How to register as a freelance contractor

Enjoy the independence of freelancing, and remove the administrative burden

Invoicing, tax duties, contracts and even the simple act of being paid can all feel overwhelming for an independent contractor. Fortunately, there are ways to remove the time and frustration involved in handling admin. Treat this guide as a plan to set up payment processes quickly and confidently so you can concentrate on what matters most: your clients.

Choosing the correct business registration

Preparing contract agreements for new clients

Receiving payments as an independent contractor

Managing and tracking invoices

Managing tax obligations as an independent contractor

Liability considerations for independent contractors

Accounting requirements for independent contractors

How do I ask the company I’m working with to convert me into an employee?

Five ways Remote helps contractors and their clients

Onboard with Remote and get set up in minutes

How to set up and get paid as a freelance contractor: your blueprint for removing tedious admin

As an independent contractor, you are responsible for running every aspect of your business: securing and keeping clients, delivering projects, managing admin and promoting your services. You’re also responsible for tasks that may fall outside your expertise, such as drafting everything about your business: getting and keeping clients, working on projects, handling admin, and marketing your business. You are also responsible for tasks that might lie outside your expertise, such as writing up contracts and dealing with taxes.

It can be daunting to draft a contract if you’re unsure which employment laws apply to your business, especially when a client is based overseas. You may also worry about receiving payments without losing a large portion to processing fees.

We want to reassure you that you can manage all of these matters. Indeed, setting up and getting paid as a freelance contractor can be quick, straightforward and efficient — whatever country your clients are in.

This guide provides practical support for independent contractors, particularly if you are new to running your own business. We explain how to set up a process to manage your work and how automation can simplify that process.

We will cover the four most challenging areas for freelancers and show you how to handle this side of your business with confidence:

1. Contracts

2. Payments and fees

3. Invoicing

4. Tax

Ready to learn more about simplifying your freelance business? We’ll begin at the very start: setting up your business.

How to choose the correct business registration

To start working as an independent contractor you must first select a legal structure for your business. That choice determines your tax and legal obligations. The appropriate structure depends on where you are tax resident. Countries, and in some cases regions, have their own rules for independent contractors.

Most countries provide several common options

• Individual entrepreneur. This is a straightforward structure for solo contractors. In some jurisdictions, such as France there is a distinction between the individual and the business; in other places there may be none.

• Partnership. This involves a partnership agreement; frequently the partners and the business are not legally distinct.

• A limited liability company. A formal legal entity separate from the individual running it. In most cases, income and losses are attributed to the company rather than to you personally.

Other models may be available depending on the country where you operate. Australia, for instance, has a trust model in which a trustee manages the business and its activities on behalf of beneficiaries.

Each structure comes with its own pros and cons, but many independent contractors opt for the individual entrepreneur model because it is relatively simple to establish and run.

For more information about employment law in a particular country, see Remote’s Country Explorer — our global hiring guides contain useful detail to help you set up your freelance business.

Read more about becoming an independent contractor

How to become an independent contractor in six straightforward steps

Helpful as they are, contracts can be complicated because contractor rights and working conditions differ around the world. If you rely on a random template found online or draft your own, the document may not be legally binding in some jurisdictions and could work against your interests.

Contractors can make sure their arrangements with local and international clients are lawful by using Remote’s compliant, personalised contract templates. These templates are tailored to country-specific legislation to help contractors remain compliant regardless of where the client is based.

If you already have a contract you are happy with, you can continue to use it. When you onboard as a contractor on the Remote platform, you may upload your own contracts instead of using ours.

Learn more about contracts here.

More about independent contractor agreements

Contractor Management

The risks of contractor misclassification

In almost every country, independent contractors are treated differently to employeesclassified differently than employees. Many of the protections and benefits employees receive, such as healthcare, pensions and share schemes, do not typically apply to contractors. As an independent contractor you forgo those benefits in return for the freedom to choose your clients and decide when, where and how you work.

Despite this distinction, some companies may deliberately misclassify contractors to avoid legal obligations. Other times it happens by mistake. Whether intentional or accidental, misclassification can result in penalties and fines for both you and your client. Your client may face substantial penalties in their country, and you could be affected if the correct tax hasn’t been paid in your jurisdiction.

Bear in mind that it is in your best interests to be correctly classified as a contractor.

First, a contractor has the freedom to work as they choose. In the United States, for example, companies cannot dictate how a contractor performs the job or impose fixed working hours. The contractor decides how and when to work, with the primary obligation being that the commissioned project is completed. Second, correct classification gives you more control over your income.

Penalties for misclassification differ by country. To avoid them, work with your clients to confirm your status. Discuss your role and responsibilities, and review the working arrangement periodically. If your role becomes more integrated into a client’s organisation over time, you can ask to be converted into an employee.

Learn more about the risks of misclassification in the guides below

Contractor Management

Contractor Management

How to get paid as an independent contractor

As an independent contractor you are responsible for issuing invoices and collecting payments. That usually means billing each client individually and accepting their preferred payment method — which can be inefficient and time-consuming.

Some of the most common ways to collect payments include:

Bank transfers

• Bank transfers — a transfer of funds between two bank accounts. While these transfers are usually fast, they often carry substantial service fees.

• Direct deposits. A payment made directly into your bank account. Also quick, but it can incur fees for your client and becomes complicated when dealing with multiple clients or those in different countries.

• Paper cheques. Paper cheques can be deposited via an app, but this method is increasingly outdated because of long processing times. Physical cheques can also be lost or stolen.

• Money orders. Money orders are a secure payment method that can be used internationally in many countries but are inconvenient: they must be bought in person and, like cheques, can be lost, stolen or delayed in the post. Additionally, money orders are sometimes viewed with suspicion because scammers have used them.

