Contractor services available in many jurisdictions

Listed below are some of our most popular jurisdictions for our contractor services.  Kindly contact us for information on any jurisdiction not listed.

Belgium

Summary

Belgium is an extremely popular location with international contractors. Only an hour from London by air, the capital Brussels is home to many thriving international expatriate communities.

Brussels is the location of numerous European Union institutions, including the European Parliament and European Commission. With more than 160 embassies it ranks as the second largest diplomatic city in the world where around 30% of its inhabitants are nationals of other countries.

The country has three official languages, French, German, and Flemish (itself quite similar to Dutch). English is quite widely spoken and many Belgians speak it reasonably well. It is an advantage if you speak some French, although it's not essential.

Chesterfield Management provides a wide array of Accounting Solutions for contractors in Belgium. If you work as a contractor, or on a Freelance basis, where your work places you on a clients site you will usually need to invoice through a compliant company structure. Our dedicated staff have a thorough understanding of contractors needs and are professionally trained to provide the most appropriate solutions tailored to your personal circumstances. 

Taxation Issues

Should you work in Belgium for 183 days you may be considered resident in Belgium for tax purposes from the date of your arrival.

Both Belgian income and corporate taxes and social security can be significantly higher than their equivalent UK or Ireland rates.  Social security legislation called Limosa has been in place since 1st April 2007 and requires contractors working in Belgium to pre-register and obtain a certificate before commencing work.  A new certificate is required if you change or renew/extend a contract. Often employees and agencies require detailed paperwork which can be complex.

Deductions in lieu of expenses are also possible at a flat rate, for contractors with higher expenses this may be available provided they are documented and accompanied by receipts.

It is therefore often advisable to operate through a specific arrangement for Belgium from the very beginning, especially if you are unsure of the duration of your stay.

The Contract Market

Along with 120 international organisations and 1400 international non-governmental organisations, Belgium is also the European headquarters for several international companies and many software houses are based in Belgium.

Contracting has become increasingly popular in Belgium to fill its vacancies and skill shortages. The majority of contractors work in Belgium’s two main cities, Brussels and Antwerp. However, opportunities also exist in regional centres including Maastrict and Ghent.

In Belgium your agency and client will require that you operate via a registered scheme and our contractor managers can advise on the best route for you. Our mission is to ensure that all our contractors are paid as quickly as possible and our hassle free approach to business and our innovate use of the latest technology frees up your time and saves you money.

Relocating to Belgium

 Brussels has a wide range of good quality rental accommodation available and there is usually no shortage of rented accommodation for long or short term lets at reasonable rents. Rental property is usually well furnished and equipped with TV, video and stereo normally included as standard.

Rental costs in Brussels vary. You can expect to pay Euro 250 - 350 for a studio apartment or Euro 450 - 850 for a one bed roomed apartment in Brussels. If your accommodation needs are greater, for example if your family joins you, you should be able to find a 2 - 3 bed roomed apartment for Euro 1000 - 1500.

Whilst it is usually more economical to rent furnished accommodation, like most diplomatic cities, household furniture is available on a rental or lease basis.

Brussels is a popular location for contractors with families and there are several schools for all ages such as "The British International School".

Healthcare is also available and the system is split between state and private, contributions are payable to both.

Traveling to Belgium

Belgium is very accessible by air, sea, road and rail. There are daily flights from the UK and Ireland to Brussels and Antwerp, supported by a number of major airlines including British Airways, British Midlands, VLM and Ryan Air.  Ferry and rail services provide easy access from the UK and also allow you to bring your own car.

Belgium has a very good public transport system. The Metro or underground in Brussels is the best way to travel and there are also fast and reliable rail links to most destinations in Belgium.

Germany

Summary

Germany is the largest country in Europe, located in the centre and bordered by France, Luxembourg, Belgium, the Netherlands, Denmark, Poland, the Czech Republic, Austria and Switzerland. Germany has long been the top destination for international contractors. English is widely spoken and many Germans speak it reasonably well. It is an advantage if you speak some German, but not essential.

Taxation Issues

All residents of Germany, including the Germans themselves are required to register their presence with the local authorities. Should you work in Germany for 183 days you may be considered resident in Germany for tax purposes from the date of your arrival. The tax year and the calendar year run from January to December. Income tax and social security taxes in Germany can be quite high compared to the UK, Ireland and the USA.

The schedule of tax free allowance in Germany is notoriously complex and there are different rates and bands dependent upon your personal circumstances and the region in which you are living. It is always preferable for the first time expatriate resident in Germany to seek professional assistance when filing their tax returns.

The Contract Market

The contract market in Germany centres on Frankfurt and Munich although Stuttgart and Dusseldorf also have much to offer. It is one of the most popular markets in the world with many opportunities available. Frankfurt is the most popular location for "first time” contractors mostly because of its vibrant expatriate community. There are lots of bars and restaurants in these areas, including Irish, Australian and South African.

Relocating to Germany

All of the key contracting locations have a wide range of good quality rental accommodation. Rental in Frankfurt (the most popular location), if you are not too fussy, in one of the cheaper areas costs approximately Euro 350 per month for a one bedroom apartment. If your accommodation needs are greater or if you want to live in a more pleasant location, you should be able to find a pleasant 2 - 3 bed roomed apartment from Euro 800 – 1000 per month.

Traveling to Germany

The London to Germany flight route is one of the most competitive in Europe and you should expect to pay around Euro 150 for a return flight. There are usually special offers to be had at off-peak times. There are also good rail links to Germany for those who favour travelling by land and ferry crossings available for those who prefer the sea.

