The Joys of International Freelancing?
December 6, 2010 8:20 PM Subscribe
I am US citizen, and the sole proprietor of a business offering software development and consulting services -- in other words, I'm a freelancer. However, I'm a bit of a nomad at the moment, doing a lot of international travel for pleasure, and am gradually picking up clients from first-world nations (UK, Canada, NZ, Australia). I'm curious about the legality (at a broad level, you are not my lawyer) of me working on my freelance tasks as I move around on non-work visas, especially when I may find myself in a country where I currently have an active client.
Asked anonymously in case I find out that I may be doing something wrong...
Assume I have an address in California, I'm getting paid in US Dollars, and I have someone managing my taxes back home. I work as an independent contractor, and the contracts seem business-to-business in nature. I'm NOT registered as a LLC at the moment, just a sole proprietor.
I deal with my existing clients through email, Skype, etc. and find new clients through referrals and LinkedIn.
Here is my current understanding of the situation:
If I'm physically in the USA, I'm allowed to take on projects for American clients, or foreign clients, and do as much work as I want. If I'm paying my taxes, and the foreign clients are clear to buy services from my company, there's no issue.
If I'm physically out of the USA, there doesn't seem to be any problem with me working on projects for my American clients. It also seems unlikely that New Zealand would care if I sit in a library in Auckland and do work for an Aussie client. There's a big difference between this, and me trying to get a cash-in-hand job at some local bar that should be going to someone with a legal right to work.
However, what if I'm in a country, working on contracts for a client from that country? For example, what if I'm passing through Australia doing work for a company based in Melbourne, while on a non-work visa? Is it OK to go to Ruby on Rails meetups and meet people who may want to hire me, in the official context of "purchasing services" from my foreign company?
The whole thing seems sketchy, since if I were not a knowledge worker with the ability to work remotely, the question would be phrased as: "Can I go into a foreign country as a tourist, go to a dishwashing convention and obtain work as a dishwasher without a work visa?" ... the answer to that one is obviously no.
Am I horribly mistaken? Is this just a perk of being a knowledge worker in the digital age, being able to divorce your physical location from your "official" place of business? It seems like a big loophole. The point of my travel is NOT business in a traditional sense... taking on contracts allows the "pleasure" to continue.
Feel free to email me at: foreign.freelancer@gmail.com
Asked anonymously in case I find out that I may be doing something wrong...
Assume I have an address in California, I'm getting paid in US Dollars, and I have someone managing my taxes back home. I work as an independent contractor, and the contracts seem business-to-business in nature. I'm NOT registered as a LLC at the moment, just a sole proprietor.
I deal with my existing clients through email, Skype, etc. and find new clients through referrals and LinkedIn.
Here is my current understanding of the situation:
If I'm physically in the USA, I'm allowed to take on projects for American clients, or foreign clients, and do as much work as I want. If I'm paying my taxes, and the foreign clients are clear to buy services from my company, there's no issue.
If I'm physically out of the USA, there doesn't seem to be any problem with me working on projects for my American clients. It also seems unlikely that New Zealand would care if I sit in a library in Auckland and do work for an Aussie client. There's a big difference between this, and me trying to get a cash-in-hand job at some local bar that should be going to someone with a legal right to work.
However, what if I'm in a country, working on contracts for a client from that country? For example, what if I'm passing through Australia doing work for a company based in Melbourne, while on a non-work visa? Is it OK to go to Ruby on Rails meetups and meet people who may want to hire me, in the official context of "purchasing services" from my foreign company?
The whole thing seems sketchy, since if I were not a knowledge worker with the ability to work remotely, the question would be phrased as: "Can I go into a foreign country as a tourist, go to a dishwashing convention and obtain work as a dishwasher without a work visa?" ... the answer to that one is obviously no.
Am I horribly mistaken? Is this just a perk of being a knowledge worker in the digital age, being able to divorce your physical location from your "official" place of business? It seems like a big loophole. The point of my travel is NOT business in a traditional sense... taking on contracts allows the "pleasure" to continue.
Feel free to email me at: foreign.freelancer@gmail.com
I would be more comfortable if you were minimally incorporated and your contacts were paying your business in CA. But I'm neither your lawyer nor your CPA. (On preview, russm's short form.)
posted by panmunjom at 8:54 PM on December 6, 2010
posted by panmunjom at 8:54 PM on December 6, 2010
It's complicated.
Doing work for you US-based employer (or in this case, yourself) while on holiday typically okay. Visiting an Australian-based client to say hi while you happen to be in the country is also probably okay.
But actually soliciting work from new clients, or discussing business with existing clients is definitely problematic - that makes it a business visit.
In New Zealand as a Business Visitor you do not need any special visa (as an American) provided your stay is less than three-months.
Australia is a bit more rigid on immigration in many respects so might be a little more difficult. If they find you entering the country with things like business-related documents, meeting schedules and professional reference materials while on a visitor.