• Virtual wallets. Virtual or digital wallets are growing in popularity and provide a quick way to be paid; however, some clients may not accept them and there are security considerations around their use.

• Digital transfer services like PayPal and Wise. Services such as PayPal and Wise are quick and easy to use and often allow you to invoice clients. However, they may take a cut or charge high currency exchange rates, which can be significant.

Alternatively, you can use a trusted solution such as Remote. Our platform provides a simple, secure and reliable way to get paid quickly in your local currency — with no hidden fees. Simply add your bank account as a withdrawal method in your Remote dashboard and payments from your client are deposited directly into it.

You don’t need to keep checking the dashboard to see if you’ve been paid: Remote sends an email as soon as your invoice has been settled. Learn more about how our platform can help with payments.

Your go-to guide for freelance invoicing, with a free template

Contractor Management

How to get paid by international clients

International payments are more complicated than domestic ones. Converting currency, arranging wire transfers and negotiating payment methods, as well as high processing fees, can make accepting international payments stressful.

Remote simplifies this. Our contractor management service covers 200+ countries and territories, making it straightforward for you to be paid in your currency of choice, whatever currency you invoice in. Here’s how it works:

1. Invoice

You invoice your client in whichever currency suits the client and upload the invoice to Remote’s contractor management platform.

2. Payment is made

The client pays the invoices in their own currency.

3. Payment is received

When Remote receives the payment, we convert it into your preferred currency before paying it out to you.

Contractors have two options for payouts. You can add your bank account details directly on Remote, where our payouts are powered by Wise, or you can use a Stripe Connect account. You can change your preferred currency and payment details at any time.

What about fees?

We work with several partners to make sure our pricing is both fast and as affordable as possible. We do charge your clients a $29 fee for payment processing, but as a contractor, the only fee you pay is a mid-market currency conversion fee. If you’re being paid in your preferred currency already, there’s no fee at all.
You can learn more about our fees in this support centre article.

How to manage and monitor invoices

Invoicing as an independent contractor can be a nuisance. You may find yourself relying on a patchwork of tools to create, send and track invoices. It’s inefficient: manual processes are slow, repetitive and prone to error.

By automating your invoicing, you can simplify billing and return to your paid work. Remote can help with this.

With Remote, you no longer need to rely on spreadsheets, email and other manual tools to collect payments. Our platform lets you create invoices, submit them for approval and be paid in your local currency without needing additional software. That means no more email back-and-forth; you simply upload your invoices to Remote. We’ll route them to your clients and you’ll receive status updates as each invoice moves through the approval process.

Setting up billing

As a contractor you submit invoices to clients via your Remote dashboard. You can do this in one of two ways:

1. Upload your own invoice

Prepare an invoice that shows the invoice date and total amount, then submit it as a PDF.

2. Create an invoice on Remote

Use our templates to create invoices on the platform. You can also set up a recurring invoice that is sent automatically to your employer.

To learn more, see this article in our Help Centre.

Managing independent contractor tax obligations

As an independent contractor you are responsible for paying your own taxes. Tax rules differ between countries, so duties are handled differently depending on jurisdiction.

In the United States, for instance, you pay taxes directly to the government. In other countries, clients may be obliged to deduct tax from your payment. For specific details about tax obligations for contractors in your country, visit Remote’s Country Explorer page.

This is one reason why correct classification matters: it affects how you pay tax.

Liability considerations for independent contractors

When you are an employee, the company manages liability matters. However, as a sole trader you are personally liable for finance and tax debts; this means private assets can be used to settle business debts. To mitigate this risk, many independent contractors take out liability insurance.

It is also important to protect yourself legally when drafting and signing agreements. Remote’s legal experts vet our contract templates to help ensure you are compliant in the country where you work.

Accounting requirements for independent contractors

As an independent contractor you do not need to publish annual financial statements. You must, however, keep organised records of your accounts, including client invoices and business purchases, so you can track income and manage tax affairs.

You can manage these records yourself using accounting or bookkeeping software, or engage a professional bookkeeper or accountant.

Consider opening a separate bank account for business expenses; some countries may require a business account once your turnover exceeds a specified threshold.

How do I ask the company I’m working with to convert me into an employee?

Open a dialogue with your client and explain the risks and benefits of moving to an employer–employee relationship. Be clear about how the change could help both parties—not just you. There are several reasons a company might wish to convert you to an employee. For example, you might point out that the client would gain more control over the hours you work and how tasks are completed.

Listen to client concerns carefully. International clients may be reluctant to hire you without a local legal entity. In that situation, suggest they use an Employer of Record (EOR).

An EOR is a company that helps employ workers in other countries by acting as the local employer on a company’s behalf. Typically, an EOR will also manage HR administration, including local payroll, benefits administration and tax compliance.

Remote, for example, is an EOR and can help ease the transition by keeping your client (or employer) compliant with local laws.

To learn more about advocating for yourself as a remote worker, download our Remote Toolkit.

Five ways Remote makes life easier for contractors and their clients

There’s a lot to consider when setting up as an independent contractor. Remote can help with many of these challenges, letting you concentrate on growing your business and delivering for your clients. Here’s how:

Learn more about how Remote can help you as an independent contractor here.

Onboard with Remote and get set up in minutes

Having the freedom to work on your own terms is liberating, but administrative responsibilities can distract you from what you want to be doing: supporting your clients, getting paid promptly and growing your business.

By using a stable, trusted platform such as Remote, you can handle these obligations quickly and efficiently, allowing you to focus on your business objectives.

Our platform makes it quick and straightforward to get started as an independent contractor — we guide you through onboarding and the steps required to verify your identity for security. You’ll also be prompted to upload any necessary tax documentation for secure storage.

Learn more about how Remote can save you — and your clients — time and resources.

Get started with Remote today.