Greece

Contracting in Greece

Greece is located in Southeast Europe and is known as a crossroads between Europe, Asia, the Middle East and Africa. Ancient Greece is attributed as the cradle of Western Civilization as it is credited with the birth of various aspects of modern day life such as democracy, philosophy, literature, political science, maths and drama.

Greece is a founding member of the United Nations, has been a member of the European Union since 1981 and has been a member of NATO since 1952 so has a long history as an integral part of Europe. It is also on the council of Europe, is a member of the International Monetary Fund and the World Trade Organisation. Greece adopted the Euro in 2001 replacing its local currency the drachma.

Greece’s economy is the largest in the Balkans, with the service sector and industry being the main contributor. It ranks high for a developed information and communications infrastructure which may be why a number of multinational corporations such as Ericsson, Siemens and Motorola have their regional research and development headquarters there. Greece is one of the most visited countries in Europe and ranks quite high when compared to worldwide destinations and so tourism is also a major contributor. Greece has one of the largest merchant shipping fleets in the world and is a significant exporter of agricultural produce to Europe.

Greece has one of the longest coastlines in the world and consists of approximately 1,400 islands and has numerous ancient historical sites so is a popular place to live for those who like to be by the sea and enjoy culture. Inland you can find beautiful mountain scenery. It is known for its carefree lifestyle and what with having so many islands and being the crossroads between so many continents offers a great many travelling opportunities.

Due to some major projects in Telecommunications, Oil & Gas and IT Greece has been increasing in popularity with international contractors. However, there is a considerable amount of red tape when considering working and moving to Greece which is why Chesterfield’s payroll solutions can be of great comfort to anyone looking to kick back and enjoy the country and the relaxed way of life that Greece has to offer.

Residency/Registration

The requirements to live and work in Greece differ significantly depending on where you are from.

If you are from a member country of the European Union or the European Economic Area then you do not need a permit to work or live in Greece. However if you intend to stay for more than ninety days you must register at the local Aliens bureau, which are usually found at police stations and they will issue you a certificate of registration. If you reside in Greece for longer than ninety days without registering you will be subject to a fine. This does not cost you anything, the certificate of registration is issued same day and is unlimited.

In order to apply for this you must bring the following documentation;

  • Passport or identity card with two copies
  • 3 x passport photos
  • Proof of medical insurance with two copies
  • Certificate from employer if applicable, or proof that you have sufficient finances to support yourself with two copies
  • Address verification for your residence in Greece i.e. rental agreement with two copies (if you are staying with someone you must bring a statement from them and documentation to support that this is their residence)

They are quite rigorous with the paperwork and procedure, so do have everything in order before you go and expect this to take some time.

If you stay continuously in Greece for five years or marry a Greek national then you can apply for a Permanent Residence Certificate.

If you are not an EU citizen then it is likely that you will need a Visa to enter Greece, this must be obtained at the Greek Consulate General or Embassy before entering Greece. Certain nationality’s like Americans, Canadians and Australians can visit Greece without a visa providing that their stay does not exceed ninety days in a one hundred and eighty day period. If you are intending to stay for more than ninety days then you will need to apply for the appropriate long stay visa and you will need to apply for a Residence Permit at least two months prior to the expiration of your entrance visa. Certain types of Residence Permits include permission to work and so a separate work permit is not required.

There is a lot of paperwork required for the application for your Residence permit. This paperwork must be in Greek and therefore official foreign documents must be translated by a lawyer, the Greek Foreign Ministry’s Department of Translation or a certified translator. In order to get a work permit in Greece you need to be sponsored by an employer for a specific position, this position has to be one that could not be filled by a Greek or EU applicant. It should be noted that applying for a permit based on this offer can take some time.

Greece, not unlike certain other countries is trying to encourage foreign citizens in a certain wealth bracket to reside in Greece. They have done that by offering non-EU foreign citizens residency permits providing that they purchase property in Greece of a minimum value of 250,000EUR. This is granted for five years, but is renewable providing that the property remains in their possession. There are also residence permits available for individuals who offer certain investment prospects.

Income Tax

Earlier this year Greece amended its tax laws. One of the outcomes of this is that it has reduced its existing eight tax brackets to only three.

  • There is no tax free bracket
  • Income up to 25,000EUR – 22%
  • Income up to 42,000EUR – 32%
  • Income exceeding 42,000EUR – 42%

There is a tax credit of 2,100EUR to employee’s with an annual income up to 21,000EUR. This tax credit is also given to employees on an annual income of between 21,000 with the maximum credit of 2,100EUR and 41,500 where it is reduced by 100EUR for every additional 1,000EUR of income over 21,000EUR. There is no tax credit for employees earning an income exceeding 41,500EUR.

There are very few deductions allowed, but some of these include medical and hospital expenses, alimony and donations. Non-Greek tax residents are not eligible for any credits or deductions except for EU citizens who earn more than 90% of their worldwide income in Greece. There is an obligation in Greece to collect living expenses receipts and submit these with your tax return. If you submit your tax return online you should still retain your receipts in case of audit. Failure to produce these receipts will result in a 22% penalty on the outstanding value of receipts not produced. Receipts issued in any EU country will be accepted.

You are considered a permanent resident of Greece if you are domiciled there for at least one hundred and eighty three days within the tax year. In this instance you will be subject to taxation on your worldwide income. If you can submit documents proving that you are resident abroad then you will only be subject to taxation on income earned in Greece.

