Freelancers' Questions: How to freelance abroad from overseas?

Freelancer’s Question: I’m a UK citizen but have not lived in the UK for over a decade. At the moment, I am an ‘alien’ in America (I am not a US resident, legally), where I live and work full-time as a university professor on a J-1 visa. The J-1 visa restricts the work I can do to my job at the university.

I wish to do freelance work as a creative and cultural researcher with clients who are based in Switzerland, not the US. The work would occur outside the US, in East Africa. But the potential clients say they require, under EU regulations, that I register as self-employed so that I can do the freelance work and pay the appropriate tax. Is registering as self-employed in the UK for tax purposes and branching out from there, my best starting point?

Expert’s Answer: Firstly, it should be noted that while not straightforward, your question is easily one of the most interesting that has been posed to me in a long time.

As I understand it, it’s a Swiss client who wishes you to carry out research work in East Africa. Of course, East Africa is not itself a country, so I am unable to respond to you with specific information relating to immigration and taxes without knowing the country (or countries) where you intend to work.

Next, I am a little surprised at the reference to EU regulations requiring you to work as a self-employed person, since neither Switzerland nor any country in Africa is a member of the EU and subject to its legislation.

The countries that are interested in your circumstances, or at least should be, are the US and the country (or countries) you intend to work within in East Africa - so non-EU countries. And the UK should have no interest in your tax affairs since I take it that as a long-term resident of the US (illegally or not), you are certainly not tax resident in the UK.

Similarly, so far as the Swiss authorities are concerned you are not living or working in Switzerland and you cannot possibly have a liability to Swiss income taxes or social charges.

Your central worry here should be how you are going to enter this country (or countries) in East Africa and undertake your work there. It is pretty clear that you will be working in Africa and that this work will not be incidental to duties carried out elsewhere. Therefore, I think I can say safely that it would not be lawful to work on a business visa. Be aware, it’s illegal to work without a valid work and residence permit. This also applies to voluntary work and the self-employed.

Lastly, you say that you are living in the US without a right of residence. As a J-1 visa holder, you are only allowed to perform the activity listed on your Form DS-2019 and as stated in the regulations for that category of exchange.

Please note, I am not a US Immigration lawyer, but my recommendation would be for you to take appropriate advice and try to regularise your immigration status in the US before leaving and then re-entering the US for work or any other purpose. Good luck!

The expert was Kevin Austin, director at Access Financial, a tax and accounting specialist serving UK freelancers working overseas.

Editor's Note: Related Reading -

Freelancers' Questions: Can I sole trade for a UK-based Amercian firm?

Freelancers' Questions: How to bill a now foreign client and pay the tax?

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3rd March 2016

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