Ultimate guide to hiring international contractors in top 15+ countries

Introduction

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. 

The benefits of hiring overseas contractors 

• You’ll have employees on the ground at your target markets, so they can supervise the supply chain.
• You have local employees who understand the culture and market that you’re selling to.
• You can hire the best talent there is, no matter where it’s located.
• Hiring talented workers in areas where the cost of living is low helps keep your costs down.
• You can easily provide “follow the sun” round the clock customer support, because you have employees in different time zones. 

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.

The difference between contractors & employees

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:

• The number of hours they can work in a day, week, and month
• Their entitlement to benefits like vacation time and employer-contributed pensions
• How their salaries are taxed
• What your tax situation is in that country and your home country

The definition of an independent contractor

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. 

The definition of an employee

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:

• Who provides tools and supplies? If it’s you, the person is more likely to be considered an employee.
• Are expenses reimbursed? If so, they are probably an employee.
• Is the work performed a fundamental aspect of the business? If so, they are probably an employee.
• How long has the contractor been working for you? The longer the relationship, the more likely they are to be considered an employee. 
• Did the worker sign a non-compete agreement? That’s often seen as turning a contractor into an employee.

Here are some ways to make sure your workers are contractors and not employees:

• Do not set fixed hours they have to work (e.g. 9am-5pm).
• Avoid hiring a contractor to perform an essential aspect of your business.
• Don’t request an exclusive relationship; instead, give the contractor freedom to have multiple clients outside your organization.
• Don’t require workers to complete a training or supervision period.
• Ask workers to provide their supplies and tools, and don’t reimburse them for expenses.
• Don’t provide workers with the kind of compensation that you’d usually give to an employee, like insurance, pension, or vacation days.

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.

Hiring independent contractors overseas doesn’t have to be scary

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.

Brazil

How to find contractors in Brazil

In Brazil, the best way to find contractors is through Brybe, XPat Jobs, Indeed Brazil, CareerJet, Craigslist, Upwork, or other freelancer sites.

What you should know before hiring a contractor in Brazil

Who is a contractor in Brazil?

In Brazil, a contractor is someone who:

• Doesn’t work for the employer on a permanent basis,
• Doesn’t receive a fixed monthly salary, and
• Is can choose their own work hours or how the work should be done, and doesn’t have to present regular reports and/or meet fixed targets

Out of those 3 conditions, the most important one is the last one. 

The regulations around hiring contractors in Brazil

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:

• 8 days if you pay them monthly
• 4 days if you pay them weekly or fortnightly
• 1 day if they are working for less 7 days

Brazil law also requires the contracting party (that means you) to:

• Pay social security contributions of 20% of the contractor’s total monthly compensation. 
• Withhold 11% of the contractor’s remuneration, for their share of their social security contributions, and pay it to the government.
• Withhold the contractor’s income tax contributions from their monthly compensation and pay it to the government. Income tax is progressive and can get as high as 27.5%.

You can learn more here about the regulatory framework around hiring an independent contractor in Brazil, or talk to a local legal expert.

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Chile

How to find contractors in Chile

In Chile, the best way to find contractors is through Indeed Chile, Laborum.cl, Chile Trabajos, and Buscojobs.

What you should know before hiring a contractor in Chile

Who is a contractor in Chile?

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. 

The regulations around hiring contractors in Chile

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.

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Colombia

How to find contractors in Colombia

In Colombia, the best way to find contractors is through Workana Colombia, Computrabajo, XPat Jobs, Indeed Colombia, Upwork, or other freelancer sites.

What you should know before hiring a contractor in Colombia

Who is a contractor in Colombia?

In Colombia, an independent contractor is someone who:

• Has control over their working hours.
• Is paid through invoices and not with a fixed monthly salary.
• Doesn’t have to submit reports on a fixed basis or follow specific requirements for how they do their work.

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. 

The regulations around hiring contractors in Colombia

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.

Peru

How to find contractors in Peru

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. 

What you should know before hiring a contractor in Peru

Who is a contractor in Peru?

In Peru, an independent contractor is someone who:

• Sets their own working hours
• Can have more than one client
• Is paid compensation for their services, ideally in response to invoices, instead of a monthly salary
• Doesn’t receive any employment benefits
• Are independent about where and how they work
• Provides specialized services and doesn’t carry out any core business activities 

The regulations around hiring contractors in Peru

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.

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Serbia

How to find contractors in Serbia

In Serbia, the best way to find contractors is through Upwork, Guru, Freelance.hr, DesignCrowd, PeoplePerHour, and other freelancer sites.

What you should know before hiring a contractor in Serbia

Who is a contractor in Serbia?

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:

• Don’t receive employee rights like a fixed salary, working hours, overtime pay, vacation time, and sick leave
• Don’t work somewhere else on a full-time basis
• Don’t have to follow the same code of conduct as your employees
• Can subcontract their work
• Don’t have an agreement to work for you exclusively
• Aren’t working on core business activities 

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. 

The regulations around hiring contractors in Serbia

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.

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Poland

How to find contractors in Poland

In Poland, the best way to find contractors is through Upwork, Guru, Freelancer.pl, Designer.pl, and other freelancer sites. 

What you should know before hiring a contractor in Poland

Who is a contractor in Poland?

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. 

The regulations around hiring contractors in Poland

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.

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Romania

How to find contractors in Romania

In Romania, the best way to find contractors is through Caut Expert, Freelancerit.ro, LiberProfi, Freelancer.co.ro, Upwork, and other freelancer sites.

What you should know before hiring a contractor in Romania

Who is a contractor in Romania?

