How to set up as a freelance contractor
Embrace the freedom of freelancing, and remove the weight of administrative tasks
Invoicing, taxes, contracts, and even simply getting paid can feel daunting when you’re operating on your own. Thankfully, there are practical solutions to cut out the time drain and frustration of admin work. Use this guide as your practical blueprint to accept payments quickly and confidently so you can return your attention to what truly matters: serving your clients.
How to set up the right business registration
Setting up contract agreements for new clients
How to get paid as an independent contractor
How to manage and monitor invoices
Managing independent contractor taxation obligations
Liability considerations for independent contractors
Accounting requirements for independent contractors
How do I ask the company I’m working with to convert me to an employee?
5 ways Remote makes life easier for 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 to remove tedious admin
As an independent contractor, you are responsible for overseeing everything related to your business: finding and keeping clients, delivering projects, handling administrative duties, and marketing. You’re also accountable for tasks outside your comfort zone, such as drafting contracts and sorting out taxes.
Drafting a contract can be unnerving if you’re unsure which employment laws apply to your work, particularly when your client is overseas. You may also worry about receiving payments without being hit by large processing charges that eat into your earnings.
We want to reassure you that you can manage these responsibilities. In reality, setting up and getting paid as a freelance contractor can be quick, straightforward, and dependable — regardless of where your clients are located.
This guide offers practical advice for independent contractors, especially if you’re new to running your own business. We outline how to create a repeatable process to manage your work and explain how automation can streamline those routines.
We’ll cover the four most daunting areas freelancers face and provide clear steps to manage each aspect with confidence:
Contracts
Payments and fees
Invoicing
Tax
Ready to learn more about simplifying your freelance business? Let’s begin at the beginning: setting up your business.
How to set up the right business registration
Before you begin operating as an independent contractor, you must select the legal structure for your business. That choice determines your tax and legal duties. Which structure is right for you depends on the country where you declare tax residency, since each jurisdiction (and sometimes region) has its own rules for independent contractors.
Most countries provide a few common structures
Individual entrepreneur. This is a straightforward option for solo independent contractors. In some jurisdictions, such as France there is a legal difference between the individual and the business; in other countries there may be no such distinction.
Partnership. A business formed by two or more people under a partnership agreement. Often, partners and the business are not legally distinct.
A limited liability company. A formal legal entity that’s separate from the person running it. Generally, profits and losses belong to the company rather than to you personally.
Depending on your country, other structures may be available. For instance, Australia, for example, has trust arrangements where a trustee operates the business on behalf of beneficiaries.
Each structure carries pros and cons, but many independent contractors favour the individual entrepreneur model because it’s typically easier to establish and manage.
For country-specific labor and legal guidance, consult Remote’s Country Explorer — our global hiring guides are full of practical information to help you formalize your freelance operations.
Read more on how to become an independent contractor
Contractor Management
Setting up contract agreements for new clients
Many contractors feel uneasy about drafting client contracts and may find the task daunting, especially when it falls outside their expertise. Some might even consider skipping a contract altogether.
Skipping a contract is, however, ill-advised. Contracts are essential because they protect you in numerous ways. Typically, a contract will cover:
Contracts spell out specific tasks, deliverables, and project requirements. This prevents scope creep and ensures you’re not expected to perform work beyond what was agreed without appropriate compensation.
Contracts set out clear payment terms, including the amount, payment method, and any milestones or deadlines that apply.
Contracts address ownership and rights over intellectual property produced during the engagement. Clear IP clauses protect you from future disputes.
Contracts explain the conditions and procedures for terminating or suspending the agreement, helping shield contractors from abrupt cancellations.
Contracts clarify the working relationship between contractor and client, protecting both parties from possible misclassification issues.
Although contracts are valuable, they can be complex because contractor rights and conditions vary worldwide. If you rely on a random template or draft your own without guidance, the contract may not be enforceable in certain countries and could even disadvantage you.