Social Security

When working in Greece you must pay social security. EU citizens are entitled to the same social security benefits as a Greek national. Members of your family who are living with you in Greece will also be entitled to the same benefits as family members of a Greek worker. There are also bilateral agreements in place with various non EU countries.

The employers contribution in Greece usually amounts to 28.06% whilst the employee contribution is 16%.

There are various insurance institutions in Greece who handle social security and as there is no single legislative framework governing these conditions and documentation do vary throughout. You must register with an appropriate insurance institute when working in Greece, you will then be able to present your employer with a certificate of registration. You will then have your social security number and be able to obtain a health booklet. Benefits are normally subject to amount of days worked, but these can include periods in another EU Member State.

In order to claim sickness benefit you must present;

  • Your personal social security account statement
  • Your health booklet
  • A statement from your employer detailing the time you have been off work
  • A certificate from your doctor that you are unable to work

Employment Rules

When referring to the laws applicable to foreign nationals working in Greece there are several regulations to be taken into account;

  • The Constitution
  • International Treaties
  • European directives and regulations
  • The Civil Code
  • Specific employment laws
  • Collective agreements
  • Internal company regulations

You are able to choose the law of a different jurisdiction to govern your employment relationship as long as this abides by all mandatory rules, but it should be noted that as there are so many rules in Greek employment legislation this can become very difficult. A written employment contract is generally not necessary in Greece. Although for temporary employees this must be in place.

There are several aspects of the employment that need to be set out by the employer and advised to the employee before work commences. These have Greek legislation that sets out mandatory rules;

  • Employers full identity
  • Work Location
  • Employees position and responsibilities
  • Duration of the employment
  • Severance and notice obligations –This again depends on how long the employee has worked for the company. If it has been between one and two years then it is one months notice, if this is between two and five years then it is two months notice. The employer has the option to give notice to the employee or terminate immediately, if they terminate immediately then legal severance is due
  • Salary and payment terms – by law the annual monthly minimum wage is 683.76EUR
  • Bonuses and benefit
  • Working hours – by law employees must not work more than a 40 hour week or ten hours a day. Hours over this time must be paid at overtime rates.
  • Annual leave – this depends on how many days you work and how long you have worked for the company, but the lowest is usually 20 days. In addition there are four annual paid public holidays Christmas day, the second day of Easter, 15 August, 25 March. The 1 May and the 28 October are optional paid public holidays.

Time off for injury or illness is based on the amount of time you have worked for the company. If it is less than four years this is one month.

Normally there are restricted covenants upon termination concerning what is known as competitive activities. This is when you leave your employment and engage in any of the following;

  • Establishing a company that engages in identical activities
  • Co-operating with a competitor
  • Defaming the previous employers products or services
  • Soliciting the employers clients

Banks

EU citizens are covered by the EU legislation and can open an account in any other EU-member country providing they can produce the appropriate documentation. The documentation required in Greece is as follows;

  • Passport or identity card
  • Proof of address
  • Statement declaring that the account will not be used for trade
  • Copy of tax statement (only if an overdraft is required)

Many banks in Greece will require a minimum opening balance.

Greek banks open Monday to Thursday from 8.00-14.30. They usually close early on a Friday. In some of the larger cities it is possible to find branches that operate weekend hours.

If you require a credit card you will need to produce;

  • Passport or Greek identification card
  • Tax number (AFM)
  • Letter of recommendation from your former bank

It should be noted that in the case of foreigners credit limits on cards are relatively low, but can usually be increased over time providing the account is being used responsibly.

When considering which bank to open your account with it is recommended to look at the service and interest rates first as these can be higher than banks in other countries and can vary quite significantly from bank to bank. Large Greek banks with presents overseas include Alpha Bank, Eurobank Erasias, National Bank of Greece and Piraeus Bank although you will find some familiar names in Greece such as HSBC and Barclays. If you have problems with your bank you can visit the Banking Ombudsman website which is there to deal with complaints.

Umbrella Companies

We have a number of different Umbrella companies to choose from depending on your own personal circumstances. The umbrella company essentially acts as an employer. There are various advantages to this. The umbrella company provides payroll services by billing the agency on behalf of the contractor and then distributing the salary back to the contractor.

Corporate Structures

Chesterfield are also able to incorporate companies in a number of jurisdictions in order to suit your needs. This is more expensive to set up and maintain than our umbrella or self-employed schemes, but can have its advantages. Once the contract provider or agency has been invoiced for the work and this has been paid into the company bank account the contractor has a choice as to whether they would like to collect their money as dividends or as salary. If they were to choose dividends then in Greece dividends are taxed at 25% withholding tax, which is due to be reduced to 10% come January 2014, and so depending on your tax bracket can offer an attractive alternative.

Chesterfield and contracting in Greece

Chesterfield has years of experience with contractors working in other countries and a variety of schemes and solutions in order to make life easier. You will be given a dedicated member of staff who is responsible for all your administration and contact, allowing them to be more in tune with all your needs and assist you in every way possible.

Ireland

Summary

Ireland’s proximity to the UK has made it one of the most popular contract locations for UK contractors since the introduction of the IR35. Ireland’s economic boom dubbed the "Celtic Tiger" has made it one of the most vibrant and technology driven economies in Europe.

It is located in Western Europe and the official languages are Irish (Gaelic) and English.

Chesterfield Management provides the widest range of Accounting Solutions for contractors in Ireland. If you work as a contractor, or on a Freelance basis, where your work places you on a clients site you will usually need to invoice through a compliant company structure.

Our dedicated staff have a thorough understanding of contractors needs and are professionally trained to provide the most appropriate solutions tailored to your personal circumstances.

