezirksamt (district office). In France, though, the process is more complex. Often many of these offices close at lunchtime. It’s a good idea to set aside a few days to get all the paperwork done and stamped.
- Get paid in a convertible currency
Make sure the currency you’re paid in is convertible. US dollars are a good fall back, as is Sterling and the Euro. If you’re travelling to parts of Central America say, or Central Asia, remember the local currency may not be easily converted by money exchanges.
- Eat local food straight away
For many people working in exotic destinations, Delhi belly can be an issue. Take sensible precautions such as using handwipes or antibacterial gel, not drinking the local water or ice, peeling fruit and only eating well-cooked meat or fish. If you get an upset stomach, it’s probably nothing to do with bad food or bacteria. It’s more likely your stomach isn’t acclimatised. Many contractors swear by taking probiotic tablets to boost their immune systems and boost gut flora.
- Make use of social media
Arriving at a new placement not knowing a soul can seem daunting. But, depending where you’re going, you’ll often be able to make contact with people already on the ground. Or you can find out what’s happening through social media such as Instagram, Twitter or Facebook groups for independent contractors at your new posting.
- Have a ‘can-do’ attitude
Don’t underestimate the impact culture shock can have at the start. You’ll cope better if you’re mentally prepared. Coping is all down to attitude. Stay positive and believe you can get things done. Being tolerant, open-minded, non-judgmental and curious will make settling easier. Having a sense of humour helps too. Many contractors say it can take up to three months to find your level. Keeping up your drive and energy to learn about the new culture will pay big dividends. That way your overseas contract will be the remarkable experience it should be.
A Whole World of Opportunities
Thinking about contracting overseas? Then you’ve plenty of new horizons to look forward to.
Here are the 3 top reasons our contractors give for taking the plunge …
1. Financial rewards
Salary perks aren’t the only incentive to working abroad for the hundreds of overseas contractors we help. But they’re definitely a big motivation. Why?
As a contractor, you secure higher rates than employees in similar positions. They’re often as much as 50 – 100% higher. You’re also often able to take advantage of the more favorable tax regimes that certain countries offer. You’ve also the freedom to decide the best employment model for yourself to boost your tax efficiency and reduce tax liabilities.
Of course, what you do have to factor in is what you don’t get as an overseas contractor. Usually, you won’t receive employment benefits such as holiday or sickness pay. Nor do you get car allowances, company pension schemes or private health care. But, the pay-off is the huge leeway you get to offset other expenses. Plus you enjoy generous tax relief on any contributions to personal pension schemes and one of the bonuses of working with Link Global Management is that we offer a private healthcare scheme for our contractors.
Wherever your contract work overseas is – Kazakhstan or Kuwait, Malaysia or Mali, or anywhere else – there’ll be an ideal employment or trading model to suit your circumstances. This’ll depend on your role, its length, the country you’re in, your recruiter, or end client. For most overseas contractors, it’s the umbrella, limited company, full- or self-employment model. Each has different benefits. To find out more, we’ve got all the details here.
2. Freedom and flexibility
As an independent contractor, you’re your own boss and not tied to the same office chair day in and day out. You can pick and choose the roles you take on. You can also be flexible and take time off between contracts. So you can see more of the world or spend your downtime with friends and family.
The world is there to be discovered when you work abroad. You’ll get to see sights you’d never witness in your home country. Or ones that you’d have to pay a fortune to see on vacation. You’ll also get to try activities you could never do at home. Plus make new friends and sample delicious cuisines. If you want to really meet the locals and experience a culture firsthand, the lifestyle you get when working abroad is hard to beat.
That said, living abroad can be challenging. At the start of each contract, you’ll have to adapt to new ways of doing things. Immersing yourself in a foreign environment needs flexibility. But while it might be unfamiliar at the beginning, every new contract you complete means you’ll develop greater independence, resourcefulness and strength of character.
Remember too that you have to fund gaps between contracts and the time it takes to secure the next. Most business advisors would recommend having around six months of income saved up as security. Or more if you’re conservative or unsure about availability of work in your particular sector.
3. Opportunity to boost your skills base
Talent mobility is already playing a key part in enabling business leaders to meet the challenges of the global business world. It’s one that’s more technologically advanced, demographically complex and geographically diverse than ever before. So says a new study by the European Relocation Association.
This goes for whatever sector you’re specialised in – construction, IT, oil & gas, energy, finance and more. People who’ve shown the initiative to work overseas usually return home with deeper technical skill-sets though. They’ve also got broader experience, global market understanding, and, often, foreign language skills too. These are all big benefits for your career ahead.
Having a mix of overseas contracting assignments on your CV is undeniably good for your career development. More and more, employers are looking for international exposure today. By working abroad, you’re getting ahead of the game and equipping yourself for your future professional life.
There really is a whole world of opportunity out there.
The smoking gun that recruitment agencies and freelance contractors can’t afford to ignore
Time is running out for recruiters and contractors to get their books in order in time for the Criminal Finances Act 2017.
It includes HMRC’s new Corporate Offence of Failure to Prevent the Criminal Facilitation of Tax Evasion.
You now need to be fully prepared for this law. It comes into effect on September 30th and it’s powerful stuff.
The fall-out for recruitment agencies
The law’s relevant whether you’re a recruitment agency contracting in the UK or to overseas.
You might assume it’s only banks, accountancy and advisory firms that are affected. But you’d be wrong. The law applies to all companies, partnerships and LLPs.
So there’s an impact for recruitment agencies too. The supply chain, labour arrangements and overseas aspects of the law are relevant to all organisations.
And it could result in criminal sanctions for any recruitment agency directors discovered to be in breach of tough new rules.
The fall-out for freelance contractors
The law affects you if you’re a contract worker in the UK or overseas. It means there’ll no longer be any place to hide.