Contractors can ensure their agreements with local and international clients are lawful by using one of Remote’s compliant, tailored contract templates. These templates are adapted to reflect country-specific legislation so you remain compliant no matter where the client is located.
If you already have a contract you trust, you may continue using it. When you onboard as a contractor on the Remote platform, you can upload your own documents rather than using ours.
Learn more about contracts here.
More on independent contractor agreements
Independent contractor agreements: a guide for businesses
The dangers of contractor misclassification
In almost every jurisdiction, independent contractors are classified differently than employees. Many of the protections employees receive—like health care, pensions, and stock options—do not usually apply to contractors. By choosing to be an independent contractor, you trade some benefits for the freedom to select clients and control your schedule and working methods.
Even with that distinction, some organisations may deliberately misclassify contractors to avoid obligations; in other cases it happens inadvertently. Whether intentional or accidental, misclassification can lead to penalties and fines for both you and your client. Your client may face significant fines in their jurisdiction, and you could be held accountable for unpaid taxes in your country.
Keep in mind it’s in your best interest to be correctly classified as a contractor.
Firstly, contractors usually have the freedom to determine how they work. In the United States, for instance, companies cannot dictate how contractors perform tasks or set fixed working hours; the contractor controls when and how the project is completed. Secondly, being correctly classified gives you greater control over your earnings.
Penalties for misclassification differ by country. To avoid risk, work with clients to confirm that your engagement is correctly classified. Discuss responsibilities and review the arrangement periodically. If your role becomes more embedded in a client’s organisation over time, you can request conversion to an employee
Learn more about the dangers of misclassification in the following guides
Employee and independent contractor misclassification: Expert guide
The consequences of misclassifying employees as contractors
How to get paid as an independent contractor
As an independent contractor, you are responsible for issuing invoices and collecting your payments. That often means billing each client separately and accepting whatever payment method they prefer — an approach that can be slow and inefficient.
Some of the most common ways to collect payments include:
Bank transfers
Bank transfers — a movement of funds between two bank accounts. While typically fast, these transfers often come with significant service fees.
Direct deposits. A deposit straight into your bank account. Also fast, but may incur fees for the payer. This can become complex if you work with several clients or clients in different countries.
Paper checks. Physical checks can be deposited via mobile apps, but they are becoming less practical due to long processing times. They can also be lost or stolen.
Money orders. Money orders are a secure payment form available in many countries but are often inconvenient: you must buy them in person, and like checks they can be delayed, lost, or stolen. They can also appear suspicious since scammers sometimes use them.
Virtual wallets. E-wallets are growing in popularity and offer a speedy way to receive funds, but some clients may not support them and there are security considerations to weigh.
Digital transfer services like PayPal and Wise. These services are convenient and often include invoicing features. However, they may take a commission or apply unfavourable currency exchange rates, which can be substantial.
Alternatively, you can rely on a trusted provider like Remote. Our platform offers a simple, secure, and dependable way to get paid quickly in your local currency — with no hidden charges. Just add your bank account as a withdrawal method in your Remote dashboard, and client payments are deposited directly to your account.
You don’t need to keep refreshing the dashboard to check for payments: Remote emails you as soon as an invoice is paid. Learn more about how our platform can help with payments.
Your practical guide to freelance invoicing, plus a free template
How to invoice as a freelancer: an easy guide and a free invoice template
How to get paid by international clients
Cross-border payments are inherently more complex than domestic ones. Currency conversion, arranging wire transfers, and hefty processing charges can make accepting international payments stressful.
Remote simplifies this process. Our contractor management service covers more than 200+ countries and territories, enabling you to be paid in your chosen currency 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 settles all invoices in their own currency.
3. Payment is received
When Remote receives the funds, we convert them into your preferred currency before remitting the payout to you.
Contractors have two payout choices. You can save your bank account details directly on Remote, where payouts are powered by Wise, or you may connect a Stripe Connect account. You can update your preferred currency and payout details at any time.
What about fees?