If you are entering Australia with the intent to do any business while there then technically I think you need a 'Business Visitor' visa. Not a big deal though, as a US passport holder this is an 'ETA' (Electronic Travel Authority) which is free (although a AUD$20 processing fee applies). It allows you to meet with current and prospective clients, undertake informal training and engage in networking.
I'd say for Australia it's definitely worth the effort of applying for that visa. While it's unlikely to be a problem if you do those things on a standard tourist visa it is technically not allowed and could cause serious problems if you are found out (although as a minor infraction I suspect they'd let you apply at the border).
Having just about been denied entry to Fiji after making a not-entirely-accurate statement about my purpose for entry (following the advise of my employer) I highly recommend being as honest as possible with immigration at all opportunities.
posted by sycophant at 12:47 AM on December 7, 2010
Doing work for you US-based employer (or in this case, yourself) while on holiday typically okay. Visiting an Australian-based client to say hi while you happen to be in the country is also probably okay.
But actually soliciting work from new clients, or discussing business with existing clients is definitely problematic - that makes it a business visit.
In New Zealand as a Business Visitor you do not need any special visa (as an American) provided your stay is less than three-months.
Australia is a bit more rigid on immigration in many respects so might be a little more difficult. If they find you entering the country with things like business-related documents, meeting schedules and professional reference materials while on a visitor.
If you are entering Australia with the intent to do any business while there then technically I think you need a 'Business Visitor' visa. Not a big deal though, as a US passport holder this is an 'ETA' (Electronic Travel Authority) which is free (although a AUD$20 processing fee applies). It allows you to meet with current and prospective clients, undertake informal training and engage in networking.
I'd say for Australia it's definitely worth the effort of applying for that visa. While it's unlikely to be a problem if you do those things on a standard tourist visa it is technically not allowed and could cause serious problems if you are found out (although as a minor infraction I suspect they'd let you apply at the border).
Having just about been denied entry to Fiji after making a not-entirely-accurate statement about my purpose for entry (following the advise of my employer) I highly recommend being as honest as possible with immigration at all opportunities.
posted by sycophant at 12:47 AM on December 7, 2010
Hold on you're misconstruing something here -- "It also seems unlikely that New Zealand would care if I sit in a library in Auckland and do work for an Aussie client." -- you clearly are using local services, services paid for by local taxpayers while supporting that Aussie client. You didn't pay for that library, local taxpayers did. So on a moral level that position is lacking. If New Zealand knew you were working while in their country they most certainly would tax you and they would be correct to do so (speaking as a long term ex-pat).
But will you get caught doing this, assuming you're not loose lipped (as I've known some folks to be)?
Well, it all comes down to the size of the engagements you're undertaking. If they are above a certain size, then you're going to have a problem. Maybe not immediately, but certainly down the road.
Don't presume just because you're getting paid back in the United States that your actions are invisible to the countries you're passing through (a working in). Tax treaties exist that agree how taxes are handled between countries in situations like the one you've described. Mutual Legal Assistance Treaties exist to insure that that facilitate the sharing of data between countries to insure that taxable revenue doesn't disappear between international borders.
In spite of what you see in public, one thing many nations will cooperate on is taxes. This cooperation takes many forms, one of which is information sharing. Since you're presumably disclosing the source of your income on any tax filings (and if you're not they're gonna ask) to insure you're capturing the benefit of any foreign taxes paid (e.g., VAT), not only does the United States government know but they may (in this paranoid day and age that means they will probably most certainly) be making inquires with the countries that you're generating the revenue in.
If you're generating above a specific size of revenue then this might trigger some queries. Those queries might take the form of a bill, or they could be purely informational only. What that threshold is nobody knows, but its likely to be very large.
So are you likely to have a problem? I've been living outside the United States since 1997 and have known many, many people who have done just as you're proposing to do. While none got caught on taxes (that I know of), a few had problems with visas, typically overstaying or Schengen related issues, while a couple had problems with immigration specifically not being able to show evidence of funds in the bank to support oneself while in the country. Don't make the mistake that a friend of a friend did while being queried, and offer up that although the money wasn't "yet" in the bank, you'll be working and will "soon" have the money.
That answer got him put on the next flight back to the United States.
posted by Mutant at 12:58 AM on December 7, 2010
But will you get caught doing this, assuming you're not loose lipped (as I've known some folks to be)?
Well, it all comes down to the size of the engagements you're undertaking. If they are above a certain size, then you're going to have a problem. Maybe not immediately, but certainly down the road.
Don't presume just because you're getting paid back in the United States that your actions are invisible to the countries you're passing through (a working in). Tax treaties exist that agree how taxes are handled between countries in situations like the one you've described. Mutual Legal Assistance Treaties exist to insure that that facilitate the sharing of data between countries to insure that taxable revenue doesn't disappear between international borders.
In spite of what you see in public, one thing many nations will cooperate on is taxes. This cooperation takes many forms, one of which is information sharing. Since you're presumably disclosing the source of your income on any tax filings (and if you're not they're gonna ask) to insure you're capturing the benefit of any foreign taxes paid (e.g., VAT), not only does the United States government know but they may (in this paranoid day and age that means they will probably most certainly) be making inquires with the countries that you're generating the revenue in.
