One of the benefits of being a contractor is that, generally speaking, you have the freedom to work wherever you want – and that can include working in a different country.
But before you pack up your tools and say Auf Wiedersehen Pet, you should consider some of the implications and requirements of working overseas.
It’s worth remembering that all countries have their own tax and residency laws, some of which are very different from our own. To avoid double taxation, which is when income is taxed in two countries, contractors will need to open up a local presence. Following specialist local tax advice in the country in which you are working is always highly recommended.
Contractors will also need to make sure they have a competent supply chain and labour force available to undertake the work, and this brings with it added issues such as sourcing sufficient accommodation, meeting visa requirements and securing health insurance.
Payments and currency risk
Payments due on projects in the UK are afforded legislative protection by way of the Construction Act; however, this legislation will not apply overseas.
In the Middle East for example, there is no statutory framework governing payments, and a company that is owed money is usually left to try to seek recovery under the applicable laws of the relevant country, which can often prove difficult.
“Further factors need to be considered when assessing health and safety risks overseas, particularly where cultural and religious festivals are commonplace”
If you are settling the contract payment in a different currency, you will need to consider the stability of that currency and make allowances for fluctuations in exchange rates. In times of economic instability, considering the possibility of changing exchange rates in advance is vital.
Health and safety issues
It goes without saying that local health and safety legislation will need to be complied with, but depending on the country in question, contractors may find that compliance with British legislation means they are well placed to meet local standards.
However, further factors need to be considered when assessing health and safety risks overseas, particularly where cultural and religious festivals are commonplace. In Islamic countries, for example, the religious festival of Ramadan can have an impact on normal working hours and overall productivity.
So, while there could be lucrative contracting opportunities abroad, especially given the current uncertainty in the UK construction market, there are a number of important issues to consider before embarking on any foreign project.
James Williams is a partner specialising in construction matters at Acuity Legal