Taxation Issues

The tax year in Ireland corresponds to the calendar year. In general, you may be subject to the Irish Tax system once you have worked in the country for 183 days.

Under the new tax system which came into force in April 2001 – "Tax Free Allowance" and "Tax Tables" have been replaced by "Tax Credits" and a “Standard Rate Cut-Off Point”. Tax credits can vary and are based on each individual’s personal circumstances.  There are also other levies payable which have been recently introduced but are comparatively small.

Our payroll solutions can be used by first time contractors, existing freelance workers, Irish workers working in a foreign country, Expatriates and foreign workers coming to Ireland. All in all this makes Chesterfield Management the only contractor management company that you will ever need.

Business expenses can be deducted from taxable income if wholly, exclusively and necessarily incurred in the performance of the duties. Chesterfield Management work closely with contractors to make sure they are able to claim all of the allowable expenses appropriate to their circumstances.

The Contract Market

Many multinational companies have used Ireland as their European base because of the favourable corporate tax regime and its position within the Euro zone. Ireland is Europe's largest exporter of computer software and is second only to the USA.

Compaq, Dell, IBM, Intel, Oracle and Microsoft are just some of the multinationals that have operations in Ireland. The international financial service centre, which is based in Dublin's docklands, also holds some of the world’s major financial institutions where groups such as Citibank, HSBC and Axa all have a presence.

Ireland is also used as a port hole by major companies to access the EU markets and many Irish firms are engaged in providing services and temporary assignments for workers overseas.

We provide a comprehensive range of contractor solutions in the Irish Contracting market including:-

·         Limited Company

·         Umbrella Company

·         Payroll processing

·         Expense reclaiming

·         Company formation

·         Contractors Insurance

Our mission is to ensure that all of our contractors are paid as quickly as possible and our hassle free approach to business and innovative use of the latest technology frees up your time and saves you money.

We tailor our structures to suit your needs and because of this our contractors can get the most appropriate and tax efficient solution for their business, so you can receive the most out of the money you earn. 

Relocating to Ireland

As with most European capital cities, accommodation is more expensive in the capital Dublin than elsewhere in the country. Rental costs for a 1-2 bed roomed apartment in Dublin city are in the region of Euro 750 - 1,500 whereas in the regions of Cork, Limerick and Galway, the equivalent apartment would cost Euro 525 - 1,275 per month.

Dublin is one of the most vibrant cities in Europe with a large variety of nightlife available as well as some interesting cultural excursions.

Ireland has a very good public transport system and it is considerably cheaper than its London equivalent. Dublin also has a suburban Rail System called the Dart.

Traveling to Ireland

Dublin is less than one hour’s flight from London. It is one of the most competitive routes in Europe and there are always special offers available. You should expect to pay in the region of Euro 150 for a return ticket, sometimes considerably less.

Most major UK Airports have scheduled services to Ireland and there are many connections available from mainland Europe.

Ireland is also easily accessible by sea with various ferry routes available.

Italy

Summary

Italy is located in the South of Europe bordered by France, Switzerland, Austria and Slovenia.  It also houses two states, the Vatican City and Monaco.  The official language is Italian but some regions have their own language and dialect, English is widely spoken.

It does not have a huge appeal for contractors due to its laws on temporary labour, but there are lucrative opportunities to be had.

Taxation Issues

Italian taxation is relatively straightforward; individuals may be regarded as tax residents if they are registered with the Italian civil registry for the majority of the tax year, if their centre of fundamental interests is in Italy or if their habitual residence is in Italy.  Salary tax is withheld at source.  Residents of Italy may be taxed on their worldwide income whereas non-residents are only taxed on Italian source income.

There are progressive tax rates payable but regional and municipal taxes may also apply in some areas.  Some expenses are deductible and can be reclaimed on your tax return.

The Contract Market

The majority of the contract market in Italy is based in the fields of IT, Telecoms, Oil and Gas.  There are also contracts available in the fashion industry.

There are few opportunities available but those that are can be very rewarding.

Relocating to Italy

Italy has a lot to offer.  It has a colourful history and is famous for its architecture and fine art.  Rome, The Vatican City and Venice are particularly fine examples of this.  There is also a thriving and vibrant fashion scene in Milan.

It has differing regions all with their own unique charm.

Traveling to Italy

Italy is easily accessible by plane or rail. There are many competitively priced travel routes available.

If you would prefer to drive to Italy it is reachable from almost any point in Mainland Europe.

 

Norway

Summary

Norway is an attractive location for international contractors.  It is located in Northern Europe in the western portion of the Scandinavia region.

English is widely spoken but the official Language is Norwegian or Norsk.  The currency used in Norway is the Norwegian Kroner.

Taxation Issues

All residents of Norway are required to register their presence with the local authorities. As soon as you live in Norway for 183 days you may be considered resident in Norway for tax purposes from the date of your arrival. The tax year and the calendar year run from January to December. 

Income tax and social security taxes in Norway are quite high but these pay for a number of high quality public sector services. Tax law in Norway is quite straightforward and employees of Norwegian companies get taxed at source.

It is always preferable for the first time resident in Norway to seek professional assistance before filing their tax returns.

The Contract Market

The majority of the contract market in Norway is based in Oslo and Bergen.  Work is available within a number of industries in Norway and there are a lot of international workers based there. 

It is the 2nd largest exporter of seafood in the world, trailing only to the People’s Republic of China and was rated the most peaceful country in the world in a survey conducted by the Global Peace Index in 2007.         

Relocating to Norway

This is a wide range of good quality rental accommodation available in Norway. Rental prices are reasonable compared with the rest of Europe.

