How to work with foreign customers: 6 questions that worry freelancers
Miscellaneous / / April 19, 2023
Where to find clients outside of Russia, how to get money and what you need to pay taxes.
Working with foreign clients, you can choose from a huge number of tasks from all over the world the most interesting ones. It's no surprise that many experienced freelancers strive to reach this level. But before making a portfolio in English and calculating potential earnings in foreign currency, it is worth understanding the main issues.
1. Where to look for orders
There are several options worth looking into.
Exchanges
The largest international exchanges like Fiverr and UpWork have closed access for Russia, but there are lesser-known sites that are still working. For example, PeoplePerHour, freelancer, freelance map, legit, Hiresine, TaskShift. You can also find foreign customers on them, but you can only get money for the work done through foreign accounts.
Unlike freelance exchanges, the LinkedIn social network was created specifically for building working connections: here you can find open vacancies, post resumes and establish business contacts with other specialists.
In addition to full-time work, they are also actively looking for people for freelance projects - just enter in the search by vacancies "freelance" or go to special groups where customers publish posts about finding the right specialist. For example, Part Time Jobs.
The resource is blocked in the Russian Federation, but the site itself did not stop working with Russian users.
Twitter and Facebook*
Access to them from Russia is now possible only through a VPN. However, on these resources you can often find posts asking you to recommend freelance specialists on the personal pages of company representatives. At the same time, anyone can respond to the request - it does not matter whether he is familiar with the author of the post or not.
Telegram channels
Information about freelance projects is published, for example, Distance And YES NO MAD | Help freelancers IT & Digital. Most of them are from customers from Russia and the CIS, but you can often find offers from foreign customers with payment in foreign currency.
Profile forums and sites
There are large active freelance communities on Reddit - for example, freelance_forhire or freelance. In them, people share useful information, and customers publish projects. Designers and illustrators will find it useful Behance And Dribble.
2. What documents will be needed
Before you start working on a project, you need to document everything. Here are the documents required for this.
Contract with the customer
This is a binding document for the transaction. It is important that all the conditions are fixed in it: who is the customer, and who is the contractor, what services are provided and what should be the result, how much it will cost and when should it happen payment.
It is also necessary to indicate which documents are provided at the end of the work, in what time frame and in what form. For example, “Within 5 (five) days from the date of receipt of the Act, the Customer undertakes to accept the Result by signing the Act and handing it over to the Contractor, or send a reasoned refusal, informing the Contractor of the need corrections".
Additionally, you can prescribe the conditions for the delivery and acceptance of work, the procedure for transferring copyright, responsibility for each of the parties, and so on.
Most likely, the customer will provide the form of the contract himself. If not, a sample in English can be found on the Internet - for example, Here.
Act of acceptance of works or services
With its help, the customer confirms that the freelancer really did the work, and he accepted it and has no complaints about the quality. Usually, the document is drawn up by the contractor at the end of the work, and the client can sign it remotely - for this, you can exchange scans with signatures or use special services. For example, Docusign. The template can also find in open access.
invoice
This check for payment, which describes the subject of the transaction and its amount. A freelancer puts it up, the form can be found on the Web.
NDA
NDA (non-disclosure agreement) is a non-disclosure agreement that the customer transferred to the freelancer during joint work on the project. An NDA is not a mandatory document, but large companies may be asked to sign it, especially if the performer is given access to their inside information.
In this way, customers protect themselves from data leakage when working with freelancers - this is especially important to corporations where disclosure of unsolicited information could result in significant financial losses.
3. Which tax status to choose
The tax status does not particularly affect the work with foreign clients, as it does not carry tax benefits and benefits to customers. But there are a few important points to pay attention to.
Individual entrepreneur
This status indicates the presence of a relatively large-scale case and the possibility of transferring payment to a business account. Therefore, customers are more willing to cooperate with such performers.
But don't forget about currency control: when carrying out foreign exchange transactions, freelancers must confirm the legitimacy of the transaction. Namely - provide a full package of documents at the request of the bank: contract, acts, invoices.
If you do not provide them within 90 days, you will receive fine from 2,000 to 50,000 rubles - depending on the legal status.
self-employed
The self-employed can also work with foreign customers. pros self-employment: low tax rate - from 4 to 6%, no reporting - only checks are needed.
Also, compared to individual entrepreneurs, there are no additional costs such as mandatory insurance premiums, bank commissions and bookkeeping. But you need to remember that this status is only suitable for those freelancers whose annual income does not exceed 2.4 million rubles.
