8 Things to Consider When Moving Abroad as a Freelancer
While moving to a new country is exciting, it’s also quite stressful. And if you work for yourself, you need to consider several things that might not cross the mind of a salaried employee. You’ll often be on your own with setting yourself up, and the requirements for a residence permit are often different.
You’ll need to consider setting up a business in your new country, how you’ll get paid, and the local laws for self-employed people. Those are just a few things to consider; we’ll review plenty more in this article.
1. Can You Legally Live and Work in the Country You’re Moving To?
When moving abroad as a freelancer, the most important thing you need to do is ensure that you’re allowed to live and work in the country you’re moving to. Immigration laws will differ not only on where you’re moving to, but also depending on your nationality.
If you’ve got citizenship for an EU or EEA country (the 27 EU member states plus Norway, Iceland, and Liechtenstein), you’ll have a much easier time moving around most countries in Europe. The same is true if you’re Swiss. Generally speaking, citizens of these nations can set up as freelancers quite easily—provided that they’re able to support themselves financially.
If you’re from outside the EU, EEA, or Switzerland, you’ll need to consider extra paperwork when moving to one of these countries. Sometimes, you might be restricted to creating a business that specifically serves a local need. Non-EU/EEA/Swiss citizens include people from the UK (from 2021 onwards), the US, Australia, and Canada.
Some countries offer specific digital nomad and remote worker visas. Examples in Europe include Portugal, the Czech Republic, and Estonia. Further afield, you can also live in Costa Rica, Mexico, Malaysia, and several other nations.
Note that some countries will need you to find a place of residence before they can accept your application.
2. Do You Meet the Minimum Income Threshold?
The cost of living will differ significantly depending on where you move to. And as a result, different countries may ask that you meet varying income requirements.
For example, Iceland is known as one of the most expensive countries in the world. To qualify for its six-month digital nomad visa, you must prove that you earn 1 million Icelandic Krónor per month. At the time of writing in March 2023, that’s roughly $7,025 per month.
Many countries have a much lower threshold. For example, to qualify for Malaysia’s nomad visa, you’ll need to prove that you earn around $2,000 per month. If you’re new to freelancing, we recommend growing your skills for a few years to ensure that your pursuit is sustainable. You can lower your learning curve byavoiding these beginner freelancing mistakes.
3. Getting Paid in a Different Currency
Many freelancers use the internet’s global reach to work with companies in different countries. And while this is great from an opportunity perspective, you might need to think about getting paid in foreign currency.
If you’re moving to a Eurozone country and your clients can pay you in Euros, you’ll have no problems. The same goes for moving somewhere that accepts US dollars as legal tender. In many cases, however,setting up international bank accountsis a good idea.
Luckily, you’ll find plenty ofbanking services that allow global clients to pay you. Examples include Wise and Revolut. If you need to, you can easily convert your earnings into your local currency using these services.
4. Do You Need to Report Your Earnings in Your Home Country?
In most cases, you must notify your local tax authorities that you’re moving abroad. But once you’ve done that and paid any outstanding taxes that you owe, you often won’t have many—if any—obligations to report your earnings.
However, things are different if you’re a US citizen. Even if you don’t live in the US, you must still report your earnings each fiscal year. Moreover, you’re required to identify any non-US bank accounts you have.
Unless you earn above a certain threshold (this changes annually), you shouldn’t have to pay any tax. Many countries also have dual taxation treaties with the US, which stops the same income from being taxed twice. Knowing your obligations is complicated, and we recommend seeking professional financial advice. To file your taxes, you’re able to use tools likeexpatfileandH&RBlock.
5. Getting Insurance for Your Equipment
Freelancers often invest in expensive equipment, such as computers and cameras. And if you lose or damage these, you not only have to pay to replace them—but earning money also becomes a lot harder.
Getting insurance for your equipment is a good idea if you’re moving abroad, and you’ll find several companies that provide assistance of this kind. you’re able to do further preparation by checking out a range ofapps and guides to help you when working and traveling.
6. Do You Need Health Insurance?
Healthcare systems vary dramatically across the world, and so does each country’s approach to them. While some countries fund their healthcare systems with taxpayer money, others have more privatized sectors.
Depending on where you move, you might need to purchase health insurance before you can start working. The rules for what does and doesn’t qualify differ, but you should find the information on your country’s immigration portal.
7. Opening a Local Bank Account
When moving abroad as a freelancer, you’ll need to think about how you pay your bills in your new country of residence. Some nations require that you open a business bank account in that part of the world, and you’ll also often need a personal one to participate in everyday life.
Opening a bank account in a new country can be challenging if you’re a freelancer, but options do exist. You can look for mobile-only banking services to begin with, such asMonzo(UK residents only) andN26.
Note that if you regularly receive international payments or convert your money into your local currency, your bank might ask you to confirm that your earnings are from legitimate sources.
8. Registering Your Business in a New Country
In addition to registering as a resident in your new country, you must often establish your business. You’ll need to choose whether you’ve got a sole proprietorship; many nations also have LLC and S Corp equivalents.
you may often register your business online. Requirements for bookkeeping and other activities may differ depending on your company’s legal status, and you’re responsible for checking those. In some cases, you might need to present a business plan or what you expect to earn—and you might need an accountant’s approval.
To move to some countries, you’ll need to prove that you’ve established a business before you’re able to register as a self-employed resident. But you might have the option to register as self-sufficient first and change your status later. ensure that you’ve got enough money saved before you move; we recommend at least 6-12 months' worth of personal and business expenses.
Make Moving Abroad as a Freelancer Less Stressful
The idea of working from anywhere is often romanticized, and location independence is incredibly rewarding once you’ve set yourself up. But you often don’t see the messy initial stages; as a freelancer, you often have to deal with more bureaucracy than the average person.
Ensuring that you’ve organized everything before you move is crucial for making the process as seamless as possible. Get all the paperwork you need and start saving money to cover your initial expenses. It’s also worth working on your business to grow it to a point where you don’t need to worry about meeting income thresholds.
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