For those who like winter sports it is also an ideal location with a wide range of activities available at affordable prices.

Traveling to Norway

Norway is most easily accessible by air. Other forms of travel are widely available but can be quite long winded depending on your starting point.

It also has a very good infrastructure of public transport making it simple for commuters.

Poland

Poland is in Central Europe and is bordered by Germany to the West, Czech Republic and Slovakia to the South, Ukraine and Belarus to the East, Lithuania and the Baltic Sea to the North, as well as Kaliningrad Oblast a Russian Exclave.

As you can imagine with this close proximity to so many neighbouring countries Poland’s history has been very colourful indeed. At its greatest in 1569 when the Polish-Lithuanian Commonwealth was established it occupied approximately one million square kilometres in Central Europe and was a great European power and major cultural entity. This ceased to exist in 1795 when Poland was partitioned. The reason for this partition can be attributed to the Constitution of 3 May 1791, which is known as the first of its kind in Europe which aimed to introduce political equality between townspeople and nobility.

The adoption of such a liberal constitution was seen as a threat by Prussia, Russian and Austria who formed an anti-Polish alliance and successfully partitioned and destroyed the Polish state. There followed several failed attempts to recreate the Polish state, but it was not until the First World War when allies agreed on the reconstitution of Poland as a reward for the Polish troops gallant efforts did Poland regain its independence as the Second Polish Republic. This again was to be short lived when at the start of World War Two Nazi Germany invaded Poland and this again was divided, this time into two zones, one occupied by Nazi Germany and one occupied by the Soviet Union.

During this time the population was decimated with more than six million Polish citizens losing their life, this was the highest percentage of all countries involved in the war, nearly one-fifth of Poland’s population. After the War Poland’s territory was shifted upwards and a new Polish provisional and pro-Communist coalition government was established in Moscow angering most Poles, it was not until 1989 that Poland was to get its first partially free and democratic parliamentary election and not until 1990 that a Solidarity candidate was to win the Presidency resulting in the collapse of communist regimes and parties across Europe.

Education and tolerance have always been strong pursuits in Poland. As early as the 12th century there are signs that Polish intellectuals had access to European literature. After the end of communism Poland has returned to these values transforming into a market economy with strong ties in Europe. Poland has become a member of the Vinegar Group, NATO, the EU, the Schengen Area, the UN, the World Trade Organisation, the EEA, the Council of Europe, G6 and The Council of the Baltic Seas States amongst others. This has allowed much greater movement in Europe.

The economy in Poland today is greatly improved in particular its agricultural prospects which are so promising as to be described as the ‘future bread basket of the European Union’. Poland is one of the biggest research and development hubs in Central and Eastern Europe. Poland is a high income economy and is considered to be one of the healthiest of the post-Communist countries and is one of the fastest growing within the EU. Poland has a strong domestic market, little private debt, a flexible currency and is not dependant on a single export sector. All this has contributed to Poland being the only European economy to have avoided the recession. Poland is one of the leaders in Central Europe when it comes to Foreign Investment due to restructuring and privatisation of many of their sectors. Poland is not yet a member of the Eurozone although some businesses do already accept payment in Euros.

Poland was not generally considered a destination for international contractors, but that looks set to change. Whilst wages remain relatively low there are many advantages to considering Poland, such as the cost of living is considerably cheaper, Poland has successfully avoid the recession, the pace of life is slower, Poland is renowned for its tolerance of other nationalities, violent crimes rates are much lower, beautiful architecture is in abundance and there are generally more holidays. So if you are looking to work abroad you could choose a lot worse than what is described as a country on the verge of prosperity.

Poland is in Central Europe and is bordered by Germany to the West, Czech Republic and Slovakia to the South, Ukraine and Belarus to the East, Lithuania and the Baltic Sea to the North, as well as Kaliningrad Oblast a Russian Exclave.

As you can imagine with this close proximity to so many neighbouring countries Poland’s history has been very colourful indeed. At its greatest in 1569 when the Polish-Lithuanian Commonwealth was established it occupied approximately one million square kilometres in Central Europe and was a great European power and major cultural entity. This ceased to exist in 1795 when Poland was partitioned. The reason for this partition can be attributed to the Constitution of 3 May 1791, which is known as the first of its kind in Europe which aimed to introduce political equality between townspeople and nobility.

The adoption of such a liberal constitution was seen as a threat by Prussia, Russian and Austria who formed an anti-Polish alliance and successfully partitioned and destroyed the Polish state. There followed several failed attempts to recreate the Polish state, but it was not until the First World War when allies agreed on the reconstitution of Poland as a reward for the Polish troops gallant efforts did Poland regain its independence as the Second Polish Republic. This again was to be short lived when at the start of World War Two Nazi Germany invaded Poland and this again was divided, this time into two zones, one occupied by Nazi Germany and one occupied by the Soviet Union.

During this time the population was decimated with more than six million Polish citizens losing their life, this was the highest percentage of all countries involved in the war, nearly one-fifth of Poland’s population. After the War Poland’s territory was shifted upwards and a new Polish provisional and pro-Communist coalition government was established in Moscow angering most Poles, it was not until 1989 that Poland was to get its first partially free and democratic parliamentary election and not until 1990 that a Solidarity candidate was to win the Presidency resulting in the collapse of communist regimes and parties across Europe.