We partner with several providers to keep pricing fast and competitive. We do charge your clients a $29 fee for payment processing, but as a contractor the only fee you incur is a mid-market currency conversion fee. If you’re paid in your preferred currency already, there is no fee at all.
More details on our charges are available in this support center article.
How to manage and monitor invoices
Invoicing as an independent contractor can be arduous. Many freelancers piece together a set of tools to manually create, send, and track invoices, which is inefficient. Manual workflows are slow, tedious, and prone to mistakes.
By automating your invoicing, you can simplify billing and return to revenue-generating work. Remote can assist with that.
With Remote, you don’t need spreadsheets, email chains, or other manual systems to invoice. Our platform enables you to create invoices, submit them for approval, and receive payment in your local currency without switching tools. Upload your invoices to Remote, we’ll route them to your clients, and you’ll get status updates as approvals progress.
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
Create an invoice that shows the invoice date and amount, then submit it as a PDF.
2. Create an invoice on Remote
Use our templates to build an invoice within the platform. You can also set up recurring invoices that are sent to your client automatically.
To learn more, see this article in our Help Center.
Managing independent contractor taxation obligations
As an independent contractor, you are responsible for paying your taxes. Tax regimes vary by country, so how taxes are handled depends on local law.
In the US, for example, you must remit taxes directly to the government. In other jurisdictions, clients might be required to withhold tax from your payment. For specifics on contractor tax obligations in your country, visit Remote’s Country Explorer page.
This is one reason correct classification matters: your status as a contractor affects how taxes are paid.
Liability considerations for independent contractors
When employed, companies typically manage liability. As a sole proprietor, however, you bear personal responsibility for business debts, including financial and tax obligations. That exposure means personal assets could be used to satisfy business liabilities. To mitigate such risks, many contractors obtain liability insurance for protection.
It is also important to protect yourself legally when negotiating and signing client agreements. Remote’s legal team reviews our contract templates to help ensure compliance with the laws in the country where you work.
Accounting requirements for independent contractors
Independent contractors are not generally required to publish annual financial statements. However, you must keep orderly records of your accounts, including client invoices and business expenses, to monitor income and fulfil tax obligations.
You can maintain these records yourself using accounting or bookkeeping software, or engage a professional bookkeeper or accountant.
Consider opening a separate bank account for business transactions; in some countries a business account becomes mandatory once turnover exceeds a certain threshold.
How do I ask the company I’m working with to convert me to an employee?
Start a constructive conversation with your client and carefully outline the risks and benefits of shifting to an employer–employee arrangement. Be explicit about how the change could benefit both parties — not just you. There are several reasons a company might wish to convert you to an employee. For example, you might explain that the client would gain control over your working hours and how tasks are carried out.
Listen attentively to your client’s concerns. International clients may be reluctant to hire you directly without a legal entity in your country. In such cases, propose that they engage an Employer of Record (EOR).
An EOR is a provider that helps companies employ workers in other countries by acting as the local employer on the company’s behalf. Typically, an EOR will also manage HR administration, payroll, benefits, and tax compliance locally.
Remote, for example, is an EOR and can smooth the transition while keeping your client compliant with your country’s regulations.
To learn more about advocating for yourself as a remote worker, download our Remote Toolkit.
5 ways Remote makes life easier for contractors and their clients
As you can see, there’s a lot to consider when setting up as an independent contractor. Remote can support many of these tasks so you can prioritise growing your business and delivering value to clients. Here’s how we help:
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 terms is empowering, but administrative duties can distract you from what you want to do most: help clients, get paid promptly, and grow your business.
By using a reliable, established platform like Remote, you can handle these obligations quickly and efficiently so you can stay focused on your business goals.
Our platform streamlines onboarding and makes getting started as an independent contractor fast and seamless — we guide you through identity validation for security and ask you to upload any required tax documents for secure storage.
Learn more about how Remote can save you — and your clients time and resources.
Get started with Remote today.