If you're generating above a specific size of revenue then this might trigger some queries. Those queries might take the form of a bill, or they could be purely informational only. What that threshold is nobody knows, but its likely to be very large.
So are you likely to have a problem? I've been living outside the United States since 1997 and have known many, many people who have done just as you're proposing to do. While none got caught on taxes (that I know of), a few had problems with visas, typically overstaying or Schengen related issues, while a couple had problems with immigration specifically not being able to show evidence of funds in the bank to support oneself while in the country. Don't make the mistake that a friend of a friend did while being queried, and offer up that although the money wasn't "yet" in the bank, you'll be working and will "soon" have the money.
That answer got him put on the next flight back to the United States.
posted by Mutant at 12:58 AM on December 7, 2010
Seconding what sycophant says for Australia. I'm not an immigration officer or lawyer, but I have friends who are and the process as it's been described to me is:
If you come through immigration with a tourist visa and the officers on duty have any reason to suspect that you will be engaging in business or work activities in Australia, they will search you and your bags, question you, and look into your finances. If they find any work related materials at all, or a shortage or cash, or you mention that you're going to meet with a client, it's quite likely they'll cancel your tourist visa on the spot. Then you're likely to be detained until you pay for your own flight home.
The upshot is that it's just much easier to get the business visa in the first place.
posted by Ahab at 2:23 AM on December 7, 2010
If you come through immigration with a tourist visa and the officers on duty have any reason to suspect that you will be engaging in business or work activities in Australia, they will search you and your bags, question you, and look into your finances. If they find any work related materials at all, or a shortage or cash, or you mention that you're going to meet with a client, it's quite likely they'll cancel your tourist visa on the spot. Then you're likely to be detained until you pay for your own flight home.
The upshot is that it's just much easier to get the business visa in the first place.
posted by Ahab at 2:23 AM on December 7, 2010
If those stupid 'Airport' and 'Border Control' television shows have taught me anything, it's "don't fuck with Aussie or NZ customs/immigration". Just get the business visa, it will save aaaaall sorts of hassle. Actually, why wouldn't you just get the proper visa?
posted by coriolisdave at 2:56 AM on December 7, 2010
posted by coriolisdave at 2:56 AM on December 7, 2010
having had a brief look at the legalities of Australians visiting either Japan or New Zealand for work, I suspect my anecdata above probably aren't at all representative of the requirements on a US citizen visiting Australia. also, I hadn't considered the difference between a work visa and a business visa.
given all that, just call the embassy/consulate for wherever you're off to next and ask them.
posted by russm at 3:45 AM on December 7, 2010
given all that, just call the embassy/consulate for wherever you're off to next and ask them.
posted by russm at 3:45 AM on December 7, 2010
I would follow russm's advice and call the consulates.
Mutant's story makes a good point: are you there to earn money, or are you there as a self-supporting tourist who will be doing telecommuting or coding/writing/designing in the evenings? I don't know what the law is, but it seems like a relevant difference.
posted by gjc at 7:28 AM on December 7, 2010
Mutant's story makes a good point: are you there to earn money, or are you there as a self-supporting tourist who will be doing telecommuting or coding/writing/designing in the evenings? I don't know what the law is, but it seems like a relevant difference.
posted by gjc at 7:28 AM on December 7, 2010
an extra suggestion - if you call the consulate and they say "yeah no worries, just enter on a tourist visa and you'll be right", then be sure to record the time & date, and the name of the person you spoke to. I had a pretty unpleasant experience entering the UK a few years ago after getting bad advice from the High Commission here, and they weren't impressed with my responses.
immigration officer: why do you not have the correct visa?
russm: I was told I could sort that out once I got here.
immigration officer: nobody would have said that - it's not correct. who did you speak to and when?
russm: I dunno, the woman they put me through to, a month-ish ago.
yeah, that didn't go well...
posted by russm at 1:28 AM on December 8, 2010
immigration officer: why do you not have the correct visa?
russm: I was told I could sort that out once I got here.
immigration officer: nobody would have said that - it's not correct. who did you speak to and when?
russm: I dunno, the woman they put me through to, a month-ish ago.
yeah, that didn't go well...
posted by russm at 1:28 AM on December 8, 2010
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a data point: I and people I know have traveled for work as employees of local companies with foreign customers and not needed work visas while being perfectly clear about the purpose of the trip with passport control in the destination countries.
I'm not sure if/how your sole proprietorship makes a difference, and there's probably also a difference between telling passport control somewhere that you're traveling for work and having a return ticket booked in a fortnight, and arriving claiming to be a tourist with a 2 month "just hanging out seeing the sights" itinerary.
short form - as long as any work you get is handled through your US trading entity then I suspect you're OK (at least from a visa perspective).
posted by russm at 8:43 PM on December 6, 2010