In Romania, an independent contractor meets at least 4 of these conditions:

• They can choose where and how they work
• They can work for more than one client
• They take on the risks of the work they are doing 
• They own the tools, equipment, and resources they use for their work
• They carry out the work as an individual 
• They are part of a professional organization that regulates their line of work (e.g. lawyers’ association)
• They are permitted to subcontract the work to other workers

The regulations around hiring contractors in Romania

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.

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UK

How to find contractors in the UK

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.

What you should know before hiring a contractor in the UK

Who is a contractor in the UK?

In the UK, the differences between a contractor and an employee aren’t always very clear. To be a contractor, your worker should:

• Set their own prices
• Be able to promote and expand their own services separately to your business 
• Have their own workplace and workspace
• Provide their own tools and equipment
• Not be required to complete training or supervision 
• Be permitted to take on other work for other clients
• Not receive appraisals, audits, or be subject to disciplinary procedures
• Be able to delegate work to other people
• Not have the right to a minimum level of work or pay

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.

The regulations around hiring contractors 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.

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Spain

How to find contractors in Spain

In Spain, the best way to find contractors is through Malt.es, SoyFreelancer, Twago.es, Freelancer.es, LanceTalent, and other freelancer sites. 

What you should know before hiring a contractor in Spain

Who is a contractor in Spain?

In Spain, a contractor is:

• Not under the control of an employer who directs their work
• Not subject to disciplinary procedures at the workplace
• Doesn’t have fixed work hours
• Doesn’t work at the business location
• Bears financial risk for their work
• Pays for the equipment, tools, and resources they use
• Can subcontract work to someone else
• Doesn’t work exclusively for one employer
• Is not employed for long periods of time
• Doesn’t have fixed monthly and yearly compensation

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.

The regulations around hiring contractors in Spain

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.

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France

How to find contractors in France

In France, the best way to find contractors is through Freelance.com, Malt.fr, Beager, MySherpa, JeSuisNumerique, and other freelancer sites.

What you should know before hiring a contractor in France

Who is a contractor in France?

France is very protective towards workers’ rights, so it defines an independent contractor quite narrowly. You need to meet all these conditions:

• Your workers don’t use your office space
• Your workers pay for their own equipment and tools
• You pay them when you receive an invoice, and pay is calculated based on the project they completed, not the number of hours they worked
• Your workers don’t have fixed work hours
• They work for other clients as well as your business
• You don’t monitor their work or performance
• They don’t have to follow any code of conduct or disciplinary procedures
• You don’t provide training 
• They deliver specialized services that your own employees can’t deliver

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.

The regulations around hiring contractors in France

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.

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Germany

How to find contractors in Germany

In Germany, the best way to find contractors is through Freelance.de, Malt.de, Platri IT, Dasauge, Twago.de, Expertpowerhouse, and other freelancer sites. 

What you should know before hiring a contractor in Germany

Who is a contractor in Germany?

In Germany, your workers are more likely to be considered independent contractors if they:

• Can work whenever they like, you just set a deadline for submitting the finished work
• Work however they like
• Use their own equipment and tools
• Work wherever they like, but don’t usually work in your business’ offices
• Are paid per project rather than per month
• Have other clients as well as you

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.

The regulations around hiring contractors in Germany

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.

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Sweden

How to find contractors in Sweden

In Sweden, the best way to find contractors is through Gigstr, Creators.se, Okelii, Freelancer.se, or other freelancer sites.

What you should know before hiring a contractor in Sweden

Who is a contractor in Sweden?

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: 

• They can hire other people to complete the work with or for them
• They don’t use your tools and equipment
• They don’t have a fixed work schedule
• They get paid when they send an invoice, instead of getting a monthly fixed salary 
• They are not reimbursed for direct expenses
• They can work for others while they are working for you
• They don’t have to follow your work instructions and requirements
• They don’t have a long-lasting work relationship with you

In Sweden, you can use independent contractors for any kind of work, including core business activities.

The regulations around hiring contractors in Sweden

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. 

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India

How to find contractors in India

In India, the best way to find contractors is through Toptal, Freelance India, Upwork, Flexc Work, Indeed, ClickIndia, and WorkIndia. 

What you should know before hiring a contractor in India

Who is a contractor in India?

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:

• There is no “master-servant” relationship where the employer controls the actions of the worker
• The worker is not paid a monthly salary
• The employer doesn’t provide tools and equipment
• The work doesn’t continue for more than 240 days in a calendar year
• The worker can refuse work for any reasons 
• The work includes skilled, professional, or specialized activities

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. 

The regulations around hiring contractors in India

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.

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Bangladesh

How to find contractors in Bangladesh

In Bangladesh, the best way to find contractors is through Belancer, Shadhin kaj, Upwork, PeoplePerHour, Toptal, and other freelancer sites.

What you should know before hiring a contractor in Bangladesh

Who is a contractor in Bangladesh?

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. 

The regulations around hiring contractors in Bangladesh

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.

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Malaysia

How to find contractors in Malaysia

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.

What you should know before hiring a contractor in Malaysia

Who is a contractor in Malaysia?

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:

• Has flexible work hours
• Is paid per project and not hourly, weekly, or monthly
• Doesn’t receive any statutory deductions or paid leave
• Works outside of your business premises

If all those things apply, they will probably be considered an independent contractor. 

If someone:

• Signed a contract of service with an employer
• Earns wages of no more than RM2000 (about $450) per month
• Works in manual labor or supervises manual labor for the same employer and earns more than that
• Works as ship officers or domestic servants and earns more than that
• Operates mechanically propelled vehicles and earns more than that, they can’t be contractors.

The regulations around hiring contractors in Malaysia

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.

Payoneer makes it easy to pay your global contractors 

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.

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^[1] According to eligibility and current Payoneer offering

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