Education and tolerance have always been strong pursuits in Poland. As early as the 12th century there are signs that Polish intellectuals had access to European literature. After the end of communism Poland has returned to these values transforming into a market economy with strong ties in Europe. Poland has become a member of the Vinegar Group, NATO, the EU, the Schengen Area, the UN, the World Trade Organisation, the EEA, the Council of Europe, G6 and The Council of the Baltic Seas States amongst others. This has allowed much greater movement in Europe.

The economy in Poland today is greatly improved in particular its agricultural prospects which are so promising as to be described as the ‘future bread basket of the European Union’. Poland is one of the biggest research and development hubs in Central and Eastern Europe. Poland is a high income economy and is considered to be one of the healthiest of the post-Communist countries and is one of the fastest growing within the EU. Poland has a strong domestic market, little private debt, a flexible currency and is not dependant on a single export sector. All this has contributed to Poland being the only European economy to have avoided the recession. Poland is one of the leaders in Central Europe when it comes to Foreign Investment due to restructuring and privatisation of many of their sectors. Poland is not yet a member of the Eurozone although some businesses do already accept payment in Euros.

Poland was not generally considered a destination for international contractors, but that looks set to change. Whilst wages remain relatively low there are many advantages to considering Poland, such as the cost of living is considerably cheaper, Poland has successfully avoid the recession, the pace of life is slower, Poland is renowned for its tolerance of other nationalities, violent crimes rates are much lower, beautiful architecture is in abundance and there are generally more holidays. So if you are looking to work abroad you could choose a lot worse than what is described as a country on the verge of prosperity.

Residency/Registration

If you are staying in Poland for longer than three months you need to apply to the relevant voivodship in the district in Poland where you will be staying, or via a Polish Consulate if you have not yet entered Poland. Once you have proved that your stay in Poland is justified you will receive a residence permit, these are valid for two years, but are renewable.

To apply for the residency permit you will need the following;

  • Application
  • Significant Circumstances
  • Justification of Stay
  • Four colour photographs 4,5cm x 3,5cm
  • Administration fee payment
  • Documents confirming source of income
  • Health Insurance

The voivodship can further demand additional documentation, such as;

  • Birth Certificate
  • Marriage Certificate
  • Certification showing that no commitments are held in relation to the Internal Revenue Office in your country of origin
  • Confirmation of lack of Criminal Record from your country of origin

Once you have stayed in Poland for five years without break on a temporary residence permit you may apply to the relevant voivodship for a settlement permit. To do so you must;

  • Demonstrate permanent family or economic attachment
  • Demonstrate ensured residence and living conditions
  • The overall aim is to prove that you are supported and will not require any social aid.

If you are not a citizen of an EU state you must obtain a work permit before engaging in employment in Poland. This must be applied for by your employer and will only be granted if there are no counter candidates suitable for the position among Polish citizens.

Income Tax

If you are resident in Poland then you must pay tax on your worldwide income there. However, if you stay in Poland for less than 183 consecutive days during the tax year then you will only be liable to pay tax on income earned in Poland. If paying on your worldwide income it is important to consider the various double taxation agreements that Poland has entered into and Polish domestic tax regulations to ensure that you are not paying twice.

Income tax in Poland depends on your rate.

  • If you earn up to 3091 PLN then your income tax is 0%
  • If you earn between 3091 – 85,528 PLN then your income tax is 18%
  • If you earn over 85,528 PLN then your income tax is 32%

There are tax allowances and deductions for certain types of expenditure. Under certain conditions you may choose to pay a flat rate of 19% on business income, but this will not permit any allowances.

Annual tax returns must be filed by the 30 April. However, if your salary is your only source of income your employer will have been deducting this and you will need only to submit a special form to your employer and then you will not be obliged to submit an annual tax return.

Other types of income tax will include capital gains if you are considered resident in Poland. Capital gains are usually added onto the regular income and charged at the same rates as above. However, if the gain is from the sale of a property that is being sold more than five years after it was then this will be exempt from tax. If this is sold within five years of purchase the tax rate is 19%. Gains on sale of shares and dividend and interest are also taxed at 19%.

Social Security

Social security in Poland covers EU citizens on the same basis as Polish citizens and consists of;

  • Old Age Pension
  • Invalidity Pension
  • Sickness and Maternity Insurance
  • Insurance against accidents at work and occupational diseases
  • Health Insurance
  • Family benefits
  • Social assistance
  • Unemployment benefit

The Social Insurance Institute (Zaklad Ubezpieczen Spolecznych, ZUS) have regional services that are responsible for sickness, maternity, pensions, invalidity, employment injuries and occupational diseases. ZUS will transfer a part of the pension insurance contribution to a pension fund of the insured individual’s choice.

Payments of benefits are usually subject to a percentage of the national average earnings as well as contributions so are somewhat variable.

The social security system works on a three pillar system, where the first and second pillar are obligatory and the third is not. Contributions are split between the employer and the employee. It is the employer that makes the actual payments to ZUS.

The following is an indication of how the contribution works;

Type of Insurance Employer contribution Employee Contribution Total
Pension Fund 9.76% 9.76% 19.52%
Disability Fund 6.50% 1.50% 8.00%
Bridging Pension Fund 0 or 1.5%    
Illness Fund 0% 2.45% 2.45%
Accident Fund 0.67% - 3.86% 0% 0.67% - 3.86%
Employees Guaranteed      
Benefits Fund 0.10% 0% 0.10%
Labour Fund 2.45% 0% 2.45%
       
Total 19.48 - 24.17% 13.76% 33.19 – 37.88%

In certain cases contributions may cease or change calculation if they have exceeded certain levels or by decision of social security authorities.