Although the new law doesn’t apply to individuals as they can be prosecuted under existing laws, you still need to make sure you’re 100% tax compliant. Why?
Because your recruitment company, umbrella company or offshore payroll provider can’t now knowingly provide any tax avoidance ‘smoke screen’ for you. It’s obliged to disclose tax evasion by those on its books. Or suffer the consequences.
So how might you be affected?
First, the bad news. It’s a potential can of worms and means you can’t afford to put your head in the sand. You need to take action fast.
Second, the good news. You can take immediate measures to ensure your risk exposure is watertight.
What does the law say?
For an offence to be committed:
- There must be criminal tax evasion under either UK law or foreign law
- It must be enabled by the business’ employee, agent or anyone performing services to the business
- The business must have failed to prevent that person from enabling the crime
The offence itself will have three stages:
Stage 1: criminal tax evasion by a taxpayer. This could be the offence of cheating the public revenue or fraudulently evading the liability to pay VAT.
Stage 2: criminal facilitation of this offence by a person acting on behalf of the corporation, whether by taking steps with a view to; being knowingly concerned in; or aiding, abetting, counselling, or procuring the tax evasion by the taxpayer.
Stage 3: If there has been a criminal offence at stage one and stage two, a corporation is then liable for having failed to prevent a person associated with it from committing the criminal act at stage 2.
What do we recommend recruitment companies should do?
The only defence mechanism you’ll be able to use is to show you’ve put ‘reasonable procedures’ in place to prevent facilitation of tax evasion.
This means you’ll need to be 100% clear on the risks associated with your contractors, employees, third parties and all their downstream activities.
The legislation covers ‘overseas offence’ too. A relevant body incorporated in the UK can only commit this. Or one that does business from a permanent establishment in the UK. Or whose associated person commits the overseas facilitation offence in the UK.
So you could be liable if someone associated with your recruitment agency knowingly assists a contractor in evading tax in the UK or overseas. Or if you know that a contractor is evading tax in some way.
Our practical advice for recruitment companies
- Read the legislation in full
- Carry out a thorough risk assessment
- Analyse your internal processes
- Get commitment from your top-level management to develop a culture where tax evasion is never acceptable
- Hold a training session so your employees understand this and the rules – We are currently running sessions with our agency partners
- Check that all of your preferred providers such as your umbrella companies or contractor accountancy providers can prove they follow high professional standards
Still got questions on how to deal with the Corporate Offence of Failure to Prevent the Criminal Facilitation of Tax Evasion? Then take professional advice. We can help you here.
Contractor numbers have soared since the millennium. More workers in all sectors are reaping the benefits of freelance employment and a better work-life balance.
This widening shift to global flexible working is positive news for international recruiters and overseas employers alike.
Global mobility on the up
In the UK alone, the number of ‘iPros’ has risen by 63% since 2004. These are people who work for themselves in skilled service activities.
It’s a phenomenon that covers multiple industries. Sectors include IT and computing, telecoms, oil & gas, construction, and more.
A similar picture can be seen across all EU member states, especially in the Netherlands (95%), Poland (88%) and France (85%).
There’s a growing movement among organizations to tap into this flexible manpower for their worldwide contracting challenges.
Contracting has become an ever more important solution for end clients, with more international businesses recognizing the important work carried out by flexible workers familiar with project-based work.
The future growth of the global economy looks dependent on it too.
The Brexit-Trump factor
But two factors will probably be worrying contractors and recruiters right now.
The election of Donald Trump in the US, and the vote for Brexit in the UK,
We’re in uncharted territory. Just how Trump and Brexit (if it happens in practice) will affect globalisation trends and freedom of movement, nobody yet knows.
But it’s likely there could be new hurdles for contractors to continue working in EU countries. It all depends on the deal the Brexit negotiators strike with Brussels. It’s certainly possible that UK contractors may need a visa to work in the Union in future.
And what about regulations for contractors to the US? This, too, is unknown.
But despite Trump’s ‘Hire American’ push, there’s no denying there’s a shortage of qualified Americans in many sectors. It’s especially true of scientific and programming jobs. It’s what’s forcing US companies to turn overseas to meet their hiring needs.
And in the end, even in the US, pragmatism about worldwide contracting challenges may well win out…
Supply and demand for global talent
There’s a positive side to this uncertainty though. International recruiters who specialize in sourcing skilled contractors are in the perfect place to take advantage.
That’s because unpredictability always means a shift by global companies away from permanent hires. In times of economic insecurity, contracting makes far more sense. Organizations tend to change their mindset. They go from: ‘I need to hire a person’ to ‘I need to get this job done.’
In this scenario, contractors are the perfect short-term solution.
How contractors are filling the talent mismatch
According to Manpower Group’s annual talent shortage survey, 40% of global employers have talent shortages.
In many parts of their world, there’s a glaring scarcity of homegrown talent. Emerging markets such as Latin America the Middle East, Africa and Eastern Europe are feeling the pinch most.
The main shortfall areas? These include IT and telecoms, infrastructure and construction, skilled trades, life sciences and healthcare, engineering, energy, and oil & gas.
Employers in EMEA are facing talent shortages at the highest levels since 2006. There, 36% of employers report struggling to fill vacancies. In Romania, Turkey, Bulgaria and Greece, employers have “acute difficulties”. In Asia, it’s 46% of employers and in the Americas, 42%. Argentina’s the worst hit, with 59% reporting an “acute talent shortage”.
So, despite all the uncertainties right now, one thing’s for sure. The war on talent points to an increasingly competitive landscape for recruiting talented and flexible workers.
That’s good news for contractors , and good news for international recruiters ,too.
Are you an international recruiter? Tell us about your experience below