Individual
This status does not require special registration, the tax can be paid once a year, and its amount can be "covered" by various deductions - for example, for treatment, education or the purchase of real estate. There are also disadvantages: high tax rate, mandatory annual reporting, lack of work experience.
4. How to get paid
Now freelancers from Russia do not have many ways available.
Interbank transfers
If the customer is from the CIS, he can transfer the payment to the freelancer in rubles - this will take a couple of weeks. If the client is from another country and wants to pay for the work in foreign currency, then it will be very difficult to receive money by bank transfer, since now it is impossible to open a foreign currency account in Russia. Even if a freelancer already has such an account, SWIFT transfers can be delayed up to a month.
Therefore, a freelancer cannot do without a map foreign banks, which were not included in the sanctions lists - for example, Raiffeisenbank and UniCredit. Please note: even in this case, the money may arrive with a delay, and some transactions are completely rejected by financial institutions without explanation.
Transfers in cryptocurrency
Money comes without delay, but not all clients are ready to pay for work in this way: in fact this is a bank transfer from a buyer from a crypto exchange, there can be neither an act, nor an agreement, nor accounts. Neither the company nor the freelancer will be able to account for such transactions - that is, these incomes and expenses cannot be considered legal.
Payment through services for transactions with freelancers
For example, Deel, «Console" or Solar Staff. The freelancer concludes an agreement with the service, which, in turn, signs documents with the customer company. Services transfer payment to the freelancer, as well as automate other processes for the transaction - for a percentage of the cost of the work.
5. How to pay tax on income from an overseas customer
Now the tax service is more closely monitoring incomes within the country: the department’s specialists are checking whether they are hiding behind cooperation with self-employed or IP labor Relations.
Therefore, income from foreign organizations will not raise additional questions, only if you have documents that confirm the legality of the money received.
When reporting income from a foreign company, it is important to consider the following:
- If your status is “individual”, then when submitting a declaration in the form of 3-personal income tax, it is necessary select category “Source outside the Russian Federation” and indicate the name and country, income amounts, advance payments, tax deductions and tax amounts.
- If your status is “self-employed”, then when generating checks, you must indicate buyer as a "foreign entity".
- If your IP status, then you obliged keep accounting or tax records and have a complete set of documents: acts, invoices, contracts - they will be checked not only by the tax office, but also by the bank. It is also necessary observe currency control requirements: for example, it is mandatory to register a contract with a bank if the income from the transaction exceeds 10 million rubles.
If you incorrectly reported income from a foreign customer and this did not affect the amount of tax, you have nothing to worry about. But if you underestimate the amount of tax, then the consequences will be as follows:
- For individuals and individual entrepreneurs - the accrual of penalties for late payment of tax and fine up to 20% of the tax amount.
- For the self-employed fine for the first violation in the amount of 20% of unaccounted income and 100% - in case of a repeated violation within six months. Also added to this are penalties for late payment of tax.
6. How to protect yourself from unscrupulous customers
There are dishonest clients everywhere, including in international freelancing. These simple rules will help you avoid cheating.
Work under a contract or through a secure transaction service
The signed document is your protection against payment delays, unreasonable edits and other disputable situations. Cancellation agreements should alert: for a conscientious customer, he will also be a guarantee that he will receive the expected result of the work.
Secure transaction services and some exchanges (for example, Freelancer) act as a guarantor of payment for freelancers for completed work - they themselves draw up documents for both parties and take upon themselves the resolution of disputes with customers.
Check the customer
Study the company and the reviews of its employees and freelancers. Check through search engines and online maps if such a company even exists. If in doubt, ask a question in the freelance communities on social networks - perhaps someone has already worked with this customer and can share their experience.
If you met a client on the stock exchange, pay attention to the rating and reviews of the performers. Make sure the account is verified and has been in existence for more than a few days.
Protect your work
At the first iteration, send the result to the customer in such a way that he cannot use it without your knowledge - send the text in a non-editable format, add water marks on images and videos, use screen sharing on online calls instead of sending files.
After the customer has agreed on the final result and is ready to pay for the work, send the files in the normal format.
Start small
Before taking on a large-scale project from an unfamiliar client, “test” it on smaller tasks if possible. This will help to understand whether the client is meeting the deadlines and agreements, and will show how adequate his comments are.
*Activities of Meta Platforms Inc. and its social networks Facebook and Instagram are prohibited in the territory of the Russian Federation.
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