Employment Rules

The Polish Labour Code of 1974 sets out the rights and obligations of employers and employees. In addition to this there are also the following acts;

  • Minimum Pay Act
  • Temporary Workers Act
  • the Act on detailed rules of termination of employment relationships

The employment law is often also shaped by collective labour agreements between employers and trade unions. There is a National Labour Inspectorate that governs adherence to the Labour Law.

Working Hours - these are not to exceed 8 hours a day or 48 hours a week. Employees can receive additional remuneration or time off for overtime.

Annual Leave - full time employees are entitled to 20 days if employed for less than ten years and 26 days if employed for more than ten years.

Remuneration - Employees cannot renounce their right to remuneration or transfer this right to another person.

Minimum pay - for full time employees this is PLN 1,500 per month.

Termination - there are various forms of termination. If this is given by notice then the notice period depends on the employment duration, which is 2 weeks if an employee has been employed for less than six months and 1 month if employed for more than six months. Termination without notice can only be given if the employee or employer is at fault.

Any direct or indirect employment discrimination is unlawful regardless of the duration of the employment.

Banks

Poland is the only European country to escape the recession. This has put its banks in a very strong position indeed, especially when it comes to foreign investment.

Despite being a member of the European Union Poland has yet to enter into the single currency and still retains its national currency which is the Zloty. Preparations have been made for a number of years to enter into the single currency, but with recent troubles in the European market there are now some voices in Poland who are recommending that they should wait before entering the Euro Zone, at least until the current economic climate calms down.

Poland has come along quickly with electronic banking and now surpasses major economies such as the UK or US. For instance many banks in Poland offer the option to open an account online by completing a simple form, also many residents in Poland use their mobile phones to make payments for items such as groceries.

Poland boasts numerous international banks to choose from as well as local ones.

Umbrella Companies

Chesterfield have a number of different Umbrella companies to choose from depending on your own personal circumstances. The umbrella company essentially acts as an employer. There are various advantages to this. The umbrella company provides payroll services by billing the agency on behalf of the contractor and then distributing the salary back to the contractor.

Corporate Structures

Chesterfield are also able to incorporate companies in a number of jurisdictions in order to suit your needs. This is more expensive to set up and maintain than our umbrella or self-employed schemes, but can have its advantages. Once the contract provider or agency has been invoiced for the work and this has been paid into the company bank account the contractor has a choice as to whether they would like to collect their money as dividends or as salary. If they were to choose dividends then in Poland dividends are taxed at 19% withholding tax, which if you are in the higher tax bracket of 32% proves to be a very tantalising option indeed.

Chesterfield and contracting in Poland

Chesterfield has years of experience with contractors working in other countries and a variety of schemes and solutions in order to make life easier. You will be given a dedicated member of staff who is responsible for all your administration and contact, allowing them to be more in tune with all your needs and assist you in every way possible.

Spain

Summary

Spain is an EU country bordered by France, Portugal and Andorra, located in Western Europe. It has a vibrant economy in which international contractors, or freelancers, are in high demand, particularly in Madrid and Barcelona. Numerous large corporations have chosen to base their headquarters in Spain and English is widely spoken. Spain is especially popular with expats due to the climate and inexpensive cost of living.

Many mechanisms to operate tax use, depending on your personal circumstances, are available. Non-residents taxpayers can choose to either pay a flat rate of tax or be taxed as if resident. If you choose the non-resident option then expenses cannot be claimed whereas if you are taxed as a resident you are able to deduct these.

Taxation

All residents of Spain are required to register their presence with the local authorities. As soon as you live in Spain for 183 days you may be considered to be resident in Spain for tax purposes from the date of your arrival. The tax year and the calendar year run from January to December.

Income tax and social security taxes in Spain are quite high but there are a number of allowances available. Tax law in Spain is straightforward.

It is always preferable for the first time resident in Spain to seek professional assistance before filing their tax returns.

The Contract Market

The majority of the contract market in Spain is based in Madrid and Barcelona although work is available throughout the country. A wide range of industries are catered for, but the majority of contract work is available in the fields of Oil and Gas, IT and Communications plus the banking and financial sectors.

Relocating to Spain

This is a wide range of good quality rental accommodation available in Spain although short term accommodation is difficult to acquire during the summer. Rental prices are quite high but the cost of living in the major cities is more than 20% lower than London.

There are many regions of Spain each of which have sizeable cultural differences, but each region has its own unique charm.

Traveling to Spain

Spain is accessible by air, land and sea. Flights route are among the most competitive in Europe with special offers to be had at off-peak times. There are also competitively priced rail links for those preferring to travel by land and there are numerous ports available for seafarers.

Switzerland

Summary

Switzerland has historically been a top destination for international contractors. English is widely spoken but the official languages of Switzerland are French, German, Italian and Rumantsch.

Switzerland is well located in the heart of Europe and enjoys many advantages of being part of the European Economic Area without actually having joined the European Union.

Taxation Issues

All residents of Switzerland, including the Swiss themselves, are required to register their presence with the local authorities. As soon as you live in Switzerland for 183 days you may be considered resident in Switzerland for tax purposes from the date of your arrival. Non-Residents are taxed only on Swiss source income where as residents may be taxed on worldwide income. The tax year and the calendar year run from January to December. 

Income tax and social security taxes in Switzerland are quite high compared to the UK. The schedule of taxes in Switzerland is notoriously complex and there are different rates and bands dependent upon your personal circumstances and the canton in which you are living and payroll registration is mandatory. 

It is always preferable for the first time resident in Switzerland to seek professional assistance when filing their tax returns.

The Contract Market

The majority of the contract market in Switzerland is based around the technological centres in Zurich, Geneva and Basle.

These centres are internationally renowned and have made many important breakthroughs.  Switzerland also enjoys a vibrant financial sector.

Relocating to Switzerland

All of the key contracting locations have a wide range of good quality rental accommodation. Rental prices however are very high although the cost of living is around 10% lower than the UK.

Switzerland is also well known for its beautiful lakes and alpine views, making it an attractive place to live.

Traveling to Switzerland

Switzerland is very well located in the centre of Europe and is easily accessible by plane or rail.

It is also possible to travel to Switzerland by car from anywhere in Mainland Europe.

Netherlands

Summary

The Netherlands, or Holland as it is often called, is an EU country bordered by Germany and Belgium. It has a vibrant economy in which international contractors, or freelancers, are in high demand, particularly in Amsterdam and Rotterdam. Many multi-national corporations have chosen to base their headquarters in the Netherlands and English is widely spoken.

The Dutch have actively embraced e-commerce and a broad range of skills is required. While the Dutch people themselves have no indigenous contracting culture, there is usually a good demand for short-term staff on projects and development work. The best-paid jobs are normally found in the banking and insurance sectors, but there is high demand for skilled personnel in electronics and telecommunications. The Dutch government has greatly encouraged investment in IT and technology.

Many mechanisms to operate tax use, depending on your personal circumstances, are available but usually this is processed through a payroll scheme. There are various expenses and special tax rates available if your scheme is properly managed.

Dutch Payroll

We provide a detailed and fully compliant Dutch payroll service. Our dedicated staff have specialist knowledge of the intricacies of payroll and taxation in the Netherlands.

Our Dutch Payroll services include:

  • Enrolling you with our Dutch payroll and PAYE schemes
  • Advice and assistance with contracts of employment
  • Application for Dutch social security number or a form E101
  • Application for 30% facility tax exemption available to expatriates
  • Operating monthly payroll, providing payslips, and end of year tax returns
  • Application for health and illness insurance as may be required under Dutch employment law

In addition, for non-EU nationals we can, where appropriate, give assistance with applications for work permits.

Taxation

As soon as you have lived in Holland for 183 days you are considered to be a resident for tax purposes from the date of your arrival.

Dutch tax rates are relatively high but you can apply for expatriate status through Chesterfield and obtain a tax-free allowance of 30% of your employment income. You can qualify for this for up to 10 years. Under Dutch tax law your agency and client will require proof that tax is paid. If certain conditions are met 30% of the wages may be paid as a tax-free allowance for extraterritorial expenses, without the need to submit further evidence. This allowance is meant to compensate the employee for the additional costs of the temporary stay in the Netherlands. An application should be made immediately upon commencing a contract in the Netherlands. Other expenses outside the 30% facility may also be claimed such as commuting costs.

The Netherlands has specific legislation that all foreign contract staff must operate through a registered "wage tax" company. It is extremely important that you seek professional advice before you go to Holland.

The Contract Market

The majority of contract jobs are based in or around Amsterdam, the financial capital of Holland. The Dutch have actively embraced e-commerce and a broad range of skills are required.

While the Dutch people themselves have no indigenous contracting culture, there is usually a good demand for short-term staff on projects and development work. The best paid jobs are normally found in the banking and insurance sectors, but there is high demand for skilled personnel in electronics and telecommunications. The Dutch government has greatly encouraged investment in IT and technology.

Dutch is the spoken language in the workplace; however, many multinational companies use English as their business language. Dutch people are happy to use English although it is a good idea to pick up and use some Dutch phrases.

As previously mentioned, in the Netherlands your agency and client will require that you operate via a registered scheme and our contractor managers can advise you on the best route for you. Our mission is to ensure that all our contractors are paid as quickly as possible and our hassle free approach to business and our innovate use of the latest technology frees up your time and saves you money.

We tailor our structures to suit your needs and because of this our contractors can get the most appropriate and tax efficient solution for their business, so you can receive the most out of the money you earn.

Relocating to The Netherlands

There is a well organised rental market in Holland. Prices for apartments in Amsterdam start at around Euro 1,100 a month and there is a wide variety of accommodation types available - including homeboats. In practice, many expatriates deal with letting agents who charge in the region of one months’ rent as commission. All residents in the Netherlands must register their residence with the authorities (this also applies to Dutch citizens).

The public transport system in the Netherlands is good. Commuting to work by car in Holland can be problematic and many Dutch people will cycle to work if they live a short distance away. EU nationals do not require a visa to enter Holland. They may enter as a tourist but change their status to that of resident once they have found work and accommodation.

A big attraction for many contractors is the vibrant nightlife in Holland. Amsterdam in particular boasts a diverse range pubs and clubs and is a very cosmopolitan city. There are also many cultural offerings for those with more refined tastes.

Traveling to The Netherlands

The Netherlands is accessible by air, land and sea. One of the Netherlands key advantages in the view of many contractors is its proximity and copious travel links with the UK. The rail journey from London (St. Pancras ) to Amsterdam via Brussels takes about 5 hours, with regular departures. There are regular trains from Amsterdam to all major European destinations, including sleeper cars for long journeys.

The key Airports of Amsterdam Schiphol and Eindhoven provide speedy links to all key UK airports. Schiphol is also one of Europe’s key intercontinental flight hubs, meaning that long–haul flights are frequent and varied. Airlines operating between the Netherlands and the UK include KLM, Britsh Airways and Easy Jet.

There are ports in Hook of Holland (Near the Hague), Rotterdam and Amsterdam for those who would rather sail.